Mitigating Global Service Logistics Disruptions by Being Smarter About Spare Parts Delivery
Major logistics disruptions such as the COVID-19 pandemic can cause chaos throughout global supply chains. Indeed, since the start of the pandemic, supply chain shortages have been plaguing industries across the board, from energy to retail and telecommunications to medical devices.
One of the few silver linings of the pandemic is that it’s uncovered critical weaknesses in the global supply chain–particularly regarding spare parts delivery and replacement parts delivery–that can be strengthened to avoid future problems. These “inconvenient truths” can serve as opportunities for learning and improvement in terms of bolstering global service parts supply chains.
Global Service Logistics Disruptions
Clearly, negative impacts to global service supply chains from black swan events such as the COVID-19 pandemic are inevitable, even when companies are well-prepared. However, better preparations can reduce the level of impact of a global logistics disruption to a global service level agreement (SLA), thereby reducing the time to recovery.
In order to mitigate future global post-sales service logistics shocks, companies have to be smarter about their global parts delivery. They need to form a bona fide partnership a knowledgeable global post-sales logistics provider such as Flash Global that can collect and utilize valuable post-sales logistics data to provide keen visibility and insight into their post-sales, service level delivery requirements.
Flash Global’s customers have spare parts they stock in forward stocking locations (FSLs) around the globe in order to meet two-hour (2HR) delivery, four-hour (4HR) delivery, or next business day (NBD) delivery service level agreements. When countries all over the world shut down due to the pandemic, moving products across foreign borders became incredibly difficult, especially time-sensitive products like replacement parts.
During the initial economic shutdowns of the pandemic, we worked closely with our in-region partners to understand changes to the logistics situation in their countries; we used that information to formulate solutions to the logistical problems the shutdowns caused. Our unique, proprietary data collection and utilization methods enabled us to create and execute replenishment strategies with our customers to ensure they had spare parts in their respective foreign markets that could meet their needs; taking into consideration changes to their volume patterns and transaction patterns due to the shutdowns and the pandemic at large.
With solid logistics data at our disposal, we were able to quickly identify which countries our customers might have a problem in. Armed with this information, we were able to work out efficient replenishment stock strategies with them to mitigate the challenges they would face in those countries.
Being smart about global logistics is adapting to rapidly changing circumstances, and given the supply chain disruptions of the pandemic, some of our partners have come to realize that moving product into their international forward stocking locations on a just-in-time (JIT) basis doesn’t work in the turbulent global parts delivery world of today.
The pandemic has shown some of our partners that it’s better to store more inventory in FSLs than it is to employ a JIT strategy. However, storing additional inventory can be expensive…storing too much can mean unused product. It’s imperative that our partners execute a global SLA strategy using data that informs them of where they might need to have additional seed stock and where they might need different routing guides to get service parts into certain markets.
And that’s why we’re here: We employ our proprietary data collecting and utilization methods to help our partners ensure that their customers can meet their service level obligations during extraordinary circumstances, thereby creating predictability, consistency, and visibility in their service parts supply chain.
As the COVID-19 pandemic has shown, black swan events can spawn critical supply chain issues. Given the turbulent nature of today’s global supply chain environment, it is imperative that companies that have service level agreements in foreign lands partner with an intelligent post-sales logistics provider like Flash Global to mitigate such disruptions.
So, what’s your next move?