Case Studies > Leading Auto Parts Provider LKQ Corporation Improves Efficiencies, Drives Down Costs, and Optimizes Routes with Roadnet Anywhere

Leading Auto Parts Provider LKQ Corporation Improves Efficiencies, Drives Down Costs, and Optimizes Routes with Roadnet Anywhere

Company Size

1,000+

Region

America
Europe

Country

Canada
Netherlands
United Kingdom
United States

Product

Roadnet Anywhere
Omnitracs Professional Services
Omnitracs Services Portal

Tech Stack

ERP System
Route Optimization Software
Analytics

Implementation Scale

Enterprise-wide Deployment

Impact Metrics

Cost Savings
Customer Satisfaction
Productivity Improvements

Technology Category

Analytics & Modeling - Predictive Analytics
Application Infrastructure & Middleware - Data Exchange & Integration
Functional Applications - Fleet Management Systems (FMS)

Applicable Industries

Automotive
Transportation

Applicable Functions

Logistics & Transportation
Warehouse & Inventory Management

Use Cases

Fleet Management

Services

Data Science Services
System Integration
Training

About The Customer

LKQ Corporation is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. The company is a major distributor and marketer of specialty aftermarket equipment and accessories in North America, the largest distributor of mechanical and collision alternative parts in the United Kingdom, and the largest distributor of mechanical parts in the Netherlands. With over 400 locations of aftermarket and salvage parts throughout the U.S. and Canada, LKQ aims to provide its customers with the specialty parts they need within one business day. The company operates distinct lines of business, including an aftermarket business and a salvage business, which were acquired at different times and later combined. This combination has presented unique challenges in logistics and infrastructure, particularly in integrating different systems and optimizing delivery routes.

The Challenge

In the company’s North American operation, there was an opportunity to improve efficiencies and customer service by implementing a route optimization process that uses machine algorithms to supplement human decisions and commitments while maintaining specific customer preferences to deliver a route solution that’s timely and efficient. With more than 400 locations of aftermarket and salvage locations throughout the U.S. and Canada, LKQ aims to provide its customers with the specialty parts they need within one business day. Historically, LKQ relied heavily on its enterprise resource planning (ERP) system. Customers would call in and the sales team would take the customer’s order and enter the information into the ERP. At the time of dispatch, LKQ would pull up the orders and print out the route for the driver. Drivers would typically take the same route every day, which allowed them to get to know the customers. However, drivers were also responsible for determining the best way to get to each stop. This was placing the burden of route optimization on the drivers, and it also meant there was a lack of visibility into the process. Some routes were local — within a 10-15 mile radius — while other routes had the driver on the road for more than an hour before reaching the delivery radius. All of these factors were increasing the amount of time drivers spent on the road — which, in turn, was increasing the cost of delivery.

The Solution

After determining that a route planning tool would achieve the visibility and efficiency it needed, LKQ identified Omnitracs Roadnet Anywhere® as the right solution for the job. Hicks was tasked with making that solution work for the company’s warehouses and drivers — but it was not exactly easy. LKQ faced several unique challenges with its logistics and infrastructure. The first hurdle was the frequency with which orders are being placed. “We have orders that have come in five minutes before a truck is scheduled to roll off the dock,” Hicks said. “We were dealing with live orders coming in and having to make sure we accounted for those.” Hicks also explained the difficulties that arise from LKQ’s distinct lines of business. The company has an after market business and a salvage business — both of which are two completely separate entities that were purchased by LKQ at different times and then combined. “The parts are different with a separate set of serial numbers, and the two systems don’t integrate well with each other,” Hicks said. “It was a challenging implementation for both our team and Omnitracs, but they certainly stepped up to meet those challenges. At the end of the day, Omnitracs stayed with us. They followed through and delivered.”

Operational Impact

When LKQ first implemented Roadnet Anywhere, it immediately identified routes that weren’t being run efficiently. For example, some drivers were making the trip counterclockwise, instead of clockwise. “Roadnet gave us better directions and better route plans,” Hicks said. “Everybody uses it every day — it’s part of our routine now. Roadnet is definitely integrated into our process.”
Today, before the drivers begin their day, the company’s ERP interfaces directly with Roadnet to develop an efficient route for each driver, which can either be printed out or delivered electronically via Roadnet mobile. The driver knows where to go and how to get there quickly, and LKQ has insight into where its drivers are located.
The company also has insight into improved performance and cost savings. While some regions have remained relatively consistent, one of LKQ’s regions saw a nine percent savings in cost-per-route in the first quarter of 2017.
There are still some inefficiencies that the company is looking to improve. With the help of Roadnet Anywhere, LKQ looks forward to implementing dynamic routing for an even better cost-per-route. It also continues to operate two lines of business and is working to further bring them together into one software solution to combine all routes. Twenty-five percent of LKQ’s routes are combined today in a split greater than 80-20. Roadnet Anywhere actually helped combine the routes more than they were prior to implementation. Hicks is confident that they’ll eventually reach 100% integration for combining salvage and after-market parts on the same routes and be able to implement a zone or sale routing system to achieve even greater efficiency.

Quantitative Benefit