The challenge
To acquire repair parts across more than 6 million stock keeping units for its carry-in repair facilities. Best Buy had been working with countless vendors. The fortune 100 retailer relied upon faxing, phoning and manually keying in orders. As a result, the process was time-consuming and unreliable. It was time for Best Buy leaders to centralize and automate their carry-in repair supply chain.

The Solution
In 2000, third-party logistics provider National Parts, a Fidelitone Logistics-affiliated company and Best Buy vendor, offered company executives a solution to their problem: a technology-based, virtual distribution system, with centralized order processing and data management based on Best Buy’s business rules.

This automated, untraditional approach would consolidate and centralize Best Buy’s repair parts supply chain functions for its carry-in repair facilities, while allowing the execution of parts distribution to remain flexible and decentralized. Best Buy decision makers embraced the concept, and the two companies began collaborating to plan the implementation of National Parts’ technology into the Best Buy systems.

“Acquiring the massive number and variety of repair parts required for Best Buy's repairs is a major challenge,” says Dave Telschow, Best Buy director of repair service. “National Parts offered us an innovative partnership that allows us to maintain much-needed flexibility in procurement and distribution while keeping costs down and maximizing timeliness and accuracy.”

An important part of the National Parts tool is its ability to operate based on defined business rules established by both organizations. Adaptability is a key concept when working with supply chain management, and, in order to truly benefit Best Buy, National Parts professionals knew they must provide a service that is flexible and able to be customized based on best Buy’s particular needs. *

Using National Parts’ proprietary systems and processes, all Best Buy carry-in repair communication now takes place automatically through a file transfer protocol site. Using the system, Best Buy managers send out a list of parts needed every day. The National Parts’ tool transmits the list – essentially a “parts request for proposal” – to more than 34 vendors. These suppliers then respond to the requests with price, availability, and location of the required part.

Based on business rules established, the system automatically selects a supplier depending upon the optimal combination of price and delivery speed. A purchase order is created and sent to that supplier, and the part is shipped the same day directly to Best Buy’s repair facility. From order to invoice, the entire process takes mere minutes, with thousands of transactions occurring each day.

The results
“Our expectation is to have repair parts shipped the same day,” Telschow says. “Using this process, we are able to make more parts available faster than ever before, thus providing superior service to our customers.”

Aside from the cont-savings, Best Buy customers also benefit because company decision makers now have more time in the day to concentrate on their technology and entertainment products. By outsourcing their carry-in repair parts supply chain functions, Best Buy leaders are able to focus on what they do best – providing consumers with products that make life easier and more fun.

In addition, Best Buy’s parts supply chain for its carry-in facilities is much more seamless, saving the company millions of dollars in parts each year. With an automated system that runs 24 hours a day, seven days a week, procurement and distribution options are never limited by time or location, and same day shipping is now a standard, rather than a goal.

Based on its success with carry-in repair facilities, Best Buy recently decided to expand the automated parts procurement process to its “in-home” repair requirements. National Parts and Best Buy professionals are currently conducting a nationwide rollout to capitalize on many of the same efficiencies that have been experienced at the carry-in facilities.