Aftermarket Spare Parts Network Design
Challenges
The success of a brand’s market share and awareness is not only dependent on the quality of its finished products, but also on its after-market service.
For industries such as PC, high-tech, automotive, and aerospace, managing aftermarket spare parts is crucial. Aftermarket spare parts demand strict lead times and order fill rates, as any delays or stock shortages can result in significant losses for customers and breach service level agreements (SLAs). These parts are characterized by:
- A large number of unique SKUs
- Different SLAs for different SKUs and customers
- Difficulty in making accurate forecasts
- Purpose-built components that are not easily interchangeable
- Requiring high levels of coordination across multiple departments
Sophus Solution
Recommend the optimal network setup for the aftermarket business, taking into account the complex SLA requirements and geographical demand distribution.
Suggest the ideal number of distribution centers (DCs), their functions, inventory coverage, and capacity based on SLA requirements.
Benefits
Up to a
45-50%
improvement in customer service levels
Logistics cost reduction
Waste reduction
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