Spare Parts Management

Doctoral Seminar
Spare Parts Management

--Strategies and Processes
14-July-2005
Juan Zhao
University Mannheim, Chair of Information Systems III, Prof. Schader
Content
1.
2.
3.
4.
5.
6.
Review on the last work

Objectives in Spare Parts Management
System Analysis
Logistics Strategies
Process Management
Further Research
Review
Objectives
Analysis
Processes
Further Research
Review on the last work
Spare Parts Management in Aerospace Industry
Definition
Business background
Literature Review
Business Models, Processes and IT systems
Review
Objectives
Analysis
Processes
Further Research
Objectives of Spare Parts Management
Customer Facing
Reliability
Responsiveness
Flexibility
Internal Facing
Cost
Asset Management
Supply Chain Council, SCOR 7.0, 2005
Visibility
4
Review
Objectives
Analysis
Performance
System Theory
Structure Mapping
Processes
Further Research
System Analysis
unsatisfying performance of Spare Parts Management
Avg. Numver of stockouts

and spares inventory turns per year
600
8
513,9
500
6,75
7
6
400
5,25
4,62
300
4,11
272
231
216,1
Avg. Number
of stockouts
per year
200
101,5
100
Average
spares
inventory
turns per
year
0
A ero space
A uto mo tive
High-tech
M etals/metal
pro ducts
Overall
Source: Aberdeen Group September 2003
Review
Objectives
Analysis
Performance
System Theory
Structure Mapping
Processes
Further Research
System Analysis
System Structure and Behavior

Adjustment
time
Goal
stock
2. Order
System
Order Rate
Adjustment
gap
Over stock
Order
Received
goal
Adjustment
time
Shipment
1. Order
System
Stock out
Shipment
Rate
stock
Model of a Second Order System
time
Oscillation Reason: material and information delays

6
Review
Objectives
Analysis
Performance
System Theory
Structure Mapping
Processes
Further Research
System Analysis
Spare Parts Management: complex dynamic system
Dealer
Part Supplier
Producer
Customer
Product
Engineering
Marketing
Repair
Center
Procurement
Manufacturing
Sales
Field
Service
Warehouse
Logistics
Review
Objectives
Analysis
Processes
Further Research
Transportation
-
Expediting
Outsourcing
Direct shipment by part supplier
Inventory
-
Location
-
Forecast Method
Purchase: design/manufacture for serviceability, VMI
Inventory: part segmentation (Cost based , Movement based , Criticality based);
virtual inventories
Outsourcing
Warehouse: Centralization/Decentralization; Hub- and Spoke; outsourcing

Repair Centre: outsourcing, leave it to supplier or customer
Other:
-
alliance, e-Commerce, m-Commerce
Review
Objectives
Analysis
Processes
Further Research
The system becomes more complex.

Processes and IT systems must be adapted to the strategies.
Part Supplier
Dealer
producer
Customer
Service
Provider
3PLs
Review
Objectives
Analysis
Processes
Theory
Modeling
Further Research
Process Management
Business Process
four perspectives: deterministic machines; complex dynamic systems; interacting feedback
loops; social constructs.
across functions within a firm - across firms in a supply chain
Business Process Re-engineering (BPR)

use the power of modern information technology to radically redesign our business
processes in order to achieve dramatic improvements in their performance. (Hammer
1990)
Business Process Modeling (BPM)

the techniques for charactering and analyzing business processes
Business Process Management (BPM)

support business processes using methods, techniques, and software to design, enact,
control, and analyze operational processes involving humans, organizations, applications,
documents and other sources of information. ( Aalst, Hofstede, Weske 2003)
Business Process Outsourcing (BPO)

delegate one or more information technology (IT)-intensive business processes to an
external provider that, in turn, owns, administers and manages the processes based on
defined and measurable performance metrics. (Gartner)
10
Process Management
Review
Objectives
Analysis
Processes
Theory
Modeling
Further Research
BPR - BPM - BPO
Process
Management
Re-engineering
Radical
clean slate
IT-Led
Mechanistic
Inspirational
Future
Lessons from
Reality
Total lifecycle
new/ existing
processes
IT-Enabled
Holistic
Systematic
Past, present, future
Service Level
Management
Business
Process
Outsourcing
Support
Business
Process
Modeling
11
Review
Objectives
Analysis
Processes
Theory
Modeling
Further Research
Process Management
Business Process and Strategies

Processes follow strategies.
Strategies follow processes.
Business Process and IT

enabler, inhibitor, facilitator, implementer, supporter
Business Process and Organization

