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Spare Parts Supply Chain

When you buy any Computer or Electronics Hardware or
equipment, normally one of the questions asked to the sales
MILTON THERMOSTEEL DUO … person is “What is the Service Support” provided by the
company.
(6650)

Rs. 909.00
(details + delivery)
Today the brand image or market demand rides not only
the quality of the product but on the quality of service
support too. Service support is critical in industries like
Computers, Telecom, Aero spares, etc.. In all cases the response time and availability of the spares become critical.
In all cases corporate installations demanding onsite support coupled with critical downtime service level
measurements have pushed the suppliers to set up an e cient spare parts supply chain.

Take the case of an installation of a server in a bank’s central processing division cannot a ord to be down at all. The
company who installs the server is required to ensure that service engineer is available at site during normal hours
and on call basis on 24 × 7 basis. It is not enough to have the engineer attending to or being available at site; the
required spare parts need to be available.

Critical and high value spare parts have to be made available in a nearby warehousing location and logistical
arrangements are required to be made to reach it to the site in a fastest and quickest reach time, which is a few
hours in most of the cases. The site engineer most often can perform diagnostic functions and report back to the
service team. The service support team would then escalate the matters to the technical experts who get involved in
solving the problem. All of the coordination and problem solving along with logistics arrangements is required to
happen in a matter of hours. Such critical performance levels are documented in the service agreements and in most
cases 99% up times are required to be committed by the company supplying the server.

Similar situation exists in aero spares parts supply chain too. Airplanes can develop snags in any location and not
necessarily at the base where they operated from. Therefore, the logistics of having to locate the defective part,
requisitioning the part besides the request being directed to the central spare parts warehouse by the 3PL service
provider and managing to airlift or courier the part in the fastest mode is the normal requirement in this industry.
Most of the parts are high-value parts and cannot be stocked or warehoused in all locations as inventory. Airplanes
cannot be grounded for a long time which would result in heavy losses to the airlines. The down time allotted for
preventive maintenance itself is very less.

Aero spare parts supply chain has also been built around processes to ensure fastest lead times and ready
availability and immediate retrieval of the right component.

In most cases the essential spare parts are kept in stock at the country level based on the number of installations or
volumes of sale under each category of product. In case of non availability the parts are called for on urgent basis
from a regional distribution center normally available at a regional level servicing a continent and own down on
urgent courier mode.

In all cases ensuring minimum downtime is the key factor that drives the spare parts process which involves
logistics service providers, warehouses, customer service teams and technical teams working in tandem to
ensure customer satisfaction.

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Spare
MSGParts Logistics
In a computer spare parts supply chain, usually the network
consists of the country depot that stocks all the parts required to support the eld. The number of parts in such
depots run very high depending upon the volume of sales and can range from 15000 SKUs to 35000 SKUs.
Depending upon the model and vendors. In a country, regional locations are housed in all states or major markets
normally in all major cities. At the regional and local levels, the parts supply warehouse is often combined with test
repair centers where customers can walk in and submit their laptops or products for repair.

Spare parts are delivered out of these outlets in two modes. One is under warranty service where the customer has
bought a warranty contract with the company including free replacement of spare parts. In such situation, the good
part is issued by the warehouse instead of receipt of a defective spare part. The other mode is sale of part where the
customer pays for a spare part and makes the purchase.

Besides the Test Repair Centers, larger markets also have authorized service agents and dealers located all over the
city. The regional warehouse receives orders for parts from these dealers who service the end customers. The orders
can be under warranty free replacement or sale of part. Warehouse accordingly services orders and delivers parts
locally to the dealers and collects the defectives back.

The regional warehouses, in turn, requisition parts from the country depot based on their forecast and stocking
pattern.

In case of parts supply warehouses, commonly they contain two di erent warehousing divisions’ namely good part
and defective parts store.

In case of good spare parts, the warehouses maintain and manage two separate inventory lines as well as separate
processes to manage original spare parts procured from vendors and refurbished spare parts repaired locally
through third party repair vendors.

Against each good part supplied, a defective part is taken back which travels through the various stocking points to
the warehouse’s defective parts store. The defective parts stores issue parts to identi ed vendors for repair and once
repaired issue back the refurbished parts to good store for inventory.

In some cases the defective parts if still under warranty are grouped together and re-exported back to the vendor
overseas for free replacement under warranty.

The entire supply chain network of spare parts involves the Logistics department of the principle company,
inventory planners, test repair center teams and outsourced 3PL warehousing partners who manage to
warehouse and local logistics and designated dealers, authorized service representatives and repair vendors.

The entire supply chain rides on a strong backbone of IT application that manages sales order ful llment on
one end and inventory management at the other end. The applications are robust with enhanced features to be
able to manage and track warranties and also SKU wise stocks and serial nos. Defective parts collection and
management is as important as good part management and carries the same value as it becomes a refurbished good
part once again after repairs.

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MSG Similar Articles Under - Supply Chain Management

 Finished Goods Supply Chain ( nished-goods-supply-chain.htm)

 FG Supply Chain Operations ( nished-goods-supply-chain-operations.htm)
 Spare Parts Supply Chain (spare-parts-supply-chain.htm)
 Reverse Logistics (reverse-logistics.htm)
 Reverse Logistics & SCM (reverse-logistics-scm.htm)

VIEW
(SUPPLY-CHAIN-MANAGEMENT-ARTICLES.HTM) 

 Authorship/Referencing - About the Author(s)

The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content
Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject
Matter Experts. To Know more, click on About Us
(https://managementstudyguide.com/portal/about-us). The use of this material is free for learning
and education purpose. Please reference authorship of content used, including link(s) to
ManagementStudyGuide.com and the content page url.

Search

Supply Chain Management

 Supply Chain Management (supply-chain-management-de nition.htm)

 Information Technology and SCM (it-and-scm.htm)
 Logistics & Supply Chain Management (logistics-and-supply-chain-management.htm)
 Logistics Operations in Supply Chain (logistics-operations-in-supply-chain-network.htm)
 Logistics Service Providers (logistics-service-providers-scm.htm)
 International Logistics (international-logistics.htm)
 Freight Forwarding & Logistics (freight-forwarding-and-logistics.htm)
 3PL Contract Logistics Operations (3pl-logistics.htm)
 Finished Goods Supply Chain ( nished-goods-supply-chain.htm)
 FG Supply Chain Operations ( nished-goods-supply-chain-operations.htm)
 Spare Parts Supply Chain (spare-parts-supply-chain.htm)
 Spare Parts Logistics (spare-parts-logistics.htm)
 Reverse Logistics (reverse-logistics.htm)
 Reverse Logistics & SCM (reverse-logistics-scm.htm)

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