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In an age of servitization and advanced services, spare parts management has become something of a difficult beast to fully grasp for many companies who are offer aftermarket services.

For example, in a world of guaranteed up-times, the cost of failure to keep an asset running can often far outweigh the lost revenue from the sale of the replacement part needed to get the asset back up and running and fully functional again.

Yet, the path to servitization is not an easy one to tread - so is it worth cannibalising what for many service companies is a reliable, consistent and strong revenue stream in its pursuit?

Whichever route companies ultimately turn to, one thing is certain, spare parts management is going to be a crucial aspect within the service delivery sector and as with mobile workforce management, there are a number of technologies and innovations that are emerging that could change the way we approach parts management in the future.

Therefore it was with great interest that we took a look at the insights from a recent research project undertaken by Copperberg. The research was conducted online across the last month primarily to Copperberg’s own audience of conference delegates.

In total the there were 65 responses to the survey and these representatives were all professionals within the sector ranging in seniority from parts managers through to Managing Directors - although the main body of respondents were at the division head/director level on a national scale.

The majority of respondents were from Europe although other regions, including China, were represented. The respondents were largely from manufacturing verticals, which would be anticipated given Copperberg’s flagship event the Aftermarket Business Platform is also a manufacturing dominated event. However, there were a number verticals within the manufacturing sector represented including heavy machinery, medical and automotive.

So let us take a brief look at what trends the research revealed...

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Want to know more? Click here to Visit Copperberg's website to register for an exclusive white paper based on this research!

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Inventory Management:

Inventory Management sits at the heart of good parts management as without the ability to track components and parts at any given time as they move from depot to the field (and potentially back again depending on a companies approach to repair and reverse logistics) everything else within in the equation becomes open to inaccuracies and subject to guesswork.

Indeed, the importance of inventory management appears to be hugely important within the organisations represented within Copperberg’s research with 91% of the respondents ranking it as being either four, five or six on a scale on to six with six being very important. In fact, almost half of the respondents (43%) listed Inventory Management as very important (6) - further emphasising the significance of inventory management in the context of spare parts management.

So it is absolutely shown to be clear in the research that the focus on inventory management remains one of utmost importance for the vast majority of companies.

 

Parts Pricing and eCommerce:

Parts pricing is also another area that was unanimously outlined as being important to the survey respondents.

This is particularly interesting as the fact that so many companies still view parts pricing as being highly important to them could be viewed as an indicator that the revenue streams that come from spare parts sales is still very much a critical part of the aftermarket landscape.

In fact, 86% of respondents stated that they felt parts pricing was at least a four on the same scale as listed above, however, here it was just under a third of respondents (32%) that felt this issue was very important.

eCommerce is of course another area that is heavily linked with parts pricing and there are indeed some correlations between the two areas, yet in terms of responses, eCommerce remains somewhat less of a priority than pricing.

With regards to eCommerce, exactly two-thirds of the respondents (66%) listed it as a four, five or six with only 16% seeing it as being very important (6).

This is quite an interesting difference between the two as we might have anticipated these results being more closely aligned.

One assumption, however, may be that with regards to eCommerce the solutions have now matured and so most manufacturers in 2018 may have at least some form of eCommerce solution in place - perhaps this explains why it is viewed as less of a priority?

This is certainly though an area for further discussion - something that will be surely had at the Copperberg Spare Parts Business Platforms which are running in Q1 next year.

 

Digitalisation:

Digitalisation is the key buzzword of the last few years although given that it encompasses a number of important shifts within the current evolution of business processes this is perhaps to be expected and there is no denying the importance of digitalisation within the field service sector and it is also a major consideration within the closely related function of parts management as the research reveals.

Digitalisation was ranked was 71% of the respondents to the Copperberg survey as being listed as either a four, five or six on their scale of importance, with 22% of respondents listing it as a six i.e. very important.

This places digitalisation as being deemed to be not quite as important to the respondent base as Inventory Management and Parts Pricing but more important than eCommerce.

