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A CHOICE LOGISTICSWHITE PAPER
Gaining a Competitive Advantage:Insight for Dynamic Mission-CriticalService Parts Logistics in a Fluctuating Economy
 
 A recent Gartner survey concludes that global IT spending willbe “essentially at” in 2009. One third o respondents statedno change in budget rom 2008, while just under hal projectedonly a slight increase, and 21 percent said there would be cuts.Researchers attributed this to global economic conditions thathaven’t existed or more than 50 years.When coupled with numbers rom the U.S. Federal Reserve’sindex o industrial production citing a ull percentage drop ininormation processing equipment in February 2009, it is clearthat the technology sector is continuing to tighten, a sharp contrastto recent years. As corporate spending drops, capital expenditures on new hightech equipment are signifcantly impacted. Companies arenow investing more on upkeep o existing equipment, placing agreater emphasis on repair and maintenance as opposed to newacquisition.Compromising the perormance o critical business processessupported by technology networks is not an option. This repairversus buy mentality creates a unique opportunity and placesincreased demand on the resources o high tech manuacturersand service providers. To be competitive, they must be preparedto react accordingly.To support this demand, a reliable supply o service parts assetsto keep mission-critical data networking, storage and telecomsystems unctioning is needed. This requires a sound supplychain that can guarantee the right part, in the right place, at theright time, to acilitate timely service and repair to ulfll new andexisting SLA obligations worldwide. Without the ability to deliver,business is at risk.To avoid jeopardizing contracts, high tech manuacturers andservice providers must adjust to these supply chain challengeswith a strategic and nimble approach. Companies that alreadyhave internal bandwidth and expertise or this additional demandare outside the norm.More likely, an outside partner, such as a third party logistics (3PL)provider, should be considered to accelerate the establishment o aexible supply chain that can react to new end-user requirementswith a variable cost model at a moment’s notice. This paper willexplain the undamental components o a successul mission-critical service parts supply chain. It will also detail the beneftsthat manuacturers, service providers and end-users can realizewith this strategic approach. A powerul mission-critical parts supply chain is based upon areliable technology inrastructure that can support a global serviceparts base, with granular visibility to manage assets, and theexibility to react to evolving end-user demands as quickly aspossible.
Introduction
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Companies are now investing more onupkeep of existing equipment, placing a greater emphasis on repair and maintenance.
 
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To manage service parts inventories, many global businessestend to conduct control and oversight in silos, with each countryor region possessing its own unique IT platorm. This is largelydue to the enormous investment and resources required to installand maintain a worldwide IT inrastructure. Yet, without a globalunderstanding o where service parts exist and in what quantities,they cannot be accounted or and strategically sourced.Working in silos is extremely counterproductive in a number oways. Primarily, the platorm cannot be accessed rom a singlepoint o entry to review and upload critical data necessary orstrategic part oversight and planning. Secondly, it’s impossible tograsp inventory levels rom a micro level. For instance, parts justpurchased in Brazil may have been in surplus in Texas. Signifcantresources are unknowingly wasted and spending increased or noreason.Maintaining multiple databases doesn’t provide a complete viewo all available inventory globally which impedes accurate auditsand measurements. What’s more, additional cost is incurred romthe specialized personnel needed to operate these systems,duplicating overall eorts by region and creating unnecessaryoverhead.By contrast, a global technology platorm can oer a distinctadvantage towards achieving a “big picture” perspective. Thisplatorm can provide access to all data in one place, eliminatingthe need to gather disparate inormation that, even i available in atimely manner, is not cohesive and uniorm. It can also streamlinethe use and access o accurate data.
The advantages of a single global platform are many, mostimportantly it allows for consistency of processes and theuniform exchange of information. A sound system shouldinclude:
Easy Integration
 A global platorm must integrate with existing databases in order to access critical data. Seamless integration alsocircumvents the need to duplicate eorts when working with multiple databases. It is highly inefcient to manuallytranser data rom one database to the other to share inormation, which is oten the case or divergent systems.When applied exponentially, countless hours are drained, which is time that can be better spent ocusing on theend-user.
Consistent Uptime
While having a comprehensive and accessible global IT platorm in place is critical, it is not as eective withoutconstant uptime and availability. It must be exceptionally consistent and reliable, with 24/7 access to be viable.I a system is down or even a raction o the time, important updates can be missed and the overall systemhindered. This can be detrimental i an end-user has an immediate mission-critical demand.
Web-based Access
I a system is not easily accessible, it can’t be truly eective. A Web-based system oers convenient login accessregardless o location, with instant insight into what can be considered one giant “worldwide” inventory. This canacilitate a much-improved ow o timely data that can be used to streamline the service parts supply network.
 Archived Data
Readily available access to extensive archived data or detailed historical trend analysis should not be overlooked.Oten, historical inormation rom a ew years ago is as meaningul as data rom the last three minutes, yieldingactionable insight that can impact efciencies. It is not advisable to react to short-term anomalies and alterestablished processes without analyzing historically. Having long-term data available helps not only see the past,but also “predict” the uture.
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Global IT Platform
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