The importance of the logistics component of this process cannot be undervalued, the experts say. If you do not have the network in place to deliver the parts, planning to ensure that the right part is at the right place at the right time is a waste of time.
The Planning Imperative
That being said, industry observers note that planning is the essential ingredient to any successful endeavor, and that this has never been more evident than in service parts management. You need a planning vendor that is experienced and knowledgeable, who will work side-by-side with you to lower costs, improve service and build your business.
According to Greg Baxter, CEO of Baxter Planning Systems, the key elements to successful parts planning and management are value, visibility and velocity. "If you can see exactly what's going on across your service supply chain at all times and can get the required spares into the hands of the engineers within the committed service-level agreement (SLA), you will consistently exceed the expectation of your clients who, in-turn, can pass these savings and benefits on to their clients."
Improving client satisfaction seems to be a running theme in service parts management, so it only seems logical to tap a solution provider with the highest level of customer support, continually working to raise the bar.
Ultimately, parts planning optimizes placement of warehouses and field stocking locations, locally and worldwide. It defines where your sites need to be in order to support customer contract commitments, and where existing sites are no longer needed. Planning optimizes the target stock level for each part number and site, providing intelligent logic to maintain the target stock levels through replenishment and rebalancing of inventory.
Does this utopia exist? It just might…
When discussing his parts planning experience, Craig Fix, global supply chain manager for automated test at Baxter customer Agilent Technologies, said: "The experience of our planning provider and the breadth of the solution offering were key differentiators resulting in Agilent standardizing on their platform. When the time came to make a decision on an outsourced service parts planning solution, this solution met all our near-term and long-term requirements." Agilent utilizes the service parts planning and forecasting solutions provided by Baxter.
Depending on the size of your company, experts say that you may select a tightly focused task-based planning model covering project-specific programs or product lines, or a specific time-based service offering or a fully deployed outsourced model. Whatever your need, it starts with parts, and parts start with planning.
Available to Promise?
Finally, managing allocations while processing orders is the backbone of efficient service parts management and customer service. The ability to respond immediately to a product or part availability request with an accurate delivery date, and then to follow through on the commitment, is critical to providing the highest level of customer service.
Improved capabilities in this area translate into a positive impact to the bottom line, resulting in increased revenues and profits through higher customer satisfaction, and decreasing the cost of goods sold. It is especially critical and difficult for today's leading enterprises to be able to manage supply commitments to customers when demand is greater than supply, as well as when products and parts need to go on allocation. After orders are taken, commitments are made to the customers that need to be honored — even as the order backlog or supply availability changes.
There are currently many companies exploiting the vast opportunities within this segment of SPM. Take Essel Propack, the world's largest laminated, seamless tube packaging company, which uses solution provider Adexa for its service delivery capabilities.
According to Ashok Goel, Essel Propack's vice chairman and managing director: "Being able to consistently deliver world-class customer service at an affordable cost is extremely important. Since tapping this opportunity, we have shortened lead times and planning cycles, reduced supply chain costs and increased on-time delivery performance, which has added significant, measurable value to our operations."