Overview of the Specialty Tire Industry
Specialty tires are typically designed for specific weather conditions or specific vehicles. Most of the companies in this space produce specialty tires as one of their main product lines along with other product lines such as passenger car tires, truck tires, etc. The increasing mechanization of agriculture, industrialization, technology advancements, winter tire legislations, and air traffic are some of the key factors that are expected to drive the growth of the specialty tires industry over the next couple of years. Additionally, the increasing market for retreading of tires is anticipated to fuel the market’s growth. However, several factors are expected to influence the growth of the specialty tires industry. These factors include:
- Size proliferation: Today’s specialty tires manufacturers must have higher inventory sizes, and brands than ever before as no single manufacturer has all the sizes and patterns needed to supply according to the market’s demands. Also, manufacturers who do have most of the sizes don’t necessarily have the required competitive pricing for all items; so, it becomes essential for companies to carry multiple brands in multiple tiers.
- Direct competition from manufacturers: As markets have evolved, so have the manufacturers’ approach in the marketplace. Specialty tire manufacturers are no longer predominantly dependent on their wholesale distributors. Today, all major manufacturers have direct dealer marketing programs that allow them to ensure that their marketing funds, special price incentives, etc. reach their intended targets — the consumer. This structure integrates the manufacturers into the supply chain and allows them to improve the sales of their products.
Many such factors are compelling specialty tire manufacturers to leverage the use of robust supply chain management solutions.
The Business Challenge and Journey
The client, a leading specialty tire manufacturer with business units spread across the globe, wanted to develop and implement a centralized logistics network for their procurement activities. The client also wanted to streamline their supplier and carrier operations for improved performance and accountability. Moreover, the primary aim of the client was to gain real-time supply chain and financial visibility.
SpendEdge’s supply chain management experts developed a robust market research approach to help the client transform their logistics operations to a centralized network design. The approach included primary and secondary research coupled with qualitative and quantitative data collection methodology.
During the course of the supply chain management engagement, the specialty tire manufacturing client trained their suppliers on a uniform set of logistics technologies and procedures. Stringent carrier requirements and a carrier rating system were implemented to measure carrier performance. Additionally, the client implemented advanced logistics management technologies and strict accountability procedures to gain real-time visibility of delivery status, routing schedules, and productivity.
Key questions answered in this supply chain management engagement
With the help of SpendEdge’s supply chain management solution, the specialty tire manufacturing client centralized their company’s logistics operations. This helped them increase both efficiency and visibility throughout the network, as well as reduce supply chain costs. Furthermore, the client established origin distribution centers (ODCs) and consolidated shipments to plants. This helped them reduced plant inventory by 15%.