What is interesting to note here is that these two very specific niche challenges seem to be in some-ways the eternal, perennial headaches of the sector, whilst broader, business-wide concerns such as digitalisation are possibly more likely to appear as an issue to overcome in the short-term which in themselves could lead to improvements in other areas - such as improved inventory management for example.

Which leads us neatly into...

 

3D Printing & Artificial Intelligence:

Two perfect examples of exciting new technologies that are emerging would be 3D Printing and Artificial Intelligence (AI) - with one set to play a hugely significant role in the niche of spare parts management, whilst the other will play a broad role in almost all sectors, including spare parts management.

So how do the industry experts who made up the Copperberg respondent base see each of these exciting technologies impacting the spare parts management sector?

With regards to AI just over a third of respondents (35% ) thought it would be important to some degree (again listing it as either a four, five or six).

However, less than a tenth of the respondents (9%) felt that AI was currently very important for them.

In terms of 3D printing, surprisingly the numbers were even lower.

In fact, less than a third of companies listed 3D Printing at a four or higher and only 8% of respondents felt that 3D Printing was very important in the sector currently.

 

Parts Logistics:

One area, however, that was overwhelmingly listed as being important within the field of spare parts management across the next 12 months was that of parts logistics.

94% of respondents listed parts logistics as being at least a four in the scale of importance with over a third (35%) going on to state that they felt parts logistics was important enough to warrant being listed as a six.

This makes parts logistics one of the most important areas in the spare parts sector across the next twelve months according to this respondent base, although Inventory Management is very important to more companies.

 

Conclusions:

The results of the survey bring us some interesting conclusions - particularly when we stand them alongside the trends we are seeing from within the field service sector.

Of course, field service and parts management are two leaves on the same branch with deeply symbiotic relationships between the two.

Yet, from this research at least, it does seem that many of the forward-looking discussions we have been having within the field service sector, particularly around emerging technologies such as AI, IoT and Augmented Reality as well as the wider topic of servitization as a strategy for business growth - may be further down the line than their equivalent discussions with our spare parts colleagues - and in some companies that may be significantly so.

Perhaps, part of the reason for this is that parts management is a highly complex beast with a huge amount of moving parts (literally) and even if solutions such as inventory management systems have been put in place it may take time for the benefits there to be truly felt.

However, the simple fact is that no matter how efficient field service management is - it all falls out of the window if parts management is poor - and this is perhaps the greatest learning from the research - that the focus of professionals within the parts management sector currently remains on efficiencies - and for that, we in field service should be hugely grateful.

 

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Want to know more? Click here to Visit Copperberg's website to register for an exclusive white paper based on this research!

 

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The potential to enhance field service efficiencies through technologies like IoT, Augmented Reality and Artificial Intelligence are out of this world. But to fully realise the benefits they can bring field service companies need to have a foundational framework of technology already in place.

Here we look at five key systems every field service company should focus on before they look to take another giant leap forwards...

Field Service Management technology has become essential to service delivery excellence and in a world of connectivity and ever-increasing customer expectations, service excellence is no longer a USP but a baseline requirement.

Indeed, the rapid evolution of technology and its impact on field service in recent years has led to an increasing integration between process and technology when it comes to field service management.

However, whilst technologies such as IoT and Augmented Reality are grabbing the headlines and can undoubtedly enhance service delivery, their potential is greatly diminished unless you have a fundamental layer of technology in place already. In this article, we will explore five core, fundamental elements that should be at the base of your field service management solution.

 

Contract Management:

Contract management is often viewed as the starting point of almost everything within field service management operations.

Without a view of your service contracts, you cannot have to hand the answers for critical questions such as:

• What is the SLA on any given contract?
• Is a client under warranty or do they have an enhanced level of service contract?
• Does a contract include spare parts and/or consumables?
• Is the service contract due for renewal?

You could be at risk of potentially not meeting your clients' expectations and so putting the potential of renewing or upselling service to that client in danger in the future – or on the other side of the coin, you could be giving valuable service away for free.

Therefore, Contract Management is perhaps the most important of the fundamental building blocks that you should expect to find within a modern field service management solution and perhaps the first area that you should make sure your team is fully versed in utilising.

