Friday, June 16, 2006

Volkswagen of America's Parts Operations Sets Sales Records

Text from Volkswagen of America.
AUBURN HILLS, Mich. – Volkswagen of America, Inc.’s Parts Operations and Logistics organization has set a record in 2005 with $1.1 billion in sales to dealers in the United States and Canada. Additionally, it ranked fourth in productivity and the top among all European brands by Carlisle & Co. – up from fourteenth the year before.

Parts sales to dealers have consistently risen each year since 1995, breaking internal records and reaching the $1 billion milestone last year. VWoA’s Parts Operations receive parts and accessories primarily from Germany, Mexico and Brazil and redistribute them to more than 1,000 dealers in the United States and Canada. The organization carries out $5 million in sales each day. Volkswagen of America anticipates another record-setting year this year for the sales of authorized parts and accessories.

“Over five years ago, we initiated a plan to bring our parts operation to world class levels. The plan saw the implementation of a completely new parts system called ET2000 and the construction of five new state of the art facilities which support our dealers. And finally, we have reached levels of productivity and efficiency that are recognized to be among the best in the industry” said Eric Johnston, Vice President, Operations and Logistics.

“We lead with the principle of continuous improvement – from reducing costs to improving the quality of our service, we aim to be the preferred service parts logistics provider for the Volkswagen brand,” said Eric Carlson, director, Parts Operations, Volkswagen of America, Inc. “ We’ve improved our internal productivity and that has had a direct positive impact on our customers.”

Concord, Massachusetts-based Carlisle & Co., a consulting and benchmarking firm devoted exclusively to the service parts industry, found a 30 percent improvement in the productivity of VWoA’s parts warehouses from 2004 to 2005. The Carlisle study showed that productivity in VWoA’s warehouses increased to 45,288 lines handled per employee per year (LHY) in 2005, making it the fourth most productive among all automakers surveyed and first among the European brands.

“A dramatic one-year improvement like this hasn’t been seen in our 15 years of benchmarking,” said David Carlisle, chairman, Carlisle & Co. “Extraordinary performance improvements like we are now seeing from Volkswagen of America can only come from a well-led organization with a clear vision and a smart, dedicated team of people.”

Carlson points to feedback from warehouse employees and better inventory management as reasons for the marked improvement. “We redesigned the layout of our facilities for enhanced efficiency, and we’ve implemented the latest technology, equipment and processes to better fulfill and replenish our customers’ inventory,” Carlson said.

Volkswagen of America Parts Operations maintains three million square feet of warehouse space and fulfills around 14 million order lines per year.

Founded in 1955, Volkswagen of America, Inc. is headquartered in Auburn Hills, Michigan. It is a subsidiary of Volkswagen AG, headquartered in Wolfsburg, Germany.

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