• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • 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 (Big Data/IoT/Blockchain)
    • 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
    • Supply Chains in Crisis
    • 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
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Service Parts Management - Beyond Planning, Success Through Market Execution

Service Parts Management - Beyond Planning, Success Through Market Execution

July 1, 2006
Stephen Buckler, VP of Business Development, Horizon Technology

Today's macroeconomic environment of globalization, outsourcing and consumer market visibility has resulted in the commoditization of products and erosions of margins. This has put pressure on manufacturers to not only drive efficiencies from their supply chain through outsourcing of non-core competencies, but to distinguish their products through superior levels of customer service. After-market service has not only proven to be a critical component of customer satisfaction but is a key component of top line revenue and profit. According to the Aberdeen Group, after-market service generally accounts for up to 20% to 30% of gross revenue and 40% of profits. To realize these gains manufacturers must have end-to-end supply chain solutions that encompass planning and execution with equal weight. The selection of strategic partners throughout the supply chain is critical to the success of any service parts management program.

The challenge of maintaining a seamless supply chain in the technology sector that preserves customer satisfaction where product quickly falls into obsolescence is critical to maintaining a company's reputation and brand loyalty. Challenges identified by manufacturers are many. Lack of visibility into inventory levels and demand, resulting in stock-outs, excess inventory, and poor response time to customers, have proven to be critical pain points. Manufacturers quickly realized that their existing systems and planning software, geared towards production runs, were ineffective in managing their service parts programs. This in combination with relentless pricing pressure and revenue demands has resulted in OEMs parceling out processes that are not core competencies to strategic partners that are better suited to drive efficiencies from their after-market service programs.

Use of strategic partners within the electronics industry, such as third party logistic providers (3PLs) or electronic manufacturer service (EMS) providers, has helped original equipment manufacturers (OEMs) improve service levels of after-market services (AMS). The purchasing function of execution within the electronics industry takes three forms; direct from manufacturers, franchised distribution, and independent distribution to support repair demand. However, many AMS programs fail to realize the full potential of their supply chain by failing to apply the same due diligence when selecting an open market supplier. To realize the gains of effective planning one requires best in class execution throughout the supply chain. Selection of best in class distributors that understand the AMS business model, possess the tools, requisite quality systems and strategic relationships that drive out inefficiencies and mitigate risk within the supply chain is critical in driving superior revenues and customer satisfaction levels.

In selecting a supplier as a strategic partner, it is critical that they possess the required insight into the AMS provider's business model with the proper focus on items that will drive the greatest value into the supply chain. By narrowing down the list of service parts to the highest cost and highest failure rate components, the best service parts supplier is able to focus its services and business model on supporting the line items that cause AMS programs the most difficulty. Horizon Technology has identified storage and display as two of the highest cost and highest failure rate items impacting the AMS supply chain for computing and technology applications. It is important that the selected distributor structures its business model and services to best support those line items that give the AMS the greatest value in terms of market intelligence, cost reduction, quick response times, and re-distribution of excess inventory.

Identifying independent distributors that have the necessary tools that give the AMS supply chain visibility into the global market will prove critical in supply chain execution. Horizon Technology's Proactive PartMatch is an example of such a tool. It allows customers to create pre-established preferences of price, quantity, and both internal and manufacturer's part numbers. Horizon then monitors global supply and demand on a real time basis through its Global Supply and Demand (GSD) data base. GSD leverages the liquidity of the global market by aggregating LCD and storage supply and demand from over 11,000 suppliers and customers. The system will match past, present and future product supply against customer defined metrics. When a match occurs the Horizon account manager is electronically alerted and immediately notifies the customer. Tools that give AMS providers the ability to monitor global supply and demand on a real time basis give greater visibility and control in supply, allowing AMS providers to make critical adjustments to their supply chain, resulting in reduced stock outs, improved response times and a reduction in excess inventory.