 

Scheduling:

Scheduling comes in a number of different guises and the various different names given to types of scheduling options can be a somewhat confusing but broadly scheduling will come in three flavours:

• Assisted Scheduling
• Optimised Scheduling
• Dynamic Scheduling

So which is right for your business?

It is often assumed that a dynamic solution is required for a larger mobile workforce, but whilst the size of your workforce is certainly one consideration in which type of scheduling engine would best suit your service operation - this is not the only factor.

The complexity of the service work, as well as the variety of service jobs you undertake, is another significant factor.

For example, an organisation that has a field workforce that services multiple different asset types – perhaps from multiple OEMs, and therefore has a number of different engineer requirements for differing jobs - would likely benefit far more from an optimised scheduling engine than an organisation that just fixes one or two types of assets for which all of their engineers are qualified to undertake repairs and maintenance.

This remains true whether you have 20 or 200 field service engineers.

Similarly, if a large proportion of your field service efforts are focused on planned maintenance calls which have a level of flexibility in terms of getting an engineer on site, then you may not have a need for a dynamic scheduling engine whilst an organisation that is far more reactive, that has a firefighting approach to their service delivery and strict SLAs would benefit hugely from a dynamic scheduling system.

 

Mobile tools and communications:

It is fair to say that the biggest revolution in field service has come from the rapid explosion in mobile computing power.

Today’s smartphones are capable of greater computing tasks than even the laptops of just a few years back.

For the field service organisation, this is fantastic as it puts information at the field service engineers finger tips, empowers them to spend more time on maintenance and repair and less on activities such as paperwork and enables them to deliver a far more effective and impressive service experience for the customer.

 

"Engineer to engineer communications are seamless in today’s world, whether it be using dedicated built-for-purpose business tools or even free to use consumer solutions such as WhatsApp or Skype.."

 

Also, with the advent of smart phones, and then latterly tablets, has come greater communications tools than we could have ever expected ten years ago.

For example, engineer to engineer communications are seamless in today’s world, whether it be using dedicated built-for-purpose business tools or even free to use consumer solutions such as WhatsApp or Skype.

From a FSM solution standpoint again whilst a mobile app was a USP, an add on or even a separate solution entirely just a few short years ago, now almost all FSM solutions will come with some mobile offering included. However, whilst the mobile element in FSM technology is constantly evolving, essentially the most fundamental and core aspect that you want a mobile aspect of a FSM solution to do is to mirror your back-end solution and to do so in real-time.

 

Parts & Inventory Management:

Parts and Inventory management is perhaps an area that in the past has not received the focus and attention that it requires.

It has often been the mantra of field service organisations that they are aiming to get the right engineer to the right job, at the right time.

But that all becomes moot if the right engineer doesn’t have the right parts to hand as well.

Consistently at industry conferences, parts management remains a hot button and a common pain point for a huge amount of organisations.

So whilst it is exciting to talk about emerging technologies such as IoT and Augmented Reality - a primary focus should be on ensuring our field service operation is as efficient as possible at a fundamental level, and that means getting a grip on parts management.

And whilst of course there are supply chain and logistics aspects to the conversation which can make things complicated – especially when you are using third-party contractors – one of the most crucial aspects of good parts and inventory management is utilising a system that can keep track of where your inventory, including van inventory, is at any given point.

One area where many companies get themselves caught out is by thinking that they can use a system such as a financial system that is designed at best for companies whose stock resides in static places such as warehouses and stores.

However, field service is far more dynamic than that, with parts moving back and forth and in and out of locations constantly each and every day.

 

Integration:

Finally, just a brief note on integration.

We are living in a world of data lakes, data rivers, data mountains and all other types of data topography it seems!

But all these vast swathes of data are meaningless unless you are able to draw insight from it, and quite often that means being able to let the data flow seamlessly from one set of business applications to another.

This is why integration is absolutely key in any modern business system – including FSM.

[quote float="right"]Integration is absolutely key in any modern business system – including FSM.[/quote]Of course, our vision of the future is that everything will be plug and play and all technologies will play well together nicely, but we aren’t quite there yet.

