Client Background

Client: Large global suppliers of international Auto/OEM

Industry:  Auto/OEM

Key Products & Services: Auto audio equipment, home equipment

Area of Operations:  North America, LATAM, EMEA, and APAC

Challenge

The client faced heavy short shipment chargebacks from two of its customers due to violation of shipping guidelines by warehouses managed by a US-based third party, which included delay in on-time shipment and low fill-rate. These violations resulted in penalties from dealers and distributors, resulting in revenue loss. The client also faced a high cycle time for inventory allocation due to insufficient inventory visibility, which resulted in order inaccuracy and delay in order fulfillment. The inventory levels at the client-side were dynamic, and, in the absence of real-time reporting, they were facing a mismatch in credit-card orders and payment receipts, leading to end-customer dissatisfaction.

Solution

Wipro helped the client perform root-cause analysis of the short shipment chargebacks and worked with the warehouses to correct and standardizing the shipping guidelines. We helped them with as-is investigation of the vendor violations and recommended improvement in labeling and barcode standards. Wipro automated the inventory allocation process of the client resulting in a reduction of inventory allocation cycle time. We implemented Power BI reporting to enable real-time inventory level status, which improved customer satisfaction.

Business Impact

• Over 97% reduction in shortage chargebacks resulting in the client recovering around $500,000 from bad debt.
• The client received a payback of $1 million.
• The client also saved an annualized chargeback of $4 million.
• Automated processes in inventory allocation resulted in 100% accuracy and reduced the transaction time from 5 minutes to 10 seconds.
• 99% reduction in errors in credit card orders.
• $1.6 million worth of Business Value Meter (BVM) delivered