Just about any glitch in the complex service parts supply chain can be costly to shippers, Reichert says. The industry, he adds, faces three major challenges in that area.

The first is the wide dispersion of inventory across the supply chain. Parts might reside anywhere from a central distribution center to remote depots and even the service van. Much of that inventory is poorly tracked, especially at the technician level. "At the end of the day," Reichert says, the technician comes back to the depot and stocks it himself, or relies on someone to do it." Rarely are parts at that level tied to an automated replenishment system.

The second challenge relates to the emergency nature of system downtime. The failure of a single piece of equipment at a construction site can shut down the entire operation. "Having the right part on the truck, or being able to access it, is very critical to getting it back up and running," says Reichert. A similar sense of urgency exists in the healthcare sector, where the failure of expensive equipment can lead to costly downtime.

The third major area of concern is the utilities sector, characterized by a vast web of power grids, substations and power plants. A failure anywhere along the line can create "a P.R. nightmare," Reichert notes.

Retailers, too, face serious issues arising from a failure in the supply chain, but the situation is more dire in areas such as construction, where certain machines might no longer be manufactured and there are few options for customers. "If a retail item is not on the shelf," says Reichert, "I don't go home worrying about how much revenue I lost. I go to another store, or possibly not buy [the item]." In more critical operations, an emergency order for a replacement part often must be fulfilled within a matter of minutes.

Visibility throughout the supply chain, with the help of modern information technology, is key, Reichert says. "If I don't have the systems that let me act on that information, I can't address the problem. Technology allows me not only to see problem, but quickly react to it."

To view video in its entirety, click here


Keywords: supply chain, supply chain management, service parts supply chain, supply chain risk management, inventory management, inventory control, logistics management, warehouse management, supply chain planning, supply chain visibility