Integration varies from provider to provider but often it is led by the integrations they have been asked to undertake, so if your current provider or a provider you have identified as being a good fit for your business don’t advertise integration with a specific system you are using – it is worth discussing the possibilities with them - especially if it is a common platform as making their product integrate may be useful for other future clients also.

Whilst there are still some legacy systems that can prove very difficult to integrate with this is becoming less and less so in today’s day and age. Indeed, we are seeing more and more companies offering ‘off the shelf’ or ‘out of the box’ integration with the leading CRM, ERP and even Telematics solutions.

Finally, it is worth discussing with your providers how they are future proofing their products when it comes to integration – there is, for example, a large amount of proprietary technology centred around IoT at the moment and until accepted universal protocols are in place you want to make sure any investment you make is future-proof.

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In the first part of this feature, Tesseract’s Kevin McNally explored the importance of contract management and workforce scheduling within a field service management system. Now in the concluding part of this feature he looks at three other key elements of a modern FSM system...

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Want to know more? A white paper on this topic is available for Field Service News subscribers only - but if you are a Field Service Professional you may well qualify for a complimentary industry practitioner subscription!

Click here to apply for your subscription now and we’ll send you the white paper to your inbox now instantly as a thank you for your time!
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Mobile tools and communications: 

It is fair to say that the biggest revolution in field service has come from the rapid explosion in mobile computing power. Today’s smartphones are capable of greater computing tasks than even the laptops of just a few years back.

For the field service organisation this is fantastic as it puts information at the field service engineers finger tips, empowers them to spend far more time on maintenance and repair and far less on activities such as paper work and enables them to deliver a far more effective and impressive service experience for the customer.

[quote float="left"]The real key to a FSM solution is the ability to keep a number of differing business units all on the same page at once, [/quote]The real key to a FSM solution is the ability to keep a number of differing business units all on the same page at once, and the mobile aspect is the key to ensuring the field service engineers – perhaps the most vital cog in the service operation wheel, are kept up to date (and are keeping their colleagues updated about their own progress) whilst working remotely.

For the field service engineer, his FSM app is perhaps now the most important tool in his belt, but if it is cumbersome to use its benefits may well be underused and much of its true value lost. Therefore, for those seeking a new FSM solution the mobile app is a key area for scrutiny. If you are already working with an FSM system it is worth considering getting some feedback on this aspect of the mobile app from your engineers and taking this back to your FSM provider – a good systems partner will always value such feedback and often if there are areas where you feel the solution can be improved, these will likely be felt by other companies using the same solution, so such changes may well surface in the not too distant future in a new update.

Parts & Inventory Management: 

[quote]Part’s Management is a real fundamental piece of the puzzle that is overlooked by many companies – Kevin McNally, Tesseract[/quote]  

Parts and Inventory management is perhaps an area that in the past has not received the focus and attention that it requires. It has often been the mantra of field service organisations that they are aiming to the get the right engineer to the right job, at the right time. But that all becomes moot if the right engineer doesn’t have the right parts to hand as well. Consistently at industry conferences parts management remains a hot button and a common pain point.

One area where many companies get themselves caught out is by thinking that they can use a system such as a financial system that is designed at best for companies whose stock resides in static places such as warehouses and stores.

However, field service is far more dynamic than that, with parts moving back and forth and in and out of locations constantly each and every day.

In no time at all a company that isn’t using a system designed with field service in mind will soon find themselves having to find workarounds to make their system work, which ultimately will mean a far less accurate understanding of stock levels, which can only ever lead to unnecessary spending and a negative impact on the bottom line.

But there are other less obvious impacts poor stock management can have as well.

[quote float="right"]Field service is far more dynamic than that, with parts moving back and forth and in and out of locations constantly each and every day.[/quote]For instance, in such a set up stock realistically can usually only be written off once it has been invoiced. However, in the dynamic world of field service that is of course too late. It could be quite conceivable that an engineer visit could be scheduled with a customer based on a specific part being in stock but in fact whilst there is one of those parts remaining in the inventory, the reality could be that it has already been fitted but just not written off yet as the job hasn’t been invoiced.