In addition to analytical tools and global sourcing capabilities, the supplier should have relationships with component manufactures to fulfill end-of-life part number demand. For storage products this means being an authorized distributor of factory re-certified hard drives. In Horizon's case, this is Seagate and Western Digital. One of the major markets for factory re-certified hard drives is fulfillment of repair demand for Enterprise, Desktop, Mobile Computing, and Consumer Electronics applications.

The last requirement of a best in class distributor is mature quality systems that are ISO 9001:2000 certified. As well as a global logistics footprint and the resources to fulfill value added programs required in AMS fulfillment such as testing, repair and firmware updates, ensure that your suppliers track critical metrics on a real time basis, offering full documentation of their quality procedures. A few examples of metrics to look for include Customer Satisfaction, On-Time Delivery, Supplier Performance, In-Bound Non-Conformance and Sourcing Fill Rates.

Today's business environment requires a robust supply chain with flawless end-to-end execution that contributes to net revenue while delivering a superior customer experience. Selecting best in class suppliers with the requisite database management tools, strategic relationships, quality programs encompassing test and repair, global footprint and logistics capabilities will allow AMS providers to realize the full benefit of their supply chain.


Stephen Buckler
VP of Business Development



Horizon Technology is an unconventional distributor specializing in information storage and display products for the OEM, EMS, and ODM markets. Founded in 1996, Horizon's ISO 9001:2000 certified worldwide headquarters are located in Lake Forest, California with sales, purchasing and logistics support provided through offices in Boston, Oklahoma City, Taipei, and Seoul. Horizon is changing distribution by leveraging the liquidity of the global market by aggregating global supply and demand on a real time basis.

Horizon Technology
1 Rancho Technology
Lake Forest, CA 92630
T 949.595.8244
F 949.595.8248
www.horizontechnology.com

RELATED CONTENT

RELATED VIDEOS

Logistics Global Logistics Logistics Outsourcing Service Parts Management Sourcing/Procurement/SRM Supply Chain Finance & Revenue Management Supply Chain Visibility Technology Global Supply Chain Management High-Tech/Electronics
KEYWORDS Global Logistics Global Supply Chain Management High-Tech/Electronics Logistics Logistics Outsourcing SC Finance & Revenue Management Service Parts Management Sourcing/Procurement/SCM Supply Chain Visibility Technology
Stephen Buckler, VP of Business Development, Horizon Technology

More from this author

Subscribe to our Daily Newsletter!

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • karen-jones.jpg

    Watch: Four Industry Disrupters Impacting Logistics

    Data Management (Big Data/IoT/Blockchain)
  • THE SPACE AROUND A COMPUTER KEYBOARD IS CLUSTERED WITH IMAGES GENERIC SHIPPING BOXES

    How Suppliers Can Overcome E-Commerce Supply Chain Challenges

    Data Management (Big Data/IoT/Blockchain)
  • A CSX TRAIN IS SEEN FROM THE FRONT

    CSX’s New CEO Has a Big Idea for Railroads: Carry More Freight

    Rail & Intermodal
  • A SEATED PERSON HOLDS A SMARTPHONE, SHOPPING

    Retail Consumer Data: The Key to Personalization, or Privacy Violation?

    Regulation & Compliance
  • TWO MEN IN SUITS ENGAGE IN CONVERSATION ACROSS A COFFEE TABLE HOLDING AN OPEN LAPTOPIN AN OFFICE

    For Shippers, Disruption Means Opportunity to Rethink Carrier Strategy

    LTL/Truckload Services

Digital Edition

Scb q1 2023 cover

2023 Supply Chain Management Resource Guide: Packing for a Difficult Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Holman Logistics Honeywell Intelligrated
IFM Infor Inmar
Keelvar Kinaxis Korber
Lean Solutions Group 2H Liberty SBF Locus Robotics
Logility LogistiVIEW Lucas Systems
MCA Connect MPO Nvidia
Old Dominion OpenText ORTEC
Overhaul Parsyl PMMI
QIMA Redwood Logistics Ryder E-commerce by Whiplash
Saddle Creek Logistics Schneider Dedicated Setlog Holding AG
Ship4WD Shipwell Shyft
Sourcemap Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming 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 ©2023 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