Functional, hierarchical structure - process-based, horizontal structure
Individuals manage the boundaries of processes.
Matrix-based organization
12
Review
Objectives
Analysis
Processes
Theory
Modeling
Further Research
Process Management
Business Process Management Procedures
1.
2.
3.
4.
5.
6.
7.
Preparation of modeling
Strategy and business process framework
As-is modeling
To-be modeling
Organizational structure
Implementation
Continuous process management
13
Review
Objectives
Analysis
Processes
Theory
Modeling
Further Research
Process Management
Business Process Modeling
Objectives
Communication, Analysis, Control
A conceptual Framework for Process Modeling
Curtis et al.(1992)
Functional, what activities, which data (information) flows;
Behavioral, when and how;
Organizational, where and by whom, what physical communication mechanisms and
storage;
Informational, entities flowing through the process, their structure and relationships.
Standards
Process Model
Process
Modeling
proposal
SCOR 7.0
Supply Chain Council
Aerospace and Defense, Automotive, Chemicals,

Electronics
PIPs
RosettaNet
Electronics, Semiconductor, Telecommunications, Logistics
eTom
TM Forum
Telecommunications
graphical
IDEF0, EPML, UML, BPMN
executable
XLANG, WSFL, BPML, BPEL4WL;ebXML BPSS, ebXML BP TC, WSBPEL; XPDL
14
Review
Objectives
Analysis
Processes
Theory
Modeling
Further Research
Process Management
Field Service Repair Cycle
Down time
Parts Delivery Time
Remote
On-site
Diagnosis Diagnosis
Customer
calls
Machine
fails.
FSE orders parts,

if necessary
FSE arrives with

some or all of the
required parts
Time
Parts
arrive.
FSE returns
unnecessary parts.
Repair job
completed.
Machine is up.
Customer Service
Centre (Regional)
Field Service
(Local)
Logistics (Global)
15
Reference : Cohen 1999; Wolfrum 2004
Review
Objectives
Analysis
Processes
Theory
Modeling
Further Research
Process Management
Logistics Processes in Spare Parts Management
Customer
Order
Order
transmit
Order
accept
Order
prepare
Order
execute
Packaging Shipment
Transport
Delivery
received
Spare Parts Purchase
Spare Parts Warehouse
Documentation
Ester 1997
16
Review
Objectives
Analysis
Processes
Theory
Modeling
Further Research
Process Management
Processes in Spare parts management
Life-CycleManagement
Spare Parts
Production
Supplier
Management
Disposition
/Purchase
Source
Distribution
Management
Service Level
Management
Order
Processing
Retour
Management
Deliver
17
Impuls 2003
Review
Objectives
Analysis
Processes
Theory
Modeling
Further Research
Process Management
The business processes in spare parts management
cut across various classes of application.
Parts
Supplier
PDM
MES
Producer
SCM
PDM
MES
ERP
SCM
CRM
3PL
Customer
TMS WMS
ERP
Life-Cycle-Management
Spare Parts Production
Supplier Management
Disposition/Purchase
Distribution Management
Service Level Management
Order Processing
Retour Management
18
Review
Objectives
Analysis
Processes
Theory
Modeling
Further Research
Process Management
Summary
Process Management is hot word in practices, but few academic

publications. Most articles describe how to implement BPR/BPM.
Existing process models of spare parts management map internal
processes and are rough.
Processes may be interrupted by diefferent systems. Information
are delayed and /or missed.
Problem:
Unique or common processes across companies and industries?

Customized or standard IT- Enabler?
How can the standards help process management in spare parts
management?
19
Review
Objectives
Analysis
Processes
Further Research
Further Research
Processes Modeling
Technique, Standards
Processes Management in Spare Parts Management

Modeling, analysis, optimization, implementation
20
Thanks!
21

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Doctoral Seminar

Review on the last work

Review on the last work

Spare Parts Management in Aerospace Industry

Objectives of Spare Parts Management

Avg. Numver of stockouts

Source: Aberdeen Group September 2003

System Structure and Behavior

Oscillation Reason: material and information delays

Direct shipment by part supplier

Warehouse: Centralization/Decentralization; Hub- and Spoke; outsourcing

alliance, e-Commerce, m-Commerce

The system becomes more complex.

Business Process Re-engineering (BPR)

Business Process Modeling (BPM)

Business Process Management (BPM)

Business Process Outsourcing (BPO)

BPR - BPM - BPO

Business Process and Strategies

Business Process and IT

Business Process and Organization

A conceptual Framework for Process Modeling

Supply Chain Council

Aerospace and Defense, Automotive, Chemicals,

Electronics, Semiconductor, Telecommunications, Logistics

IDEF0, EPML, UML, BPMN

XLANG, WSFL, BPML, BPEL4WL;ebXML BPSS, ebXML BP TC, WSBPEL; XPDL

Parts Delivery Time

FSE orders parts,

FSE arrives with

Process Management is hot word in practices, but few academic

Unique or common processes across companies and industries?

Processes Management in Spare Parts Management

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