For example, lets say an engineer who is onsite is unable to complete a first time fix, but is able to identify a faulty component and then order it whilst still with the customer - giving them a confirmed date for a second appointment when the needed maintenance can be undertaken.

This is a far more powerful and commanding response compared to the negative situation we often find ourselves in where an engineer cannot find the right part – and he just heads off to his next job, leaving the first customer to wait for an unconfirmed rescheduled appointment whilst they try to track down the right part.

In one example we see an engineer empowered by his technology, the other he is hampered by the lack of it.

Integration: 

We are living in a world of data lakes, data rivers, data mountains and all other types of data topography it seems! But all these vast swathes of data are meaningless unless you are able to draw insight from it, and quite often that means being able to let the data flow seamlessly from one set of business applications to another

[quote float="left"]We are seeing more and more companies offering ‘off the shelf’ or ‘out of the box’ integration with the leading CRM, ERP and even Telematics solutions.[/quote] Integration varies from provider to provider but often it is led by the integrations they have been asked to undertake, so if your current provider or a provider you have identified as being a good fit for your business don’t advertise integration with a specific system you are using – it is worth discussing the possibilities with them especially if it is a common platform so making their product work with it may be useful for other future clients also.

We are seeing more and more companies offering ‘off the shelf’ or ‘out of the box’ integration with the leading CRM, ERP and even Telematics solutions.

It is worth discussing with your providers how they are future proofing their products when it comes to integration – there is for example a large amount of proprietary technology centred around IoT at the moment and until accepted universal protocols are in place you want to make sure any technology you have invested in today is going to be of use tomorrow.

Tesseract is the leading service management software provider in Europe and have been in the Field Service Business for over 30 years.   For further information contact Tesseract on 01494 465066 or www.tesseract.co.uk
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Want to know more? A white paper on this topic is available for Field Service News subscribers only - but if you are a Field Service Professional you may well qualify for a complimentary industry practitioner subscription!

Click here to apply for your subscription now and we’ll send you the white paper to your inbox now instantly as a thank you for your time!
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Kieran Notter, Director, Global Customer Transformation, ServiceMax from GE Digital, takes a fresh look at some perennial problems...

Field service management hit the headlines in 2016 as automation, the Internet of Things and servitization reshaped the way we service and maintain capital assets.

These trends have now trickled down to the supply chain, providing a fresh approach to age old headaches. In this article, we look at five areas of friction in the supply chain and how combining field service management with assets is solving them.

The Inventory Tug of War

CFOs will always push for lower inventory levels to free up cash flow and reduce the risk of obsolescence. Yet Service Directors want higher inventory to increase First-Time Fix rates, reduce internal costs, improve productivity and raise customer satisfaction.

The supply chain is between a rock and a hard place trying to balance between two opposing arguments. So what’s the solution? In a word, knowledge.

Knowing the assets and installed base – from the basic location knowledge all the way to IoT (smart connected products) – gives the supply chain a much better chance to meet the demands of both sides. It caters for greater availability but with less inventory, thus freeing up cash. By using the data that’s attached to the asset, it’s location, it’s preventative maintenance plan, and its productivity provides an alert when a part is about to break.

 

Expensive, Unplanned Freight Costs

Knowing the frequency of parts that fail, and the correct intervals for preventative maintenance visits reduces freight costs with fewer ‘emergency’ shipments. However, the biggest saving here is actually in reducing the parcel count itself. If you know what parts you are going to need and when, you can consolidate shipments, sending them direct to the technician in advance.

At a basic level, just knowing where your assets are means you can position the inventory in more strategic locations to reduce costs and increase availability.

Product Lifecycle – The Delayed Curve

A supply chain is expected to cover the assets through their lifecycle. However, if you cannot see if the install base is growing or shrinking, you can’t align inventory accordingly.

That means it’s on a delayed curve which will either result in back orders for new product ranges as the planning tries to catch up or obsolete stock for products as they come to the end of their lifecycle, and usage slows down as planning has not reacted quickly enough.

