5 Questions to Ask When Simulating Service Parts Scenarios

As a service leader, does your global spare parts network enable high asset availability? Using service parts optimization software that simulates service scenarios will allow you to assess whether your inventory can fulfill customer service demands and how changes to your inventory may affect your business.

Here are five questions to ask, the challenges in answering these questions with good data, and finally, why your service will benefit from the advanced modeling capabilities in a service simulation.

1. Am I meeting my service targets?

This is easy enough to answer through simple performance monitoring. The problem with this question is that it turns your focus towards to historical data, distracting you from anticipating future conditions.

2. What will my inventory look like over the next year?

This is difficult to project. You need to analyze a combination of historical data and forecasts based on ideal-but-not-realistic lead times on service parts. Are you currently able to account for trapped inventory or parts variability?

3. Is the service I measure aligned with my service planning?

To answer this question, your business will have to reference user experiences and expertise to properly calibrate. This condition is difficult to replicate or scale across your organization. Service reality is dynamic, and even your most senior parts planner will have an inherent bias or blindness when it comes to how your business meets internal and external SLAs.

4. My business is experiencing too many disruptions. How do I evaluate the financial impact?

Often, this requires external analysis from outside consultants, and even those results only produce rough estimates despite the extensive work that goes into engaging such third parties. If you are constantly overbuying stock to make up for a lagging supplier, or are failing to meet fill-rates because your service forecasts are off, can you measure the impact to your bottom line and customer service levels?

5. When will service parts excess be burned? How long before I recover from a service parts shortage?

Here you’ll experience the same challenges that you did when looking at inventory over the next year. Historical data and lead time projections are not forward-looking, so measuring impact into the future is difficult without advanced modeling provided in a service simulation.

Because of the inability to model real life, the extensive effort required, and the low reliability of results, many forecasts end up being inefficient and unproductive exercises. With a Monte Carlo simulation and an experienced partner, you can model:

Service Metrics:

• Unit and line fill rates.
• Instantaneous and n-hr fulfillment (4hr, 8hr, etc).
• Customer-facing and overall fill rate.

Real-Life Modeling:

• Forward-looking, accurate pictures of inventory, including defective units.
• Stochastic Lead Times, with lopsided distribution.
• Variable order size for line fill rates.

To learn more about the impact of holistic service parts management solutions to your business, you can take our assessment here: