2005 Supply & Demand Chain 100 Case Study  SARCOM / System Design Advantage

Profiles in Supply Chain Enablement: Inventory asset management helps assure the right part is in the right place at the right time

Company Size
Company Sector
Area(s) of Enablement

SDCE 100 2005 Case Study:

The Challenges

  • Reduce service parts inventory.

  • Increase service parts availability in multiple remote locations.

  • Remove the need for customer-owned parts and service company-owned parts.

  • Take away the risk of service parts obsolescence.
The Solution

  • Inventory asset management being administered by a parts service company.

  • Combining a parts pooling business model with an international distribution-logistics service company allows collaboration of the service parts industry along with the logistics service industry.

  • The technology available today provides the platform for communication via electronic data interchange (EDI) ordering, 24x7 customer support and "ExtraNet" service parts ordering.
ROI (information from System Design Advantage)

  • Immediate, no-cost entry on maintenance contracts and full parts deployment with a positive ROI projected in the first month.

  • Changing fixed inventory cost model to a variable per use parts cost model allows contracts to return positive ROI on day one of new business.

  • A 10 percent to 80 percent inventory cost savings over the life of the contract.

  • Additional remote inventory handling and inventory carrying costs savings of 22 percent compared to market logistics providers.
Next Steps

For more stories of successful supply chain implementations, read the "2005 Supply & Demand Chain Executive 100" article in the June/July 2005 issue of the magazine. Also watch the Today's Headlines section of SDCExec.com every Tuesday and Thursday for more in depth best practices drawn from this year's Supply & Demand Chain Executive 100.