In the last article of our four-part series, we'll discuss the successes businesses have encountered as a result of using service parts management (SPM) technologies, drawing key insights from LiveWorx 2017.
Although there has been a historical need to manage spare parts, the methods behind this process vary. In continuing their service transformation, OEMs are looking to leave old, ERP-dependent methods behind and implement more sophisticated SPM solutions. At LiveWorx 2017, the power of a comprehensive service parts solution came through on several fronts.
PTC’s Service Parts Management has transformed businesses from aviation to heavy industry by helping them streamline and manage their spare parts supply chains, making data-driven decisions that take into account not only historical trends, but also dozens of other factors that affect part consumption. Commercial aviation giant Embraer achieved a 12.5% reduction in inventory by adopting SPM, and EMC saw a 98.25% part availability fill rate. Overall, organizations adopting SPM solutions can expect reductions in inventory and inventory costs, an increase in fill rate and part availability, and greater customer satisfaction.
Every organization wants to receive an ROI on SPM technology as soon as possible, but depending on the key performance indicators being examined, that path may not be a straight line to profit.
For example, a service operation with thousands of forward stocking locations (FSLs) across the globe may increase stock initially to ensure each location has the the correct part mix. Afterward, the SPM will assess demand for particular parts and determine how the service operation can fulfill customer needs without procuring additional parts. As a result, inventory across the FSL network will decrease over time.
Another factor to consider is that with each additional capability (multi-echelon optimization being one of them), there are incremental benefits that can be had even after implementing an SPM solution. Setting the correct expectations within your business unit and with your executive team will allow you to anticipate these result phases and know that implementation is progressing according to plan.
Benefits to your service organization will vary based on the complexity of your supply chain and the current state of your business. What is certain is that a holistic solution to service parts management is necessary to keep up with the pace of global business, shifting market dynamics, and rising customer expectations. The benefit your organization gets from SPM may come from inventory reduction, increased part availability, higher margins on service, or a combination of results.
To learn more about service parts management and begin the conversation with your cross-functional team, download our infographic:
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