Excess Inventory – Many planners that are working on spreadsheets deal with what they refer to as “trapped” inventory left out in the field. The more field stocking locations an organization has, the greater chance they have for inventory to be shipped to a stocking location and it sit there and collect dust. For example, at one point in time your planner decided you needed a quantity of 10 of Part X in the Austin Forward Stocking Location (FSL). The part cost for Part X is $20,000 each; over three years you only used two of them. The other eight sat there and could have been used at a different FSL, but spreadsheets didn’t give you visibility to rebalance them. Now that part is obsolete, and you are throwing away $160,000 +shipping cost. Trapped inventory can be an even bigger issue if a planner has been urged to order more than needed to get a bulk discount. Having software to show this bulk order is unnecessary.
Train, Planes, and automobiles – Customers, products, parts, service contracts, warehouses, logistics companies… so many competing processes and data; and key decisions to be made every day. In a spreadsheet environment, it is impossible to incorporate all the necessary data needed to create accurate target stock levels per part, per stocking location. What ends up happening? The planning team, or better yet logistics team, updates target stock levels once a year, maybe once a quarter using simple demand history data. In that one-year or one-quarter, new installed base is sold into the field, increasing probabilities of future failures. Since the target stock level process is lagging and not very accurate, it causes the need for trains, planes, and automobiles to expedite service material from the wrong place to the right place. Extreme costs are incurred every year on what we refer to as expedited shipping costs (seriously, millions of dollars)
Digital Transformation for Spare Parts Planning.
There’s a better way than spreadsheets. Adoption of a new planning solution will involve change management, but it is a MUST if your organization is serious about capturing current and future service revenue! Baxter Planning focuses solely on the Service Supply Chain and we have a wealth of experts ready to help you.