High Velocity, High-Tech Service Parts Logistics: Inventory Management

It is essential to determine the root cause of any discrepancies and make necessary adjustments to processes accordingly. There must be a willingness to collaborate between the 3PL and client for ongoing improvement. Technology organizations should be open for critique, and 3PLs should be expected to provide objective information for the benefit of both parties.

Inventory Control

When managing high-tech service parts, careful consideration of storage duration is needed. Most parts are under warranty, requiring close attention to the amount of time they are on the shelf to avoid expiration before an order is executed.

To prevent this, a first part in, first part out (FIFO) approach is recommended. This means the part that has been on the shelf the longest should be the first to be distributed. This strategy keeps parts within warranty and helps avoid additional expense for repairs.

If there are only a limited number of service parts to manage, the FIFO process can potentially be handled manually. However, large volumes of parts require an automated process. Using a dedicated serial number control method for each device allows them to be tracked from initial storage to final distribution, which streamlines operations. Serialization can either be implemented by a client or 3PL. Regardless, it offers a tangible benefit to inventory control that is well worth the time and investment.

Mission-critical service parts logistics is based on the same sound principles of any effective supply chain network. The unique difference lies in the speed in which processes must occur. Any miscalculations or missteps will contribute to delays in repairs that can cost untold millions of dollars in a small fraction of time.

As with air traffic control, where there is also little margin for error, effective mission-critical service parts logistics requires precise management and complete visibility. Without these components, companies and their customers can suffer extended downtime and even serious penalties.

Doug Magnan is vice president of logistics operations for Choice Logistics, an outsourced service parts logistics provider for missioncritical, high-tech service organizations.