Last modified: September 11, 2016
A successful business relies on the correct function and continued achievement of needs from all aspects of the supply chain. The supply chain encompasses collecting resources, unit manufacture, unit assignment with corresponding orders, order fulfillment, repair of damaged or malfunctioning products, addressing end-of-life equipment, and ensuring customer satisfaction. Unfortunately, many of these processes rely on the continued presence of easily accessible service parts throughout the entire manufacture-to-customer-to-anyone-else process. Furthermore, a proverbial “missing screw” within the Service Parts Supply Chain may cripple all of the subsequent processes and deter future customer-business relationships. As a result, more businesses have recognized the importance of optimizing the Service Parts Supply Chain globally through third-party logistics providers (3PLs).
Current Service Parts Supply Chain Problems
Current-day products consist of an immense amount of interchangeable parts of modern products, which can vary across a wide spectrum, be it hinges or motorized toys and more – this poses a challenge to traditional Service Parts Supply Chain practices. The wider net of product delivery locations along with competitor parts’ manufacturing combines to increase the risk of many inconsistencies within the Service Parts Supply Chain’s rapid growth. John Reichert identified three main problems within Service Parts Supply Chains on SupplyChainBrain:
Additionally, Anantha Shankar explains further there are more issues with traditional Service Parts Supply Chain practices. These include multiple suppliers, inadequate inventory tracking, repair delays, inventory shortfalls, and failure to maintain visibility. Encouragingly, everyone of these issues have the ability to be resolved with the use of a 3PL provider of Service Parts Supply Chain solutions.
What to Expect From a Service Parts Supply Chain 3PL
End users expectations of order fulfillment include timeliness and affordability. However, this can equal lost profits without pinpointing and employing efficient methods right away. When 3PL is used, it ensures top effectiveness during each order fulfillment process and confirms all orders arrive as promised despite unforeseeable hurdles. One way would be an unexpected cancellation or delay of a shipping flight being rerouted to another on-time flight to avoid all delay or upset by the customer via 3PL sourcing.
Reverse Logistics Solutions
Toward the end of the usable life of a business’s equipment, it is taken out of circulation. Yet there is another option besides the garbage bin and risking violations of city, state or government e-waste laws. 3PL provides a Reverse Logistics Solution (RLS). This RLS takes on the repurposing of your units and even adds financially to your organization’s profitability. This is done by the income generated by the resale of the equipment, from recycling for reuse the unit’s metals and saving the cost of disposal or any potential fees.
Distribution and Parts Forecasts
3PLs affect the Service Parts Supply Chain through the effective disbursement of units in demand. One way is by making sure many varieties of units and parts are easily accessible. Should a part not be found within a business’s inventory, a 3PL can often have another local source available for the desired units or parts. Through manufacturer agreements and the 3PL, multiple places may provide parts purchase opportunities and save companies from being required to obtain it from their competitors. The use of targeted analytics ensure correct forecasting of needed parts through the 3PL. Predictive ordering means you can have exactly what you need on hand for the holidays of high-priority parts even before realizing you are short on inventory. This protects your business from falling short of your customer’s demands. The 3PL makes those occasional orders from the trends taking place in the market to help automate the process of meeting your supply needs prior to the demand arriving on your doorstep.
Repairs and Customer Satisfaction
Once an end-user asks for a refund on a returned product, repairs come into play within the RLS. Big items and gadgets can often be handled rapidly in the repair department for a small cost as compared with the amount returned to the customer. Based on your established agreement, 3PLs can affordably make the necessary repairs. Beyond those repairs, you now have the opportunity to offer refurbished products for a small discount to your customers and make a profit in the process. By focusing on happy customers, the 3PL Service Parts Supply Chain provides the needed “service-after-the-sale” follow up.
Supply Chain Modeling
This example figure below details how a supply chain functions for service planning and execution. The solid arrows represent forward material flow of usable spare parts. Dashed arrows represent material flow of repairable defective parts.
Successful Global Scale for Future Business
With more remote orders than point-of-sale purchases, a lackluster Service Parts Supply Chain will eviscerate an organization’s customer base. Fortunately, 3PLs give businesses a reliable Service Parts Supply Chain and head off future issues and your company is spared the capitalism from industry rivals. Instead, it optimizes every point of the supply chain, particularly sensitive processes like your needed service parts staying fully stocked to meet demand within the company’s pipeline.
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