Heavy-Replacement Planning

Dec. 21, 2004

Some exceptionally long-life manufacturers, such as industrial machinery and aerospace, are leveraging planning software as asset-management and aftermarket trends take hold in those industries, says BearingPoint Inc.'s Mike Judd, managing director of industrial markets. Heavy equipment OEMs increasingly are being asked to maintain customers' assets due to equipment complexity, maintenance skills and rising costs, and OEMS are biting because they see better margins on replacement parts than original sales and leveler revenue streams, and they have the bench strength or can acquire it to maintain equipment. Now that the OEM essentially owns the asset management, they now own the forecasting and demand planning that they weren't doing before, says Judd, and they're using the demand tools differently. Configuration management, product life cycle management and MRO systems are feeding the demand plans -- not pricing and promotions -- allowing them to maintain, model and schedule the repair network. OEMs have been taking costs out of the operations, he says, in complex industrial markets reducing spare-parts cost of inventory by an average of 20%.

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