The Importance of Planning Analytics
The service supply chain is fraught with challenges, but spare parts optimization presents a unique opportunity to reduce costs while increasing customer satisfaction. Service supply chain organizations must deal with challenges related to purchase, repair, replenishment, redeployment, part chaining, customer install base, entitlements, and more. The real world is an imperfect world, and because of that, an added challenge facing all service parts planning teams is the need to truly understand the calculated part fulfillment rate versus the actual part execution rate.
Examples of this imperfection include: service bills of material that are incomplete, customer contract data that is fragmented, part master updates that may not happen in a timely manner, and supplier order lead-times that are missed. Another key issue in supply planning and execution is the lack of coordination between these systems. Each of these real world issues impact the ability of the planning organization to accurately predict the inventory required in each inventory location to meet its expected customer service level target. Service organizations bound to contractual obligations of rapid-response Service Level Agreements (SLAs) with penalties often spend significant time and money doing extraordinary tasks in expediting and transportation to meet the customer SLA. So while the customer is happy, the inventory planning team did not meet the planning SLA of part availability and ultimately cost the company money. It becomes important then to not only deliver on the service promise, but to do so efficiently.
Planning Analytics is the process of evaluating and revising your stocking plan so that it becomes as efficient as possible, reducing misses and expedited transportation costs. Successful service supply chain organizations will not only meet customer expectations while optimizing inventory, but they will use planning analytics to assess and measure the plan in .