Addressing this issue also means you get insight into the true profitability of a contract or product.

Likewise, knowing the top 20 required shipments rather than just focusing on the 200 makes a huge difference to how a supply chain can react and prioritise their efforts and resources. This also gives a much more focused supply to the field service organisation and the customers with the most need.

Back Orders After The Fault Is Fixed

When parts are ordered direct to the fault on the machine, a small change in process and practice can pay huge dividend – cancel back orders once the fault has been fixed. This may not work for all businesses but it will work for many.

In most cases, back orders are left for the supply chain to fulfil, even though the technician has fixed the issue with a borrowed unit from a colleague or fixing the part rather than the assembly ordered. If the original back order is left, the other technician who lent the part is now second in line to get it returned, which has a knock-on effect with a ‘not required’ demand outweighing a potential ‘urgent’ order.

Also, if the original back order is shipped to the customer and the customer’s machine is up and running, then parts are often lost. One company who introduced this practice (less customer fit parts) reduced their back orders by 52%.

IoT (Internet of Things) – The Holy Grail of Condition-Based Service

Many companies are now firmly into the IoT realm and benefitting from the data that is being provided.

From smart sensors telling them what parts need replacement before an issue arises to optimum intervals between preventative maintenance.

Using this voice of the product alongside customer demand means you can plan your inventory to not only be available before a fault arises, but also plan the consumables and after sales items to a level that has not been seen before.

This moves you into the servitization market with confidence and a predictable profit margin.

Both the supply chain and field service benefit hugely from analytical information, real time data feeds, and expected, predictable outcomes supplied by IoT and its communications. You only need to look at industry verticals benefitting from this already, such as jet engines, fleet management, HVAC and medical devices to name a few.

 

Without asset knowledge, you are essentially working as a ‘demand’ chain and within the limitations of technicians’ ad hoc tasks to manage any intelligent levels of inventory at your locations.

You will always be behind the curve.

Some companies with high volume and low SKU’s can manage with this model, but all businesses will benefit from more real time data and the ability to not just pre-empt future requirements, but act on them.

 

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Heating engineers across the UK will enjoy a new, updated version of PartsArena Pro from January 2017 as creator, Infomill rolls out its latest improvements to the leading source of heating parts and technical data to over 2,600 licensed users.

With the ability to access the app offline on iOS, Android and Windows, PartsArena Pro has fast become an essential efficiency tool for heating engineers whilst out in the field. Instant access to technical manuals, part imagery, interactive exploded views, parts codes and a stockist locator helps engineers to reduce time on-site and improve the first time fix rate by ensuring much more accurate parts ordering.

The system is being used by heating companies including larger organisations and SME’s to enhance customer service and cut cost on site. Many engineers are benefitting from integration with their field management systems, enabling automated parts ordering.

The January update of PartsArena Pro will see many improvements and enhancements, often developed from valuable user feedback. These include:

• A new user interface with dropdown menu replacing tabs
•  One-time log-in account for activation
• Manually add notes to an appliance or part for handy reminders
• Create a Favourites list of appliances and parts for swift access
• Quick access to recently viewed parts and documents
• Copy part codes to a clipboard to paste into external documents
• Automated feedback forms as part of the help and support available
• Full on-screen help throughout the app

 Jonathan Ralphs, Managing Director, Infomill commented on the update saying “We’re very proud of our market-leading app that continues to provide huge efficiency benefits for heating engineers nationwide. Forever wishing to keep PartsArena Pro cutting-edge, we have a highly skilled team that reviews all user feedback in addition to technological advances, to understand how we can make this invaluable app even more effective and intuitive to use. The result being that this updated version will certainly enhance service performance every single day."

PartsArena Pro is increasingly being integrated into field service management systems to offer efficiencies at every level coupled with a better customer experience. A recent example concerned field service management company Aeromark working with Infomill and Plumb & Parts Center to deliver a brand new, fully integrated system for use by Swale Heating; a ground-breaking USP for this heating company.

