Disruptions in service can trigger painful penalties if a company violates the Service Level Agreement (SLA) it has with its customers. While SLAs have been used for years in IT companies, they have recently become popular for other companies too.
NedTrain knows about the problems that SLAs can bring because in the past they had trouble meeting them. The company, which is based in the Netherlands, supports train operators and owners by maintaining, modifying, and upgrading railroad cars and locomotives on a 24/7 basis. That means it has to keep a tight handle on inventory and move it to where it is needed, sometimes on short notice.
Under NedTrain’s agreement with the Dutch national train service NS, it was supposed to maintain almost 3,000 units so that no more than 170 trains would be out of service at any time. But NedTrain had a hard time reaching that goal on a consistent basis, which forced NS to spend money on more trains. And it also made it hard for NedTrain to attract and retain other clients.
NedTrain turned to PTC for help. In order to meet its service level agreements with NS, it needed to do a better job of maintaining parts availability across nine main locations, 35 service locations, and 65 warehouses. And the company also wanted to reduce the amount of inventory on hand. Those seem like contradictory goals, but in fact, it was able to achieve them both with an optimized service parts supply chain.
NedTrain deployed PTC’s service parts management software solution across its inventory network. SPM helped them offer better service without increasing their inventory. They were better able to plan for both typical parts usage and unexpected incidents. And SPM integrated with NedTrain’s existing ERP system, which saved time and resources when it came time to make the switch.
Now that NedTrain can meet its SLA obligations with NS, it can be confident that it will be able to offer a similar level of service to new customers. According to NedTrain Planning Manager Bert Postema, “If we don’t meet our customer commitments, our customers cannot meet theirs. That’s why we chose PTC, and we are delighted with the results and the customer satisfaction improvements it has helped us achieve.”
Service level agreements were just one piece of NedTrain’s puzzle. It was also able to move much of its inventory from six maintenance centers to one new central distribution center. NedTrain can now coordinate stock from more than 500 suppliers and move more than 200,000 parts per year without bottlenecks and delays. You can learn more about their success with service parts management in our NedTrain case study.
Bradley Rhoton is the Marketing Manager for the Servigistics Business Unit at PTC. He leads and organizes the Servigistics client affinity group organizations and facilitates best practice sharing and knowledge transfer between PTC, PTC clients and industry thought leaders. For 13 years he has worked closely with Servigistics clients to help capture their service program accomplishments and share their success stories.