• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • Login
  • Subscribe
  • Logout
  • My Profile

  • CORONAVIRUS
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • THINK TANK
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » When Service Is the Key to Success

When Service Is the Key to Success

July 1, 2007
Global Logistics & Supply Chain Strategies

Right part, right place, right time: easy to say, tough to achieve. Back in early 2002, Silicon Graphics Inc. (SGI) was looking to replace an outmoded distribution requirements planning system. "We needed to position our materials around the world, to efficiently and effectively utilize that material and not have any excess deployed," recalls logistics materials manager Kipp Hooper.

Born in 1982 as a maker of computer terminals for 3D graphics display, SGI has grown into a producer of high-performance servers and storage systems for a variety of uses. Customers hail from automotive, aerospace, defense, pharmaceuticals, and a wide range of other industries. But SGI's success is tied as much to after-sales service as to the quality of its original hardware. Inventories must be deployed in such a way to address customers' immediate needs, without creating a drag on the company's balance sheet.

A review of several candidates led to the choice of Baxter Planning Systems, based in Austin, Tex., as provider of new software for SGI's service supply chain. The goal, says Hooper, was to meet corporate goals for reducing gross inventory each year, while maintaining high order-fill rates. The vendor's system allowed SGI to set targets for stocking levels, then achieve the best distribution of parts at each location.

The software suite known as Prophet by Baxter gave SGI multiple options for stocking parts-ranging from batteries to full-sized monitors-across its network. In the past, such decisions were driven mostly by requests from engineers in the field. "They love having lots of inventory around," says Hooper. Now, the company had an analytical tool that could take a broader view of the network and make decisions that balanced service and cost.

With Prophet's help, SGI scrutinized its existing service contracts, then set inventory levels to meet the requirements of each. In the process, many parts that had been stocked in the field were returned to the distribution center at headquarters in Sunnyvale, Calif., or placed in hub locations. Over a period of five years, SGI was able to reduce its storage locations from around 200 to the present level of 170.

At first, says Hooper, field engineers were nervous about losing instant access to key parts. Gradually, they became comfortable with the new distribution scheme, which took into account the differing response times built into SGI's various contracts. Same-day agreements required inventory to be kept as close to the customer as possible. Next-day allowed for storage in one of three SGI distribution hubs around the world-Brussels for Europe, the Middle East and Africa; Singapore for Asia-Pacific; and Louisville, Ky., for North and South America-supported by reliable transportation arrangements.

SGI hopes to call on Baxter for additional capabilities. The current system consists of middleware that links new-product introductions and end-of-life programs. Baxter is now developing functionality on the new-product side, which could help SGI to spec out new items and create a "cradle-to-grave" system from a logistics standpoint. Says Hooper: "Those are the things that would make a really great product."

RELATED CONTENT

RELATED VIDEOS

Logistics Global Logistics Inventory Planning/ Optimization High-Tech/Electronics Retail
KEYWORDS Global Logistics High-Tech/Electronics Inventory Planning/ Optimization Logistics Retail
  • Related Articles

    Key to Multichannel Success Is Automation - and the Know-how to Use It

    Service Is Key to Electrolux-Menlo Partnership

    Domino's Pizza: Instant Action Is Key to Omnichannel Success

  • Related Events

    The Big Picture: What It Takes to Make Last-Mile Delivery Work

Global Logistics & Supply Chain Strategies

TNT Logistics Sports New Name: CEVA Logistics

More from this author

Wake up to Coronavirus Updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • Coronavirus-watch-Armada

    Virus Update: Cuomo Seeks to Buy Vaccines Directly; EU to Push for 70% Vaccination by Summer

    Coronavirus
  • U.S. and China Trade

    How China Won Trump’s Trade War and Got Americans to Foot the Bill

    Global Supply Chain Management
  • AT&T

    How the Pandemic Has Altered AT&T’s Global Sourcing Strategy

    Coronavirus
  • U.S. Vaccine Shift Stirs New Unease as 128 Million Join Line

    U.S. Vaccine Shift Stirs New Unease as 128 Million Join Line

    Coronavirus
  • container port

    New Global Visibility App Sees Delays Before They Happen

    Logistics

Digital Edition

Scb home issue 27

2020 Supply Chain Innovator of the Year

VIEW THE LATEST ISSUE

Case Studies

  • LSP Saves Customer $1.5 Million a Year With MPO Global Inbound Management

  • Auto Supplier Wows Key Client Using riskmethods Supply Chain Savvy

  • Integrating Shipping and Compliance Saves Conglomerate Millions

  • How a Consumer Goods Giant Upped Its On-Time Delivery Performance

  • LSP Wows Global Client, Quickly Advances to Become End-to-End Provider

Visit Our Sponsors

6 River Systems ArcBest Armada
aThingz BluJay Burris Logistics
DSC Logistics DCSA (Digital Container Shipping Association) DHL Resilience360
Genpact GEP Honeywell Intelligrated
Infor Logility Magnitude Software
MPO Old Dominion Oliver Wight
OpenSky Ports America Purolator
QAD Precision Red Classic Riskmethods
TGW Systems Transportation Insights Watson Land Company
Westfalia Technologies Workjam Yang Ming
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright © 2016 - 2018 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing