Mission-critical service parts logistics is a unique subset of supply chain management that can be challenging, yet profitable for manufacturers. While logistics execution in the manufacturing process revolves around a "just in time model," the world of mission-critical service parts hinges on a "just in case" scenario.

These service parts are critical to the performance of high-tech equipment that cannot tolerate extended downtimes without causing costly operational disruptions. This encompasses a wide range of technology, from network servers and data storage devices to IP communications systems and medical equipment.

Although preventative maintenance and demand history can help, it is difficult for manufacturers to pinpoint exactly when and where the next piece of equipment will fail. Regardless, service level agreements (SLA) commit them to be prepared and react to the unknown, or face the risk of significant fines and a damaged relationship with customers.

For mission-critical service parts, availability and repairs are further compounded by an extreme sense of urgency. Outages must be curtailed to only a few hours at most. To keep equipment operational under these strict parameters, field engineers must have access to service parts within two- to four-hours. The complexities involved with managing these expedited services commands comprehensive expertise and extensive resources.

To control this process, some manufacturers mistakenly assign service parts management to field engineers. While this may seem logical, it is not an effective use of their expertise. Resources are wasted when highly trained and skilled engineers are burdened with tracking and delivering service parts. Plus, it is incredibly inefficient in terms of inventory control and cost management. There must be a dedicated service parts logistics process in place to manage the high-velocity flow of inventory for expedited usage.

Typical Challenge

A multi-billion dollar international provider of digital document management including printers, scanners and copiers has significant mission-critical service parts needs, as its equipment serves a broad spectrum of Fortune 50 and 500 companies. These large organizations in industries such as finance, publishing, legal and government, rely on the provider to deliver solutions that enable 24/7 productivity.

With more than $15 million of high value service parts inventory ranging from $75,000 to $100 per unit, a reliable logistics process that could deliver parts as expeditiously as possible, without compromising performance with lost or damaged equipment was required. To face the challenge, the company employed a comprehensive mission-critical logistics solution comprised of a global IT platform and forward strategic stocking locations to ensure they could meet the demands of their end-users and fulfill SLA obligations.

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