Supply chain disruptions have been brought to the forefront because of the pandemic and recent geopolitical events. From empty shelves to rising prices, we have felt the downstream impact of these supply chain challenges as consumers. These disruptions have also driven service leaders to scrutinize their supply chains to determine risk. These supply chains are relied on for the delivery of critical parts and spares to meet customer needs, but they also deliver much-needed personal protective equipment to keep service engineers safe. Making sure adequate stock is available for current and future needs has never been so critical.
Our customers, responsible for servicing mission-critical equipment, have been quick to adapt to supply chain challenges. In speaking to them over the previous months, here are a few strategies relied on to ensure the continuity of operations in a time of heightened risk.
1. Look at Technician Inventory
Over the previous decades, organizations have extended their supply chains and increased their reliance on international partners to take advantage of cost savings. While advantageous to a certain degree, this move introduced a level of risk that was exposed during the recent crises. As suppliers shut down for a variety of reasons or were restricted from sending parts across international borders, service organizations began to understand and measure the risk they were exposed to.
Would they have enough parts to meet critical customer needs? How would they continue to support the uptime needs of their most premium customers? While continuing the work with their partners, organizations have turned their focus inwards to locate and identify the actual parts stock held in technician vans, customer locations, and other stocking locations. With improved insight, organizations can support the effective transfer of material from areas of surplus to areas of need. Those organizations with a good understanding of their installed base have found it easier to build forecast models for parts and thereby identify how their current stocking locations needed to be rebalanced.
2. Enhance Local Partnerships and Reverse Logistics
As international boundaries become difficult to cross, especially during the pandemic, organizations scrambled to find local or national partners that they could rely on to source critical parts. In certain instances, organizations looked for partners who were closer in proximity to their critical customers. While this was originally done to meet short-term needs, many organizations have chosen to continue their local partnership plans as part of an overall risk mitigation strategy
Organizations are also pursuing a greater level of discipline when it comes to the management of part returns. It can be common for a technician to order multiple parts for a service work order but only use one to complete the work. Quite often the unused parts gradually make their way back to inventory for broader use.
In the past, this wasn’t as much of an issue and part return processes didn’t receive the scrutiny they needed. That has changed now as it is critical for organizations to have access to all available inventory that can be deployed in a time of need. Along the theme of returns, there is also a greater appetite for the return of used parts and equipment for the purpose of repair, refurbishment, or reuse. This aligns with broader circular and sustainability initiatives in place while also providing an additional pool of parts that can be relied on.
3. Revisit Order Processes with Data
Bringing back or reallocating unused and excess inventory has been vital in ensuring a more adequate supply of service parts. Organizations have also taken a step further to investigate their parts ordering and replenishment processes to understand why this excess exists in the first place. In some scenarios, organizations have tweaked reorder points and quantities to right-size their replenishment cycles. In other instances, replenishment cycles for low volume parts have been halted in lieu of a need-based parts ordering process. These adjustments have been made possible with the aid of improved parts usage and inventory data.
[Related Reading: Integrate Supply Chain and Service Execution to Improve Field Service]
4. Ensure Loaner and Rental Return
With reduced onsite access during the pandemic, several service organizations adopted a more depot-centric mindset where applicable assets were brought back in-house for repair and loaner or rental assets were provided to customers to keep their operations running. During normal business, it is common for a proportion of these loaner assets to go unaccounted for due to improper tracking and poor processes governing their return. In a time of a crisis with quick adjustments to service models and business processes, it is extremely likely that these assets get lost in the shuffle. Ensuring reduced loaner leakage and loss with improved tracking and process control has become a focus area for service organizations.
5. Lean on Technology
As a result of supply chain challenges, there is an increased interest in the prospect of 3D printing or additive manufacturing to support as-needed part fabrication and production. There are various examples of the technology being used during the pandemic to support critical PPE or equipment needs. We haven’t seen a sustained increase in the use of 3D printing as pandemic conditions have eased, but the technology continues to show a great amount of potential.
In the interim, organizations have also relied on other tools to support their supply chain efforts. For instance, technicians are using mobile tools to view local inventory and make technician-to-technician transfers. These tools also allow for a complete record of required parts tied to service resolution. With the aid of this data, organizations have been able to train Artificial Intelligence models to predict which parts would be needed for future events. This focus of AI on triage and dispatch ensures that only the right parts are sent to fix customer issues. As organizations continue to train these tools on their supply chain needs, we will begin to see a significant amount of innovation in this area.
Overcoming Supply Chain Challenges
Service organizations are being pulled in several directions. On one hand, their supply chains continue to be impacted by global events creating uncertainty in their ability to deliver service. On the other hand, these organizations now must support multiple service models such as self-service, remote support, depot repair, and onsite support. Parts fulfilment processes, that were originally set up for onsite service scenarios, now need to be extended to meet all these service delivery modes. If it’s self-service, parts need to be accessible to the customer either onsite or via e-commerce. It is depot repair, then the depots need to be stocked with adequate parts. These counter forces make it even more essential for service organizations to align with their supply chain teams in planning for and executing on customer and business needs.