CEVA switch working for Nissan

NISSAN says its decision to outsource the parts management and distribution outfit to an independent contractor has paid off, but the move was a difficult decision and not without risk.

Like many car-makers, Nissan had previously managed its parts network internally, but earlier this year the company contracted independent logistics specialist CEVA to take over the operation – a move that it says has paid off.

Speaking at the Navara variant launch, Nissan Australia managing director and CEO Richard Emery told GoAuto the switch over was a challenge but has had a quantifiable and positive impact on efficiency.

“Our parts distribution structure has improved not just because changed over to expertise in terms of CEVA’s capacity and capabilities, but also we had to get our game together as well,” he said.

“Our fill rate was down in the mid-eighties, which wasn’t great but now we are in the early nineties. We wont ever get to 100 per cent because of the scale of our business, but it has markedly improved.”

Mr Emery explained that transitioning from in-house spares management to a separate contractor was a significant challenge, but the experience and specialisation of CEVA had made the change-over easier than expected.

Left: Nissan Australia managing director and CEO Richard Emery

“It was always a risk and one of those things that kept me up at night. The turnaround out of CEVA – considering it was such a big change – was quite smooth.”

Six months on from the successful implementation, Mr Emery said one knock-on effect had been a positive effect on customer satisfaction, but the improvement has been as a result of many factors over a longer period.

“Our customer satisfaction continues to improve. Whether I can tie it directly back to that I don’t know, because it’s a number of factors. We’ve changed our whole customer philosophy in the last year and a half.

“Not just getting our logistics right, but getting our fill-rate up, parts availability, our response rate to customer issues, all those things we have worked on pretty solidly in the last 18 months and all those factors have seen a significant improvement to customer satisfaction.”

Nissan decided to make the switch after an internal review of the previous system revealed unacceptable inefficiencies, which would have been more costly to fix than employing a third party.

The company is the second brand in Australia to recently engage CEVA as its parts handling contractor, following Honda's lead who made the change over in 2013.

CEVA specialises in complete vehicle transport as well as parts distribution networks, and has vehicle freight contracts with Mazda, Isuzu Ute, Mercedes-Benz and Subaru.