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Managing spares inventory for service delivery channel

Spares inventory for service delivery

Availability of spare parts on demand can make the difference between a happy and an angry customer. Unavailability can also lead to multiple visits by the repair technician. Spares are valuable assets and must be tracked. Many service organizations build their reputation on “genuine spare parts”. Some spares may even carry warranty and that needs to be managed too.

It is thus imperative to manage spares inventory for service delivery- in all parts of the channel.

Parts movements through service delivery channel

Central procurement and stocking

Most organizations procure spare parts centrally- whether they are manufacturing themselves or providing service for someone else. Central procurement and stocking has multiple advantages. Some are: quality control, ability to drive a good bargain with suppliers etc. Also, in engineering industries, there is a need to standardize on the parts.

Parts movement in service delivery

The hub and the spokes

We described the hub and why that needs to be there. Yes, the central warehouse. But, local stocking of parts is needed as well in many cases. How local? Regional/ branch offices, surely. But, sometimes, the customer might buy parts and store it at site as a risk mitigation strategy.

As an aside, in a previous job at a distant past, no sale was complete without the “RMSPK” (Recommended Maintenance Spare Parts Kit). The customer assigned approximately 10% of the hardware value to parts which he intended to buy and keep with the equipment.

Some companies provide support through a network of service dealers. Dealers need to  keep spares inventory for service delivery. They also need to have a way of ordering and receiving parts from the central warehouse/ regional offices.

Spares inventory for service

As the dealers order and receive parts, the company also needs a way to monitor parts stocked at various points on its service delivery network. Ideally, every time a part is used in a service call, information should flow back to the company which can use this information to keep tabs on its stock of parts spread all over the country.

Deciding on an appropriate level of spares inventory for service

Trend of spares consumption data is a key indicator of planning for stocking appropriate spares. Factors like seasonality and machines population data are used to forecast. Then of course other variables like lead time of spares ordered, MOQ and EOQ are all factors.

How a service CRM helps

A service CRM completes the cycle at a customer location- at multiple locations in fact. It helps you track your sales efforts to culmination and beyond. Helps you solve customer problems after sales and installation and beyond. And more than anything, it opens up opportunities for future sales by managing customer relationships.

A service CRM depends on effective management of spares inventory for service effectiveness. A good service CRM will not only help you track stock of spares at various points in the service delivery channel but will also help track usage at customer sites and use the data to monitor effective utilization of spares.

 

 

 

 

 

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