Disconnected Service Parts Networks in a Hyper-Connected World
When a customer calls to ask where their spare part order is, does it take hours to provide a status as you wade through multiple systems for relevant information? Have you ever had a customer notify you of a late order? Do your teams spend more time “fire-fighting” than proactively managing your supply chain? If you deal with the Service Supply Chain, the answer is likely “yes.”
Part one of this two-part blog series explores the pitfalls of having disjointed workflows and technologies, as well as the benefits of integrating them; part two discusses how to consolidate workflow visibility, control, and orchestration across your service network.
Service parts networks must deliver the right parts to your customer and/or technician at the right time, and “the right time” could mean days or hours depending on the customer. In some cases, you could get penalized for not meeting delivery commitments. In all cases, you will face a loss of reputation if you miss the customer commitment (no pressure).
Supply Chain Tech Stack
Companies today are challenged to see what is happening across and within their networks. The lack of visibility into Service Parts Supply Chain networks and the supporting workflows can make it particularly challenging to get straight answers. Information often flows through multiple order management systems (OMS), customer relationship management (CRM) systems, procurement systems, enterprise resource planning (ERP) systems, warehouse management systems (WMS), repair vendor systems, and transportation management systems (TMS), just to name a few. Transactional data is everywhere.
Supply Chain Digital Transformation
As service networks undergo digital transformation, the number of systems and partners to connect will continue to increase. While the goal is to create a hyper-connected ecosystem of supply chain players and technologies, it often results in a complex network that is hard to monitor, control and orchestrate. Connecting transactions across multiple systems to deliver predictive, actionable insights is tough because data often resides in disparate systems across multiple partners.
Simply digitizing supply chain data does not solve the age-old problem of information silos. Businesses and their service partners implement different data systems for individual supply chain management needs without realizing that it only perpetuates data fragmentation across the supply chain. Disparate systems and processes that do not communicate, along with the ubiquity of paper documents like invoices, fail to provide a single source of truth and business intelligence across the network.
Network Blindness with Poor Insights and Costly Consequences
Because the majority of supply chain information in the service network is fragmented, companies often fail to obtain accurate, timely, and complete views of their workflows. The consequence? More reactive problem resolution, sub-optimized inventory levels, higher supply chain costs, and poor customer satisfaction.
According to Information Age, “With numerous moving parts and different partners and suppliers involved, a single shipment will have over 200 interactions with more than 25 people. Yet only 6% of businesses currently have complete visibility into their supply chain, which means for most companies, these interactions are going unmonitored;” making it hard for them to answer questions such as:
Are my customer orders being fulfilled as expected?
A typical parts supply chain experiences key challenges organizationally such as understanding the basics of what’s coming into or out of the facility on a timely basis. Companies struggle to get timely updates regarding the location and condition of in-transit goods, the status of warehouse transactions, or the delivery information both internally and externally.
Who does what to solve what?
As companies onboard more and more partners (third-party warehouses, transportation providers, repair vendors, suppliers, and multiple other partners to run their service network), it becomes extremely difficult to pinpoint who handles a supply chain event or issue. Lastly, there’s a gap in knowledge as to how effective that partner is at handling the events. Most supply chain systems today don’t have a real-time alert mechanism, which inhibits their ability to proactively pinpoint an issue and monitor the success of its resolution.
How much does it cost me to serve without visibility?
Due to lack of visibility, companies can’t move to a more proactive position, and often resort to reactive resolutions like expedited shipping, which can carry a 300% premium, to avoid customer issues or penalties. Since they can’t completely see what’s happening in the network, they usually learn about issues reactively from their customers. This has a negative effect on their brand and revenue. In addition, service technician time isn’t optimized due to broken calls and extended service events waiting for parts.
Connected Service Supply Chains
Supply chains consist of numerous interrelated and interdependent workflows. But while supply chain workflows are connected to one another in principle, the data might not actually be integrated. Every supply chain stakeholder might have their own custom process and workflow management practice, and its effectiveness (or lack thereof) can have a rippling impact across the entire supply chain.
Effective workflow management practices empower every supply chain player to:
- Know what should happen and actively track progress against pre-defined milestones
- Identify workflow delays and take actions before the outcome is negatively impacted
- Decide when to intercede and with what action
- Transform supply chain operations by taking advantage of validation, automation, enhanced decision support, intelligent alerts, and streamlined collaboration capabilities
Ready to take action? Check out part two of this blog series to learn how to consolidate workflow visibility across your entire service network.