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

• Functional Applications - Fleet Management Systems (FMS)
• Analytics & Modeling - Predictive Analytics

• Automotive
• Transportation

• Logistics & Transportation
• Warehouse & Inventory Management

• Fleet Management

• System Integration
• Training
• Data Science Services

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.

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.

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.”

• 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.

• One of LKQ’s regions saw a nine percent savings in cost-per-route in the first quarter of 2017.