To face a “new normality” characterized by volatility and uncertainty, a possible way for the spare part world is implementing short, transparent, redundant and flexible supply chains. This was highlighted by a recent webinar organized by Asap Service Management Forum.
by Elena Corti
The management of spare parts is strategic, especially in the prospect of a “new normality” in which companies will to operate in a context of uncertainty: a resilient service supply chain can in fact contribute in business revenues (especially in view of possible drops in finished product sales) and assure the operation and the continuity of the service to customers. In the ambit of a webinar organized by Asap Service Management Forum, community that involves companies and university research centres, Nicola Saccani (RISE Laboratory, Brescia University) presented the results of an investigation carried out at the end of 2019 about the management of spare parts (over 60 companies mainly in the sectors of household appliances/heat engineering, machinery and automotive) and of a successive survey executed in March-April 2020, aimed at investigating the impacts of the pandemic on the spare part world (177 companies in the sectors of capital goods and durable/non-durable consumer goods). Let us see the main results.
The delivery punctuality is more important than the spare part price
One of the main themes investigated by the pre-Covid research concerns performances: over half of the sample tries to fulfil job orders from the warehouse within 24 hours and in big appliances this target is the praxis. The service level (i.e. the percentage of job order lines fulfilled on time) is on average satisfactory: about 50% of interviewees declared targets are reached 9 times out of 10. Another aspect analysed in the survey concerns the punctual control of the shipment when goods leave the warehouse. 65% of companies stated they carry out such control, however this often does not mean the information availability in real time: only few companies integrate the date of effective delivery to the customer in their information system and measure the carrier’s’ performances punctually. Regarding customers, what they deem most important – in the opinion of the enterprises taking part in the survey – is the product availability in stock, followed by the promised delivery time and by the delivery punctuality. Therefore, promotions and sale price of spare parts are not perceived as a critical variable whereas purely logistic performances are judged very relevant.
Strategies to manage the impact of Covid-19
The investigation carried out in March/April revealed the service sale was less affected by the pandemic than the product sale, especially if we consider advanced services and servitized business models. Moreover, if we examine the Coronavirus effect on the operations connected with after-sales services, around 30% of interviewed companies did not suffer from significant or very significant discontinuities in the supply of spare parts or in the network of service partners that buy and/or mount them. How can we face this type of situations? Saccani presented a possible “formula”: implementing a short, transparent, redundant and flexible supply chain. The short supply chain implies the shift from a global vision to a local vision (or multi-local for the companies with a global business). In terms of spare part logistics, this means for instance to have stocks positioned close to customers, so that it is more probable to succeed in supplying them also in discontinuity situations. The transparency matter refers instead to the visibility concept and then to the capability of collecting and integrating information at supply chain level, to have a constant tracing of spare parts. It is necessary to create more integrated supply chains guided by data, working in proactive and predictive way. Finally, the redundancy theme concerns the risk management. It is important to carry out a risk analysis connected with suppliers and with all other possible causes of discontinuity of the logistic chain and to create some alternatives (alternative suppliers, alternative logistics) to have a B-plan at disposal. Then, flexibility is associated to redundancy, that is to say the reorganization capability to solve a criticality. Concerning this, a possibility is represented by 3D printing, as explained Massimo Zanardini from the university spin-off IQ Consulting. Additive technologies not only allow implementing complex geometries (and the production cost is independent from complexity) but they also enable the production on demand and on site: therefore, in the ambit of spare parts they can determine positive effects on both the management of operations and on the configuration of the supply chain. In household appliances, some companies are already experimenting 3D printing for the spare part printing: Miele, for instance, availing itself of a site dedicated to the sharing of object files for 3D printing, has made available for end-users the CAD models of some components of its products, so that the user is enabled to manufacture spare parts. Another case mentioned during the webinar is inherent to Groupe Seb that, for some years now, has been working at the digitalization of its spare parts, with the aim of dematerializing its warehouse, freeing space, reducing the cost of stock financial immobilization and producing spare parts when it is necessary.