Research On The Multi-echelon Inventory Management Of Automotive Spare Parts

With China's accession to the WTO and the integration of the global economy, the quantity of cars increases year by year followed by the demand for automotive spare parts continuing to expand.China's auto market especially auto spare parts market shows great potential.Automotive spare parts sales,according to the data,has become the largest source of profits in the automotive industry while the profits of car sales shrink constantly.Spare parts inventory accounts for a large proportion in the whole spare parts costs.Therefore,it is of great significance for companies to effectively reduce the inventory of automotive spare parts.This paper studies how to reduce the spare parts costs by reducing spare parts inventory of car companies in the whole supply chain.After the systematic analysis of the current characteristics and problems,the solutiont is put forward.Taking SQ company for example,this paper improves it's management mode and warehouse processes.It is suggested to make full use of SAP information system and classify the spare parts reasonably by combining ABC and CVA classification method. Multi-target operation model under the multi-echelon inventory was established according to the inventory costs.The use of genetic algorithm ensures the safety stock, order point and order quantity.The original Inventory control model only considers order costs,storage costs and other factors.Besides,this paper takes the losses out of stock and damage cost of spare parts into consideration.So it will not only effectively reduce the inventory costs but also will help companies to improve the brand image and the quality of service.The results of research of this paper can be applied in the automotive spare parts management,as well as in the other manufacturing inventory management.