4 Costly Reasons NOT to Manage Your Service Parts Inventory in a Spreadsheet

service parts management

Why You’ll Regret Using a Spreadsheet to Manage Your Service Parts Inventory

It might sound like a good idea—using a simple spreadsheet to track your inventory and perform parts planning and management activities for your service department. After all, you already own spreadsheet software and many of the people in your service organization are fairly familiar with reading and editing spreadsheet files.

However, there are some key reasons why you shouldn’t be performing complex inventory management tasks in a spreadsheet. In fact, you might be draining profits because you aren’t making a small investment in an intuitive service parts management solution.

Do any of these reasons describe your organization?

1. You can’t accurately predict how many parts you need and when you’ll need them. Here are a few of the things you need to know in order to make sure you’re not stocking too many or too few replacement parts:

  • How often will a replaceable component break?
  • When and where will spare parts be needed?
  • How many parts will be needed at each site?
  • How should the parts be priced?
  • Will too deep of a price cut on a part cause a run on the item? Could this lead to a stock-out?

But, how concerned should you be with predictable stocking of spare parts? Consider this—in a recent study, service leaders identified not having the right part on hand as the top reason a customer service issue could not be solved the first time. 

2. You’re missing revenue opportunities. Your profits might be low because your spreadsheet doesn’t help you see your service department’s missed revenue. You might be losing service contract renewals or repeat purchases. You might have low stocking levels that are driving sales to competitors. All of this might be damaging your service and brand reputation.

3. Your inventory costs are too high. A spreadsheet might seem like an easy, convenient solution for logging and tracking your inventory. However, it doesn’t help you perform analytics and ensure you’re not investing too much capital in parts. Here’s some things to consider:

  • Are you holding on to excess parts?
  • Do you have obsolete parts in your inventory? 
  • Are your inventory costs inflated?
  • Do you have high expediting costs?
  • Are you encountering financial penalties due to missed SLAs?
  • Do you have high product service warranty costs?

You might not be able to answer these questions very easily if you haven’t invested in a service parts management solution that can perform some analysis on your inventory activities.

4. You’re providing a poor customer service experience. This is probably the worst way to hurt your service organization. Your customers aren’t happy because your spreadsheet isn’t helping you predict which parts you’ll need and when you’ll need them. The right parts aren’t available for the work you need to do today. Because of this, you have slow resolution cycles, low first-time fix rates, and high equipment downtime. All of this hurts customer satisfaction, your reputation, and your profits.

 What’s the solution? By investing in a service parts management solution that helps you predict what you’ll need and when you’ll need it, you can avoid these pitfalls. You might also notice that more customers renew their service contracts and cash flow to the company improves. You can find out more about how you can turn parts to profits in our white paper.

Learn how PTC’s Service Parts Management solution compares here.

PTC Parts for Profit White Paper

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