The Power of Doom:

Incredible results of the team

which has nothing to lose

Alexander Nikolenko,
Vice President Marketing
ELIT Group
1
 Automotive
Aftermarket

Extremely complex business:

Over 30,000 different car models
Thousands of spare-parts per one car
Different quality / price levels for one part
As the result spare parts distributors have millions of
items in their offer and hundreds thousands of SKUs
Key question of every distributor:
Which items to keep on every distribution level (CW, RW,
branches) 2
 ELIT Group

Operates on 5 markets:
Czech, Slovakia, Hungary, Romania, Ukraine
Distributes spare parts for passenger cars, trucks and
motorcycles as well as garage equipment, tools and testers
Has one Central Warehouse (CW in Prague), 3 Regional
Warehouses (RW in Budapest, Bucharest and Kiev) and over 80
branches
More than 300 suppliers and more than 200 product families
Over 30,000 buying customers, main segment are garages (60%)
Matrix management system
Market leader in CZ and SK, Top 3 in HU, Top 5 in RO and UA 3
 TOC elements
in ELIT Logistics

Strong Central Warehouse in Prague (over 80,000 SKUs)

3 Regional Warehouses in countries (over 40,000 SKUs each)
Over 80 branches (5,000 - 10,000 SKU each)
Automatic Min-Max system with overnight deliveries, in
some cases 2x per day deliveries
Min-Maxes recalculation every month based on the sales
statistics 4
 ELIT Romania

ELIT Romania has been strongly hit by 2009 crises, sales

dropped almost 50% down
Complete company restructuring has been done in 2H 2009
No visible results in Jan-Sep 2010 5
Company in Crises

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 Shift in Customers Expectations after
the Crises
New reality:
Price really matters
Garage takes every job
More immediate repairs, less planned repairs

In order to survive garage needs to get spare parts

today, not tomorrow

Availability on branches is key! This is our constraint!

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 Do we have on the branches what
customers really need?
Min-maxes were calculated on the historical sales
statistics
Strict system of the write-offs calculation has
been applied in the whole Group

We could be sure that slow-movers were not

located on the branches
But could we be sure that fast-movers were
present there?
Classical hen and egg story 8
Questions and Answers

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 Solution
Increase availability on the branches

Focus on 25 most important product families

For every product family put products for at least
three different price levels
Use suppliers statistics to define real fast-movers
Put on the branches wider range than
competitors have

Take away from branches all other products

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Implementation

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Timing

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Results

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ELIT Romania in 2011

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 Happy End?
Not really. Few questions are still open:

Why did we start to search for solution only when

situation became critical?
Where did we find strength and creativity to implement
new solution unthinkable before?
Why did the whole team follow management without
any comments or grumbles?

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We and Others

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Loss of Freedom

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 Real Crises
Real Crises brings new aspects in my work:
I have nothing to lose because everything has been lost
already. There are no expectations from 3rd parties any more.
External evaluation starts to mean nothing because it has
fallen to the minimal possible level already

I can count only on myself but I am free to try to change

the situation.
If I solve the problem then I will win: grow, develop, gain
If I fail then there will be nothing: no results, no excuses, no
future
Personally either I will win or I will lose
I get back my freedom 18
Beloved Crises

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The Power of Freedom

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Do we really need
a Crises
to become FREE?

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