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.
In the realm of service supply chain optimization, where precision meets performance, one name stands out: Servigistics, a pioneer in delivering unparalleled results. A recent study conducted with a leading OEM and its dealer network illuminates the transformative power of integrating and jointly optimizing OEM and dealer service supply chains. This research underscores the impact of Servigistics' differentiated optimization offering and heralds a paradigm shift for OEMs with dealer networks.
The study's results speak volumes. By optimizing OEM and dealer networks within one integrated service supply chain, remarkable improvements were achieved over isolated, independent models. Notably, forecast performance saw a staggering 39% reduction in OEM demand variability within the integrated model compared to the independent OEM model. Moreover, the integrated model exhibited a 64% decrease in under-forecasting and a 34% reduction in over-forecasting, demonstrating unparalleled accuracy and efficiency.
"This study reaffirms our commitment to revolutionizing service supply chains," said Chad Ross, Vice President of Servigistics Business Transformation at PTC. "Servigistics is not just a solution; it's a game-changer, enabling our clients to unlock unprecedented value."
Beyond forecast improvements, the study shed light on inventory and service performance enhancements. In the integrated model, where OEM-planned stock levels are known and OEM-to-dealer wait times are explicitly modeled, a 9% service loss was mitigated. Remarkably, despite this, the integrated OEM dealer model achieved a 92% fill rate while reducing planned inventory by 11%.
This remarkable feat underscores Servigistics' ability to deliver higher service levels with less inventory, revolutionizing the industry's approach to inventory optimization. “With impressive precision, Servigistics can transparently and quantifiably deliver greater results than any other solution,” said Dr. Vipul Agrawal, Vice President of Servigistics Product Management at PTC. “Independent third parties, including the US Air Force, Lockheed Martin, Capgemini, and others, have validated these impactful conclusions.”
A meticulous review of the methodology reveals the robustness of the study's approach. Three distinct models were created and evaluated. By aligning demand forecasts with customer orders and integrating inventory plans, Servigistics ensures seamless coordination across the supply chain, eliminating inefficiencies, and delivering greater outcomes.
“The study's implications are meaningful,” said Chris DeRonne, Servigistics Business Transformation Principal, PTC. “The methodology, calculations, and findings are independently verified and can be replicated to fit any other service supply chain model to assess the precise impact on other scenarios.”
Servigistics has proven the success of this integrated service supply chain optimization with clients in many industries. Most of the OEM customers manage inventory in the entire supply chain right up to customer-facing demand locations. Terminology may vary, but the concept and strategy are the same whether the service network is comprised of dealers, distributors, bases, operators, technician vans, or 3rd party service providers. For many clients, this represents over 10,000 locations across 6 to 7 echelons optimized together in Servigistics.
“Servigistics’ Multi-Echelon Optimization is a powerful differentiating factor," Agrawal said. "Optimizing the entire service supply chain across all locations and echelons in a simultaneous and holistic optimization motion is crucial to achieving these outcomes.”
The impressive results of integrated demand forecasting, based on end-customer orders, mitigates the bullwhip effect, while integrated inventory optimization incorporating OEM wait times eliminates service loss. With complete visibility into the supply pipeline and synchronized inventory plans, OEMs and dealers alike stand to reap substantial cost savings and operational efficiencies.
Agrawal emphasized, “Servigistics' integrated solution is underpinned by four key capabilities: improving forecast accuracy, modeling service levels accurately, reducing supply chain variability, and optimizing asset positioning.”
These capabilities empower organizations to unlock untapped value, driving growth and competitiveness in an ever-evolving landscape.
The findings of this study are a testament to Servigistics' unwavering commitment to innovation and excellence. By integrating and optimizing OEM and dealer service supply chains, Servigistics has redefined the benchmark for success and unlocked a world of possibilities for its clients. As the industry embraces the era of integrated optimization, Servigistics remains at the forefront, empowering organizations to thrive in an increasingly complex and dynamic environment. With Servigistics, the future of service supply chain optimization is brighter than ever.
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