Matching the right part and the right technician with the right job: Service organizations still emerging from antiquated business models are finally streamlining this operational discipline, moving away from massive central parts warehouses and shifting into predictive analysis, advance scheduling, and other new tech innovations that are reinventing how to manage parts and logistics.
We caught up with John Ragsdale, VP of technology research at the Technology Services Industry Association (TSIA), to discuss three big trends that are reshaping how service managers manage parts — from community-based depots to redesigned products that customers can fix themselves.
Balancing Cost and Responsiveness
Field service departments are increasingly viewed as sources of profit, but that doesn’t mean service organizations are immune from cost-cutting measures. In order to cut costs, companies are cutting warehouses. The central hubs are traditionally stocked with inventory for an entire year. These facilities can cost millions of dollars to stock and maintain, and the cost and manpower required to handle inventory can be crippling.
This is a balancing game between saving money on inventory costs and getting customers the parts they need. Organizations want to be more specific about the amount of inventory needed to support customer demand without letting levels dwindle to the point that negatively affects the customer experience. It’s a tradeoff that’s changing the perception that people used to have about maintaining inventory levels, Ragsdale says.
With predictive analysis, organizations can uncover specific customer needs by area, and stock local warehouses accordingly. By analyzing several features including common products in each area, the age of the products, and data about which parts frequently fail, service organizations can ensure that the proper parts are stocked locally. “I think attention will shift from massive parts warehouses to small community-based, zip code analysis,” Ragsdale predicts.
Parts On Demand
Sophisticated scheduling software allows service organizations to increase supplies on the trucks themselves — essentially turning them rolling warehouses. Managers can schedule technicians based on which parts are stocked on which truck. This is just one example of how service is becoming more personal and cost-effective.
First-time fix rates and time-on-site (important metrics for service managers who focus on utilization rates) are tied to technicians having the correct part on their truck. Advanced scheduling and localized parts logistics allow managers to cut inventory costs and focus on using their technicians more wisely. It’s a big shift that wasn’t possible in the past before real-time analytics were widely available.
What if customers could replace faulty products themselves? Ragsdale says that companies are realizing they must rethink how they design products in order to make certain parts accessible to customers. With remote monitoring and a web cam, for example, technicians could view equipment problems and walk customers through the installation. And, though nascent and prohibitively expensive for most organizations, 3-D printing would allow customers to conceivably produce the parts themselves.
The potential benefits are huge — for customers and service organizations alike. Customers could create replacement parts onsite without waiting for a technician to arrive with the part, and service organizations could eliminate the substantial cost associated with stocking, maintaining and storing parts. Ragsdale cautions that such a change will require a radical shift.
“It’s challenging how we think about every single step of the customer lifecycle,” Ragsdale sys. “There has to be some balance between ease of product development and ways for customers to better interact with products. It’s a whole paradigm that will have to shift.”