 

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For manufacturers, parts supply and management has a major role in their aftermarket service operations. This event, led by aftermarket software experts Syncron, will show delegates how smarter inventory management can deliver greater customer experience.

Do you have all your inventory challenges under control? Great availability, no redundant or unnecessary stock? Shipping costs minimised, profits on part sales maximised? Happy clients, dealers and colleagues?

If you feel there is scope to improve your organisation's performance in any of the areas above, this Syncron Connect UK event is for you.  It takes place on 8th June, at the famous Belfry Hotel and Golf Resort, Sutton Coldfield, West Midlands.

Delegates will be able to hear about strategies to unlock profits through smarter inventory management, by more accurately estimating your spare parts requirements, better distributing them across your network and maximising profits on their sale

Mike Toms, Business Development Manager, JCB Service, will tell delegates about his company's journey, while Aston Business School will provide insight into how manufacturers can compete through Servitization and Advanced Services. Giacomo Squintani, Syncron, will explain the Best-of-Business v. ERP challenge for manufacturing service operations.

 

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Click here to see the full agenda and to register for Syncron Connect UK

 

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Paul Adams of Solarvista looks at one of the most important, yet often mis-managed areas of field service, inventory management...

Leading edge practitioners have long recognised that effective visible inventory management and stock control are very different from simple inventory reduction. As a result of a sophisticated inventory management system, a world class cost-effective service operation can differentiate itself from the competition, lower costs and drive up customer satisfaction.

There is continued pressure for service to produce the right part in the right place at the right time and to do so at the lowest possible cost to the business. Consequently this effective inventory management has become a fundamental issue in achieving the right level of customer service and paramount to competing effectively in a fiercely competitive market.

 

As the true value of accurate and effective inventory management becomes apparent however, many companies have realised that a totally effective logistics operation is difficult to establish without the proper mechanisms in place.

The right approach.

The traditional tools and skills are struggling in some businesses to meet the service level demands of customers; with the financial imperatives faced by all businesses, more must inevitably be done with less.

One of the most important factors when considering managing your business’s inventory is to know how to achieve equilibrium between having enough inventory and yet not having too much.

Inventory is an expensive part of any business and not just accounting for the purchase cost but all other associated costs such as storage, handling and insurance. Reducing stock also reduces the risk of damage, obsolescence, theft and deterioration, which could potentially become expensive.

By ensuring that the business has a fully competent system that can order appropriate quantities required for specific jobs, it is therefore reducing these costs as well as the risks associated with carrying surplus stock.

Technology, technology…

Operational strategies supported by effective technology solutions, processes and infrastructure will allow the service organisation to deliver cost efficiently, while improving margins and increasing the resilience of the operation to face up to any potential market difficulties. Offering optimum levels of service and providing competitively priced services will position the business to take advantage of upturns in the market. The business should be able to live up to the promises made on its behalf, and deliver cost-effectively increasing customer satisfaction, retention and margins.

Normally the challenge to achieving this type of operating solution is that most service companies are working within an existing infrastructure where they are continually changing “on the run” to keep up with the shifting environment. Using a fully integrated service management solution enables a business to create an infrastructure that is designed to be able to accommodate continual refinement, and able to keep up with the shifting environment, at times even anticipating it to allow positioning ahead of the competition.

 

The improved use of communications should be seen by the business and customers as a positive move to provide better information about customer needs and requirements to both. The target is to minimise the fixed cost element of the operation keeping it variable where possible minimising overheads and creating high flexibility to deliver customer satisfaction.

Conclusion

Through systems integration the business is able to support the customer requirements by understanding customer requirements and providing support across the whole operation.

The ability to out-do competitors and sell cost effective solutions to customers requires differentiators, and these will come from an integrated systems solution enabling the business to have in-depth knowledge of customer requirements provided by top quality staff throughout an effective operation supported by a fully integrated technology solution.

There are a number of inventory management systems, although it is worth conducting some research and being sure to choose a package that is right for your business; the benefits of such a system will far outweigh the costs.

 

“Effective inventory management will give businesses in any industry a distinct competitive advantage over their competitors.” Chris Welsh, Solarvista

 

 

 

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