Toyota Central Motors forecasts customer demand based on past sales data and statistical analysis of trends, and uses this to determine capacity utilization and inventory needs. They employ various forecasting methods including collective opinions from salespeople, expert opinions, economic indicators, and trend projection. Toyota Central Motors tracks key metrics like inventory levels and turnover, capacity utilization, and customer wait times to ensure high quality service and meet customer expectations.
Toyota Central Motors forecasts customer demand based on past sales data and statistical analysis of trends, and uses this to determine capacity utilization and inventory needs. They employ various forecasting methods including collective opinions from salespeople, expert opinions, economic indicators, and trend projection. Toyota Central Motors tracks key metrics like inventory levels and turnover, capacity utilization, and customer wait times to ensure high quality service and meet customer expectations.
Toyota Central Motors forecasts customer demand based on past sales data and statistical analysis of trends, and uses this to determine capacity utilization and inventory needs. They employ various forecasting methods including collective opinions from salespeople, expert opinions, economic indicators, and trend projection. Toyota Central Motors tracks key metrics like inventory levels and turnover, capacity utilization, and customer wait times to ensure high quality service and meet customer expectations.
Toyota Central Motors forecasts customer demand based on past sales data and statistical analysis of trends, and uses this to determine capacity utilization and inventory needs. They employ various forecasting methods including collective opinions from salespeople, expert opinions, economic indicators, and trend projection. Toyota Central Motors tracks key metrics like inventory levels and turnover, capacity utilization, and customer wait times to ensure high quality service and meet customer expectations.
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Customer forecasting:
At Toyota Central motors , the customer forecasting is done on the basis of past data , the statistical methods where graphs are drawn according to the lifestyle and change of consumer preferences , trends from the previous major sales are analyzed and then the results are drawn according to the past trend results. Any growth or changes in key variables from the past are also considered while sketching the trends.
It is necessary to have the forecasting of the customers visiting as the utilization of capacity and inventory turnover will be determined through it. Once we know the number of customers expected after sales and the actual number of customers that came in for the services, we would know if the dealership is actually utilizing its capacity. Moreover once we know the number of customers visiting for services, we can evaluate the number parts that are being used from the inventory for services and replaced with the new one; hence the inventory turnover.
There are several methods through which the demand and hence the customers can be forecasted. Forecasting at TCM is done for both the sales of the car and the services. There are majorly four methods used for the forecasting and are usually done by the planning department with the help of the sales person.
1. Collective opinion method :
The salesperson of the dealership basically predicts the future sales of their region in the light of the factors like changes in the selling price, the competition in the market, lifestyle and consumer behavior and preferences. TCM here depends on its experienced sales person as they are closest to the customer and can determine their needs and demands effectively.
2. Expert opinion method:
The market experts are hired and given a set of carefully designed questionnaires. The expert fill the questionnaires according to their vast knowledge which helps in forecasting the demand.
3. Barometric method: The economic indicators like inflation, CPI etc are used to predict the future demand of the car and the customer opting for the services as the prices in such cases are on the rise. The past demand of the product is determined and converted into future trend.
4. Trend projection method :
This is commonly used by the dealership where by sufficient amount of past data of sales and services are collected in a chronological way and through time series future market trend is predicted. According to the past five data TCM has the sales forecast of 2188 in 2019 while the actual sales of the cars have been 2000. This is done considering all the factors, the increased price, new model and consumer buying power and preferences. With the after sales service the forecast for 2019 per day was 220 on a normal day while the actual is around 180 - 200 cars a day especially on the weekends. The customers who require services are least in the gazetted holidays like moharram eid etc which are up to 30 – 50 depending on the urgency . No of cars that are visiting for service from past 3 months on average is around 60 – 65 because of the pandemic. The cars for the services include the one that return for the service and as well as other old and Japanese model vehicles.
Utilization = Number of cars actually serviced / Maximum capacity of the service center
For 2019 =200 / 250 = 80 %
Inventory control:
At TCM the inventory control is of the utmost importance as it helps in decreasing the customer lead time and increasing the customer retention which are the two major problems discussed in this case. Since our competitive priority is delivery, we need to make sure the customer is satisfied with the service and catered at earliest and within a short time frame. At TCM we usually have to types of inventory:
1. Running inventory : It includes engine oil, gear oil, filters, side mirrors, bumpers and other miscellaneous which are commonly used in the case of repair and depend on cars monthly travel.
Most of the running inventory is kept according to the predicted requirement of the parts being used. For a safe margin the prediction is at times higher than expected. For instance air and oil filters that are most commonly used, the amount that will be kept in the inventory is around 150 considering any wastage or fitting issues while repairing since 120 - 130 cars require filter change in a normal running day.
If the running inventory is out of stock, system is updated and back order is placed to Indus motors. Mail is circulated in the departments and usually the parts are received within a day along with a delivery note. The customer is then called for the parts arrival by MRS (Maintenance reminder department). It takes on average 5 days if the repair involves parts from running inventory and this is our major concern as we need to reduce it to 4 days. One of the reasons the dealership is losing customer according to our analysis is the long wait for even a simple repair.
2. Non running inventory :
It includes dashboard, windscreens, steering axle and other parts of the car that are rarely used for repair and have the least chances of getting damaged in accidents (Mostly involves interior of the car). Such inventories are kept at minimum in order to avoid any holding cost.
Normally out of 200 only 15 - 25 cars are estimated to have issues that involve non running items. In such cases the customer is given a minimum of week for the parts arrival. Indus motors itself take 4 - 5 days to arrange non running items and higher lead time is incurred in such cases.
The customer is given at most 12 days on average if the repair involves non running parts and we need to reduce it to 10 days in order meet out competitive priority of service delivery as the case states.
Inventory turnover for AC/ Air filter for a year
= Cost of filters sold / Average inventory for the year (assuming 120 cars require filter replacement in a month)
= 2160000 / 225000
= 9.6
Note : Indus motor turnover for 2019 is 9.7 .
Quality Assurance:
One of the biggest reasons that the customers prefer service from the authorized dealers is the quality. They know that the parts being used are of genuine quality and the repair, denting, painting and other services performed are by expert service advisors and technicians. The customer trusts the service provider with the quality and for that reason they are ready to price which often higher than the local dealer shops. Normally the parts that are not available in the distributor warehouse which is Indus motors are ordered from Thailand and the customer can see the product description, specifications and authorized seal for most of the parts. The quality is controlled at TCM as most of the technicians and the service advisor are actually trained by Indus motors and they have vast knowledge and experience for the work they do. Training is conducted in two steps of each service station employee which is known as Toyota technician training program and their performance is analyzed through customer feedbacks every month. This is how Toyota Central Motors and Indus motors assist in quality in terms of service as well the parts being used.
