Public Voting

Category: Tech Optimization and Modernization

Nagarajan Muthusamy

CIO/CTO, ReliableParts

Supernova Award Category: 
Tech Optimization and Modernization
The Organization: 

Established in 1933, ReliableParts is one of the largest OEM distributors of quality appliance, heating and cooling parts for every major home appliance brand: Whirlpool, Electrolux, LG, GE, Samsung, Frigidaire, Maytag, KitchenAid and more. With 64 branch locations and eight distribution centers strategically located across the U.S. and Canada, the firm serves everyone from “do-it-yourself” homeowners to trained service professionals. ReliableParts serves as an alternative distribution arm for many product suppliers – serving customers not reached by traditional distributors in the automotive, electrical, plumbing, industrial and hardware sectors. Its mission is to be the easiest, fastest and best company to do business with as it serves 26,500 customers.

The Problem: 

The growth of ReliableParts’ wholesale(www.reliableparts.net) and retail business (www.reliableparts.com) was anemic and lagging other retailers of Appliance parts industry due to outdated legacy systems and siloed applications, processes and data. The problems were four-fold.

  1. A precarious on-premise ERP conversion project remained incomplete even after a $7 million migration-development investment and three years of focused effort. Digital platforms were high-maintenance and neither PCI-compliant nor secure. Customers could only access restricted views of product availability and inventory levels were skewed.
  2. Manual, siloed business processes for the Returns and Warranty portion of the business, totaling 18% of sales, caused a six-week lag in issuing credit refunds for Warranty and Part return claims. ReliableParts was losing millions of dollars each year in expired credit refunds due to processing delays.
  3. The API technology needed by big box retail customers to place bulk orders was unstable and replete with bugs, destabilizing order placement and escalating maintenance costs. API issues had resulted in losing a few big customers.
  4. Legacy EDI tools were riddled with inconsistent data format, missing fields and data security issues. Time-consuming error detection/correction triggered payment penalties and higher operating costs.
The Solution: 

ReliableParts converted the insights of an internal 60-day audit of IT infrastructure and processes into a bold tech optimization and modernization strategy that reimagined its entire business and operating model to accelerate customer response time and profitability. A “Big Bang” approach converted the ERP conversion for all 64 locations at once. ReliableParts embraced the Cloud for its entire infrastructure, applications and data architecture, and applied omnichannel services for a fully integrated digital commerce strategy. Business decision-making, agility and customer experiences were transformed through Cloud, AI, analytics, flexible IT infrastructure and operations. Flexible Cloud-native architectures and advanced Platform-as-a-Service capabilities eased encoding of new business rules and supported continuous innovation. EDI, agile and DevOps framework solutions broke through bottlenecks to drive speed of service, real-time data exchanges and revenue enhancement.

The Results: 
  • Rapid detection and early completion of ERP conversion provided comprehensive data to help business leaders gain control of inventory, financial data and a holistic view of business processes to meet go-to-market challenges, achieve market differentiation and gain competitive advantage
  • Full automation of credit card processing and PCI compliance restored customer trust in data security
  • Business process innovations enhanced e-commerce platform with trigger-based updates reflecting real-time information
  • Skewed inventory visibility was resolved through e-commerce engine redesign. Total product inventory transparency allowed customers to select any product from any location. This differentiated customer value and contributed double-digit growth
  • Fully automating the Warranty and Return claim process delivered credit refunds for most customer claims within 24 hours vs. six weeks. Customers were delighted to be able to pay any invoice with any payment method, including “accumulated credits,” to better manage their cash flows
  • Implementation of Cloud-based API solution made ReliableParts a digital standout and market leader. Onboarding of big box retailers and home warranty companies was reduced to under two weeks. 
  • OpenText EDI adoption enabled a demand-driven business model with real-time visibility to transaction status. Reducing transaction errors propelled remarkable improvements to data quality and productivity.
Metrics: 

ERP conversion saved more than $1.8 million in infrastructure, licensing, operations and maintenance. It delivered process efficiency gains and boosted cash flow. Financial close was shortened from 20 to 10 days, a 50% gain.

All digital channels are integrated, and e-commerce site is optimized for digital shopping with a 3-second or less load speed. Customers access credit balances to pay invoices in real-time vs. three days. Changes spurred sales growth of 26% for wholesale platform and 90% for retail platform. Company valuation rose to 16 times EBITDA.

The credit refund time for Warranty and Part return claims was cut to 24 hours from 6 weeks by using workflow driven dynamic webform and automated data feed to suppliers with real-time APIs. This reduced operating costs by 80% and eliminated a yearly loss of $1.8 million.

Investment in new Cloud API platform cut customer integration time by 87% and development cost by 92%. Newly won big box retailers and home warranty companies brew revenue by 41% in a segment that had been flat. 

OpenText EDI automation solution sliced annual support costs by 40% and application outage time by 65%. A 100% ROI was attained in 14 months by reducing data transaction errors by 30% and chargebacks by 42%.

The Technology: 
  • EvolveWare to automate conversion of legacy code into Cloud-friendly languages.
  • AWS Cloud for digital commerce websites. WordPress for B2B content management. Majento for retail websites
  • Agile and DevOps framework, Customer Journey mapping and Product mindset with design thinking
  • Boomi API (low-code integration Platform as a Service [iPaaS])
  • OpenText EDI
  • Amplifi.io Cloud-based content management solution
  • AWS Data Lake for dashboards, visualization and big data analytics
Disruptive Factor: 

In becoming a digital-first enterprise, ReliableParts attuned to the desires of customers at a granular level. Its bold decision to challenge deep-set industry norms molded a customer-first strategy that redefined service excellence. It deployed best-of-breed components to disrupt industry practices and fully empower customers with open access to inventory, rapid credit refunds, smart automation, streamlined onboarding, and even customer selection of invoice types and payment methods. In addition, modernization of API, central to big box retailer and home warranty companies, accelerated integration to two weeks vs. several months. Those upgrades generated dramatic growth, moving from 10% to 45% market share, earning the #1 position in that important sector, where rapid growth continues.

Reliable Parts’ core supply chain process changed from balancing cost and service levels to achieving premiere customer relevance with a targeted value proposition, resilience to wide swings in supply and demand, and alignment with customer values and corporate mission. Reliable Parts’ digital omnipresence and technology-enabled dexterity is driving entry into new markets and partnerships, enhancing customer intimacy and producing even greater efficiency gains. Its market success is reflected in achieving a market value of 16 times EBITDA, equal to a high-performance technology enterprise.

Shining Moment: 

Trust earned on a challenging ERP conversion facilitated a game-changing digital transformation to reimagine the business’ operating model and enable deep customer understanding. Specific ROI targets were achieved for profitability, sustainability and customer trust. Strategic projects in ERP, IoT, Analytics, API, Digital and Mobile spurred dramatic growth. The Cloud-first, digital/intelligent enterprise strategy propelled the firm over competitors in sales and customer satisfaction.

About ReliableParts

ReliableParts is “The House of a Million Parts”. Our "most in stock" promise gets our customers back to full speed faster with the right part at the right time, every time. Our 800 employees deliver more than 10,000 orders a day with 97% fill rate and a track record of delivering orders to 95% of the U.S. territories in two days with 99.8% shipping accuracy.