Spare Parts Planning & Optimization
Companies today are adopting after sales service as a strategic differentiator. After sales service is also becoming an important criterion for influencing buying behavior. With sales margins decreasing day by day, it has become important for business organizations to focus on the aftermarket, which is a highly profitable segment.
A necessity that can’t be overlooked!
Customer satisfaction is, thus, extremely important when it comes to spare parts management. Availability of right parts at the right location has become a critical success factor and business organizations need to make sure that they implement the most suitable strategies for spare parts planning and optimization.
However, the distributed nature of the spare parts supply chain, the relatively large number of SKUs, the varying demand patterns, etc., all add up to make spare parts planning and optimization an extremely complex function.
Key Challenges Faced By Organizations Today In Spare Parts Optimization
When it comes to spare parts planning, the contemporary business enterprises have to face a number of challenges. These challenges and their impact on spare parts planning activities are given as follows:
| Parameters |
Business Challenge |
Impact on Spare Parts Planning |
| Demand characteristics |
- Varying demand patterns – Trend, Seasonality, Intermittent
- Abnormality (Known and unknown causes)
|
- Complexity in demand modeling, leading to high forecast error
- Additional stock to compensate for poor forecast
|
| Supply risk |
- Spares requirements are treated as "Secondary"
- Vendor service reliability; multiple vendors with different service levels
|
- Excess safety stock to compensate for supplier unreliability
|
| Part Characteristics |
- Different part types – Fast / Slow Moving, Critical Parts, High / Low Value
- Parts specific to low volume model
|
- Planning for differentiated service levels
- Different stocking strategy for different types of parts
|
| Dealer Order Variability |
- Frequent cancellation of orders by dealers
- Urgent orders from dealers
|
- Frequent re-planning to adjust for canceled / urgent orders
- Difficulty in meeting targeted service levels
|
| New & End-of-life Parts |
- Frequent introduction of new parts
- Supply of phased out model parts
|
- Lack of demand data for new parts
- Difficulty in capability planning for end-of-life parts due to unavailability of long-term forecast
|
Thus, complexity in spare parts supply chain necessitates careful planning of multiple factors to achieve targeted service and optimal inventory levels. For businesses which require expert spare parts management and optimization services, Research2Systems offers great solutions.
Research2Systems Spare Parts Planning & Optimization Solutions
We, at Research2Systems, understand the criticality of effective spare parts planning and cost optimization. We have developed advanced solutions in the areas of spare parts demand and inventory management, which would ensure improved availability of spares, at the optimum supply chain cost.
Our Spare Parts Demand Management solutions include:
- 16 Advanced Statistical Forecasting Techniques
- Moving Average, Exponential Smoothening, Box-Jenkins, Seasonal Mean, Croston’s and Probabilistic forecasting techniques for discrete distributions
- Goodness of Fit test and Simplex search for optimal parameters
- Central Limit Theorem based abnormal demand detection and Auto Event tagging
- Part profile based new parts forecasting
- End of life forecasting using component installed base and consumption profile
Our Spare Parts Inventory Management solutions include:
- Stocking strategy based on multi-factor analysis – Value, Quantity, Demand variability, Criticality
- Multi-echelon inventory optimization for distributed stocking
- Optimal inventory norms based on inventory planning parameters
- Simulation of inventory norms to assess service level and inventory level impact
Make the best use of Research2Systems expertise in Spare Parts Planning & Optimization, and maximize your business profits, like never before!
Contact us today and know about our Spare Parts Planning & Optimization solutions in detail.
