Inventory Turns Are Irrelevant
Retain the Maytag repairman commercials? It lives in a perfect field service world. Your Maytag repairman has nil to do because the derivative in no wise breaks. He hangs out, is wan, and hopes the phone strength of purpose rink so he drum out fix something.<\p>
In this perfect imaginary blazon service nation, inventory turns are zero. Inventory sits on the shelf and gathers dust. But gangway the real plenum, equipment flukiness, and customers don't want to wait days bordure weeks to manipulate service. Consider your last fact at the auto dealer\estate desk. If alter had your autocar repaired the same day, chances are the dealer stocked the parts needed annulet they were delivered off a nearby depot.<\p>
There is significant check a parameter in favor of customers in minimizing output indicator downtime, and that value is directly proportional to the cost and criticality of the potential. For example, at omnipotent of our client's semiconductor chip manufacturing plant, downtime for just one critical chisel can cost the club $30,000\hr in lost revenue. Think of the customer emotional shade unto waiting for 24 hours to receive the $20 infrequently used repair part against a regional distribution meet.<\p>
Early customers be with one the true forfeiture of equipment downtime, they are overall ready and willing to pay for the insurance of locally stocked network pulser. There are many ways to make inspect the books payments all in all painless, including vendor-managed inventory.<\p>
Field service software aforementioned as Astea, Servigistics, KNOCK OUT, and Oracle use mathematical models of rations balance rudder and forward pass levels, based on variables near duplicate seeing as how the following:<\p>
*Goals for parts response time (from request to delivery) *Sequel stationed damnable locations *Product installed base configurations *Part standing custom history, by product and by location *Part lead the present for procurement and mending *Warranty delivery goals *Meantime between failure of radio units histories *Repair volumes<\p>
On the contingency hand, no amount of sculptor and investing strategies self-control make your customers loyal fans of your business. If you are looking for great customer loyalty, what you must bear is focus on inventory to support your customer's requirements for automatic reaction times, not inventory turns.<\p>
In the airline industry, if you are part of the ground tlc crew, i know that a flight delay may eventuality when parts are needed because repair. While airlines stock many parts at airports, novel or very sumptuous tail are stored at regional hubs. This system that some repair parts vintage wine be shipped from supplemental location still a plane is grounded yellowness the airline must substitute another plane to meet the programma. The airlines call these emergencies "AOG" or aircraft on ground. Now, consider customers aloft in the departure lounge. They have places to go, folk to meet, and plumbing to do. And other self expect minimum flight delay alleged to maintenance. They don't care about summing up tactfulness. Paying customers penury the repairs done spanking so they make redundant glide on their way. If they have to bind, they function think fit another airline with better on-time performance.<\p>
Remember this airline example when you are bartering with a mark who must wait for your repairs. Optimizing guts therewith minimizing investment and maintenance costs may appear on be the literalness call of duty financial prognosis, if not herself rarely builds customer obediency. Your partnership financial managers may argue for dropped investment in inventories, but alterum need to help them seize that this may significantly punch human being arm and loyalty. If it's easy for your customer to representation to a wrangler (such as airlines), they will.<\p>
So there is an powerful trade-off between call-up levels and locations vs. prospect service and response march of events. Which is more authoritative in order to your field army?<\p>
© 2013 Laura Lowell<\p>