Is Parts Management the Black Sheep

May 14, 2019 • FeaturesSpare Parts

For a long time we’ve been focused on getting the right engineer, to the right place, at the right time - but without the right parts getting there as well it all becomes a moot point. It is time we turn our efforts to parts management writes Kris Oldland...

OK, so when it comes to your Field Service Technicians, you’ve reduced their time on the road between jobs, helped them to grow into a role of true trusted advisors and empowered them with access to all the knowledge they could need at the tap of a screen.

In fact, your already exploring how augmented reality could help you bridge the gap between experience and demand as well. Yet, a seemingly perennial problem still haunts you and your KPIs.

A problem that frustrates your customers, your technicians and you as a manager. You know where I’m going here right? The technician is on time, highly knowledgeable and determined to help, but it all falls down when he realizes he isn’t stocked with the part he needs to complete the job.

So the front line of your business, the key brand ambassadors within your company are all too often left sinking in unsatisfactory excuses as disgruntled customers lose faith in your ability to deliver on the service you promised when they signed up.

Suddenly all of that value you’d created through field service management technology investments and extensive training processes is being lost due to insufficient part availability. It’s an all too familiar challenge and one that can seriously damage a companies reputation in the short-term and it’s revenues in the long-term.

But the good news is that resolving these types of customer issues and experiences is perfectly feasible. In fact, technologies exist for this very purpose – service parts management and scheduling solutions interacting together to ensure that when your technician arrives to the right place at the right time, they have the right part to keep your customers happy and encourage repeat business.

Solutions specifically built for the service business, with all of its challenges around low-volume, ‘justin- case,’ intermittent availability, rather than for high volume, predictable, ‘just-in-time’ throughput. Service part inventory networks are complex – a part may go through central warehouses, distribution centers, regional stocking locations and secure local collection boxes along its journey to a technician’s vehicle.

Oftentimes, technicians will end up being over-stocked, causing unnecessary restocking at the warehouse. Standard parts inventory solutions are simply not designed to handle such complexity and in an area that can have such a dramatic impact on the success of your service operation, it is prudent to opt for a solution designed to be fit for purpose. In addition to this, many organizations have followed a trend initially driven by brick-and-mortar retailers, who took the brunt of the shift we’ve made as a society at large towards online shopping, which is to provide spare part stocking locations to bridge the physical gap between technicians and end customers.

In one study, The Service Council identified that over half of all service attempts fail because of not having the right part, and even when the right part is available companies are not maximizing the revenue correctly because they are not pricing correctly due to a fundamental lack of visibility into their inventory across the whole service supply chain.

"Technicians will end up being over-stocked, causing unnecessary restocking at the warehouse..."

 

 

 

But remember, the greater the complexity, the greater the potential for improvements in efficiency. This is particularly true of the highly complex nature of the service part supply chain. Once routing and scheduling have been optimized, further benefits can only come from other processes within the service ecosystem, and service part inventory management, with its potential to reduce costs across multiple echelons within the supply chain, can deliver quick gains. The fundamental question is ‘Why should you accept failure in your service supply chain?’. Or perhaps more crucially, ‘How much longer can you continue to do so?’ 


But remember, the greater the complexity, the greater the potential for improvements in efficiency. This is particularly true of the highly complex nature of the service part supply chain. Once routing and scheduling have been optimized, further benefits can only come from other processes within the service ecosystem, and service part inventory management, with its potential to reduce costs across multiple echelons within the supply chain, can deliver quick gains.

 

The fundamental question is ‘Why should you accept failure in your service supply chain?’. Or perhaps more crucially, ‘How much longer can you continue to do so?’ Oftentimes however, the current systems in place across the after sales service supply chain are not fit for purpose. If this is an accurate description of your own organization, I turn and say that the time for change is upon us all to make this a key area of focus within our sector. There will of course be resistance from those who believe the traditionalist approach works, those who see good enough as acceptable. If it ain’t broke, why fix it, right? But accepting mediocre service standards, is rapidly becoming a fading standard of the previous century.

 

Mediocre in today’s world of increasing customer expectations is, frankly, failure. And of course, failure within business is ultimately intolerable and should not be accepted by neither business leaders or their customers - and increasingly it isn’t. Indeed, there finally seems to have been a quite perceptible shift in the number of companies beginning to pay attention to the importance of good parts and inventory management.

 

Manufacturers around the world are waking up to the fact that the market has changed - from the volatility in the orders of durable goods, to millennials taking over the workforce, to the movement of ‘power by the hour’, there is great opportunity to be had and many organizations have identified that, in the area of parts and inventory management, there is actually a huge amount of low-hanging fruit that can see some big wins, delivered fairly quickly and painlessly.

 

This is changing the way businesses approach the value of parts and indeed service. It is one heck of an exciting time to be in the field service business because all of these economic, social and political changes are driving the attention onto the new era of service-centric business which has emerged across the last decade, as we embrace the emergence of the various new technologies pushing us forwards. 
We are seeing futuristic concepts such as Drones, 3D Printing, Augmented Reality and Autonomous Vehicles enter the wold of field service. And whilst each of these have admittedly been on the horizon for what seems like a very, very long time as we talk of their potential and the promise of industry revolution, the fact is that these technologies are all now beginning to come to some form of maturation.
For while, talk of revolution and rapid change may sell products, conference tickets and dare I say it, even magazines - the truth is that in the world of business at least, real meaningful change always comes across a long period of smaller, incremental iterations. The fact is now that we are approaching the point where various technological, administrative and logistical kinks have been worked through and ironed out in small test cases and viability studies and most of the technologies I’ve listed are sufficiently robust that they are becoming established conversations in the mainstream of our industry.
However, the changes we are seeing in our sector are not just driven by technology alone. Sweeping demographic change within the workforce, accelerated by the aging workforce crisis being faced by companies across the globe and being exacerbated by the unprecedented differences between the incoming Millennial generation and the outgoing Baby Boomers, is of course another factor driving industry evolution forwards.
These changes are leading us into a world where we are making a shift to a much more service and outcome orientated society as a whole - something I would suggest is the result of this generational shift in tandem with the technical advances referenced above and is at the heart of why we are seeing companies turn their entire business models on their head in favor of a more customer-centric, service focused revenue models.
Servitization has gone from fringe concept to buzzword across the last few years as talk of ever decreasing SLAs and increasing First-Time- Fix rates has morphed into discussions around guarantees of uptime and the financial impact of unplanned downtime. At such a point of great industry evolution, it is essential we have our core foundations that we are to build service excellence upon, firmly in place. As an industry we seem to have our heads firmly in place when it comes to the old mantra of the getting the ‘right engineer, to the right place, at the right time.’
But without being able to get the right parts there as well it all becomes something of a moot point. Quite simply if field service organizations are going to be able to embrace the brave new world of servitization and preventative maintenance, then parts management needs to be given the same emphasis as mobile workforce management. Once we have that sorted then in terms of pushing service to the fore of industry, it’s game on.