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After Market Spare Parts Inventory Planning

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Challenges

Aftermarket spare parts have very strict lead time and order fulfillment requirements, as any delay in delivery or stock out can result in significant losses to customers and violate the service level agreement (SLA).

Compared to finished products, aftermarket spare parts are characterized by:

 

  • A large number of SKUs.
  • Different, and strict SLAs for different SKUs and customers.
  • Difficulty in making accurate forecasts.
  • Occasionally being custom-made for special purposes.
  • Non-substitutable by other SKUs.
  • Requiring a high level of coordination across different functional groups.

To prevent stockouts and SLA violations, companies often resort to overstocking, which can lead to significant waste of working capital.

Sophus Solution

transportation-routes-planning

Segment and classify spare parts based on their product characteristics, such as product value, demand volatility, and ordering frequency.

Improve inventory turnover and reduce the working capital

Recommend when to stock, where to stock, and how much to stock, along with the optimal replenishment frequency.

Benefits

Achieve a reduction in inventory of

20-30%

while preserving the order fulfillment rate.

Focus on enhancing the customer service level by

40-50%

while keeping inventory levels constant.

More about the next generation of aftermarket spare parts inventory planning?

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