At our annual All-Associate meeting in April, President Kato urged us to add “Execution” to our focus, along with his previous directives of “Speed” and “Change.” Now that we’ve closed the first quarter of fiscal year 2017, our operational activity shows we’ve taken the concept of “Execution” to heart and we are off to a great start.
As always, sales are a key barometer. I’m pleased to report we achieved 103 percent of our plan for the first quarter! Our nenkeitarget was $152 million; actual sales totaled 157 million. The progress we’ve made during this period in the following areas has played a major role.
Internally, DPAM has adopted a business unit approach to the following segments: AOES, Powertrain, Thermal, HD, CIS, Reman Operations at Murrieta, and Connected Service. This has enhanced our ability to track each group’s sales and profitability. Meanwhile, we maintained the coordinated group approach to SQE, SCM, F&A, BP and Marketing. These units work as a team to support our profit centers.
Externally, DPAM expanded our sales operations with two new offices. In May, we opened a new OES Sales office in Plano, Texas. We also recently established a new sales office in Monterrey, Mexico.
Staffing and Sales Support
Over the past three months, we hired 19 new associates to support our business initiatives. We welcome the nine new associates at our Long Beach headquarters and 10 new associates supporting our operations in Murrieta.
We also launched a new professional development program involving an exchange with one of our counterparts in Europe. We currently have a DENSO Europe-based associate on assignment in Long Beach with our Product Management Group, and we will be sending someone from DPAM on assignment in Europe.
Additionally, HD selected and hired 10 manufacturer representative organizations to support its nationwide sales outreach efforts. This adds another 57 representatives to our sales force. We also finalized an agreement with SIRSA Industrial to manage our fulfillment and warehouse operations in Mexico.
We’ve made huge strides in sales. DENSO won Advance Auto Parts’s business for our premium aftermarket iridium spark plugs, Ford awarded DENSO its aftermarket business for condensers, and we began shipping to fill a $2 million order NEC Corp. placed with our ADC division. Also, we’ve started selling the new line of PowerEdge diesel particulate filter and diesel oxidation catalyst aftertreatment products, and the National Pronto Association now offers our new VehicleMRI software to its network of 94 members with more than 350 warehouse locations throughout North America.
Operational efficiency is critical to our success. At our Long Beach warehouse, our improvement plan has paid off. Our on-time shipping rate jumped to 99 percent from 89 percent. At our Murrieta plant, we’ve increased our product output 30 percent, which has significantly reduced backlogged orders. Overall fill rates improved in April compared with March, and we hit our May target. However, keeping up with the growing demand for our spark plugs and Mitsubishi reman products was a challenge in June. While this is a “good problem to have,” we look forward to solving it. We recently transformed the way our material planners approach inventory and delivery issues. The team now holds daily “war room” meetings to fine-tune procedures and swiftly address critical matters.
Accounts receivable have improved, but issues remain with timely payment from our national accounts. Internally, we now hold our regular financial meetings and complete related reports earlier in the month, which allows us to plan more effectively and respond more quickly to companywide needs.
We implemented our DOMO software system, allowing business units to better coordinate and respond faster to our customers’ needs.
Our second year as the title sponsor of the NHRA Las Vegas Nationals built on last year’s marketing success. In conjunction with the March 31- April 2 weekend event, we hosted our Warehouse Distributor Council meeting. In June, we launched our new DENSO logo, “Crafting the Core.”
Speed, change and execution: This powerful combination leads to results. Everything we’ve achieved in the first quarter shows that DPAM is moving quicker, improving our processes, and taking action to achieve our goals. We’ve got the wind at our backs. Let’s build on this momentum by redoubling our efforts for the rest of the fiscal year.