Service parts business has unique requirements, so much so that I thought it worthwhile to devote a couple of blogs to this topic. Gaea Global is currently implementing WMS for one of the largest automobile companies in the world, in their service parts business and we have seen pretty rigorous requirements for WMS to manage service parts fulfillment. We have helped TTI Floorcare (one of the largest floor care companies in the world, maker of the Dirt Devil and Hoover brands) reconfigure their warehouse in order to better handle the service parts side of their business. Therefore, we have a fair bit of experience in this. First a quick recap of what I have observed as being some of the unique requirements of service parts business:
- Large number of service parts: Obviously J. If you are one of those guys driving around a 1996 clunker for which you also happened to purchase an extended warranty, the auto manufacturer better have the service parts needed for your car. So the end result is that the service parts warehouse must stock a large number of parts. We are talking about 100,000+ parts here.
- Low Demand: Most of these 100,000+ parts are “Slow Moving” parts. This one is obvious too. The demand for service parts declines a few years after the product matures.
- Single Line orders: Service parts business get a lot of volume due to 1 or 2 part orders that are needed for one-off repairs. Due to the small order cube, the orders are mostly parcel shipments.
- Prevalence of “hot” orders: Service parts needs are often needed urgently and I have seen more than my fair share of “hot” orders flow through the warehouse on a given day. Sometimes these orders are overnight shipments because the manufacturer has a guaranteed SLA for servicing the part requirement.
- Very High cost of shipping the wrong product: Shipment accuracy is even more important for a service parts business. Further complicating the matter is that many of the parts look alike and often the part description is also very similar. Often there is a customer who is willing to pay for overnight shipment to get a service part on an urgent basis and getting a wrong part will not be appreciated. Correcting such a mistake after the fact turns out to be very costly.
Stocking thousands of parts is no mean feat. The service parts warehouse needs thousands of bin locations to store parts. The parts could vary from a few inches in length to a few feet in length. You need a large physical warehouse area to house these bins. A large area means a longer pick path. The challenge is to limit travel time to maximize operator productivity and at the same time ensure that a “hot order” gets shipped ASAP to minimize premium shipment service. Since accuracy is important, you need the operator to scan and maybe even rescan a part to ensure that the part you are shipping is the right one. Clearly reliance on Auto-ID is important. Since parcel shipment is important in service parts fulfillment, integration with one of the parcel manifest software like Kewill, Connectship, Precision, etc. becomes important.
In my next post, I will review some of the features in Oracle WMS that addresses the unique needs of service parts fulfillment operations.
