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Service Parts Supply Chain Best Practices & Considerations – Part 1

Last modified: April 27, 2017

Supply chain management, particularly within the service parts supply chain, has grown dramatically over the past 20 years. With the collapse of the US economy in 2008 and subsequent economic disturbances, such as the currently ongoing issue of Greece, service parts supply chain entities have found themselves cutting back in inventory, available staff, and distribution centers. However, this presents a sole ultimate conundrum: you do not have the resources on-hand to deal with erroneous delays, inept supply chain management providers, and an inability to satisfy your customers. Consider this scenario:

A person places an order for an extensive new computer system. The order is delivered by your workers on-time, but the consumer returns later with malfunctioning equipment. Upon contacting customer support, you discover you need a unique circuit to repair the problem. Unfortunately, the circuit routinely costs $150, and you do not carry circuits on-hand with values beyond $100. Moreover, stocking an unlimited supply of such circuits could easily cost $10,000 for 100 individual pieces. Now, that does not take into account all of the other various, more commonly needed parts for repairs.

How do you make a determination of which circuits to keep on-hand with constantly updating models and needed service parts without going bankrupt? To add insult to injury, you cannot obtain the needed part for a time period of at least one week. The consumer needs a working computer today. Your only option is to refund the money to the consumer, refurbish the product, and attempt to resale the item at a lower cost. This is where a service parts supply chain management provider, such as Flash Global, can assist you.

Aspects of the service parts supply chain can be broken down into seven general categories. They include the following:

  • Inventory Management.
  • Parts Delivery.
  • Collection of Outdated, or Defective, Merchandise.
  • Management of Returns.
  • Refurbished items and Repairs.
  • Technical Assistance.
  • Engineering Management.

Within this post, the first of a three-part series, we will take a look at how the first two categories of successful supply chain categories play into the successful scalability and overall success of your business.

Inventory Management

As seen in our example, no business can successfully keep all necessary parts for repairs in-house. However, data analytics provide detailed conglomerations of data for which areas routinely experience rises and falls in general demand. The resulting information can provide insight into which parts are most-likely to be needed across various time periods. This is how the service parts supply chain management provider generates a reliable, accurate forecast of your needs. Now, tracing the service parts supply chain requires an even more intensive effort to ensure the provider meets all necessary local, state, and federal laws in varying countries. Flash Global’s footprint extends to 80 countries, which allows for the rapid deployment, redirection, and fulfillment of service parts at any given time in practically any country.

Parts Delivery

Recall from our example the consumer in need of a functioning item and the business owner incapable of making the repair on-sight instantly. This problem could have been resolved through the use of a service parts supply chain provider.

Furthermore, inventory management should not require constant monitoring by individual businesses. Instead, Flash Global’s centralized supply chain systems thru FlashTrac and five networked supply chain command centers ensure all orders are rapidly processed, shipped, and verified upon delivery. On the end business-user side of the service parts supply chain, the system automatically tracks the sale and use of specific items, such as those for repairs in the example, and automatically generates a request for additional parts at the distribution center.

When considering parts delivery, have you thought about the individual costs of such actions? For example, sending an item on a delivery truck sounds easy. However, the truck will incur the cost of the driver, gasoline, time spent in-transit, and any fees associated with the transport of goods, such as tariffs, taxes, and fees for transporting items between countries and individual states and regions within such countries. Parts delivery encompasses a whole new aspect of the service parts supply chain as it literally provides the mode of transportation for ensuring all aspects of the service parts supply chain maintain their responsibilities, i.e. processing orders for businesses and delivering items to businesses, and therefore, to their consumers.

Inventory management and parts delivery are easily identified as the most significant aspects of the service parts supply chain. Flash Global provides these services at a fraction of what businesses would otherwise spend performing these operations in-house. In the increasingly digital world, not only is managing the service parts supply chain in-house impractical, it has become impossible due to the sheer volume of service parts available on the market.  Do not forget to come back for our next post on how the collection of defective merchandise and management of Returns Management Authorizations affect the service parts supply chain and why you need Flash Global’s services.

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