It’s only though a discussion with a vendor of “electronic parts catalogs” that we understood that this is the most common nomenclature used to describe what we describe as a service parts database. We cover service parts databases in this post below.

http://spplan.wordpress.com/2008/11/26/service-part-maintenance-databases/

Electronic parts catalogs are complex and have special needs in terms of supersession and detailed service information. Companies like Enigma, combine pure content management (which is a very broad field which incorporates the storage of almost any organized form of readable data) along with procurement decision support, among other functionalities. This type of functionality actually dovetails with bill of material or BOM management software – one example of which is Arena Solutions. However, while BOM management software is primarily used before and item is made, service parts databases (SPDBs) or electronic parts catalogs (EPCs) are used after the products are deployed and ready to be ordered. There is a good reason to integrate the system. As a test case we have attempted to do just this with our service parts portal, which is a simplified service parts database which integrates real time with an Arena Solutions demo system. The web technology of widgets, allows one web page to display the content of other HTML based systems through screen scraping. (we discuss the importance of making 100% web interface supply chain software in this post)

http://supplychaininnovation.wordpress.com/2009/05/29/web-enable-supply-chain/

Service Parts Portal

We have taken advantage of this technology to produce the demo that you can see at the page listed below. (it comes with its own demo video, which we have included below as well.

http://www.servicepartsportal.com

The integration above is not implemented nearly enough.

[youtube=http://www.youtube.com/v/VjiYB_x9es0&hl=en&fs=1]

This video is available on the Service Parts Portal site as well.

The Logical Integration

The reason integration it is necessary is because it is important to have new parts, part supersession, and other changes reflected in the EPCs so that the correct parts are ordered. However, PLM (collaborated on by designers, manufacturing and suppliers) has been considered a separate system from EPCs (collaborated upon by parts managers, dealers, and inventory planners).

In our previous post we discussed the problems with how automotive service parts websites are dominated by dealers. We also discussed how this is inefficient and why these web sites should be centralized and either managed by the manufacturer, or simply outsourced to a company that has this as a focus.

http://spplan.wordpress.com/2009/05/14/auto-service-parts-websites-a-problem/

However, after further research it turns out automotive service networks have even bigger problems than this. When consultants for service parts planning software company MCA goes into an account and uses its SPO software to perform inventory re-balancing, they often find that parts are kept too low in the supply network. This is often because fill rates are only being locally managed and and local managers are attempting to move parts to where they will eventually be consumed. The problem with this is that transferring parts from a forward location to another forward location is less efficient than moving parts from the parts depot to the forward location. Secondly, there is no reason to move a part to a forward location unless there is a high probability of consumption, or unless transportation lead times are particularly long. This analysis of where parts in the field should be located goes by a number of names including multi-echelon inventory optimization, redistribution and inventory re-balancing.

See the diagram below.

See these posts for more on part redistribution.

http://spplan.wordpress.com/2008/04/23/drp-vs-multiechelon-planning/

http://sapplanning.wordpress.com/2009/04/23/inventory-balancing-in-spp/

Generally, the independent dealer model has worked against, and appears to be working against rational inventory pooling. AMR Research (who we are not big fans of because they are so frequently wrong on their forecasts) does have a good point when they bring up this point in their paper Service Parts Planning and Optimization.

During the course of this research, we found SPP applications tended to be very tactical in nature, solving specifc inventory, fll rate, or service-level goals. Oftentimes service is still being viewed as a cost center, and SPP applications are not necessarily viewed as the keys to a greater world of service nirvana.

One explanation is that the buyers of SPP software tend to be planning managers or director-level planners who have no jurisdiction over service and repair or other areas of the SLM model. Other reasons include outsourcing, where OEMs have outsourced the service process but retain the planning aspects, or the fact that the company was never in charge of service in the frst place—think of an auto OEM and the dealers that actually provide the service.

During the course of this research, we found SPP applications tended to be very tactical in nature, solving specifc inventory, fll rate, or service-level goals. Oftentimes service is still being viewed as a cost center, and SPP applications are not necessarily viewed as the keys to a greater world of service nirvana. One explanation is that the buyers of SPP software tend to be planning managers or director-level planners who have no jurisdiction over service and repair or other areas of the SLM model. Other reasons include outsourcing, where OEMs have outsourced the service process but retain the planning aspects, or the fact that the company was never in charge of service in the frst place—think of an auto OEM and the dealers that actu-ally provide the service. – AMR Research

Better Service Parts Planning Begins with Cooperative Planning

Rather than having every dealer attempt to manage its inventory, a much more rational and effective setup is for the dealers to pool their parts at a local depot and for the depot to manage the parts for them. Daily local “milk runs” would ensure part flow to the dealers, and would reduce the poor inventory turn of parts at the dealer location. A series of these depots can then be large enough to be electronically connected and to have their inventory represented in a web order fulfillment system that can better match supply and demand than can a series of disconnected dealers all trying to manage a smaller amount of inventory locally. Honda (for instance) could manage this themselves, or instead could outsource the management to a company like Amazon.com, that really knows how to produce transactional web sites and knows how to match supply and demand. This solution would be vastly superior to the current one where small dealers attempt to manage their own service parts websites (and where it took us 2 hours searching various dealer sites to find that we would have to call in to order a part)

What is happening in the dealerships is a disinterest in making changes or becoming more flexible in order to adopt new technologies. Companies can make a lot of money in the short term by simply living off of monopoly power. GM was the poster child for inept management, inward thinking, abusive supplier relations and unresponsiveness to customers. A good catchphrase for management consultants could be “Don’t be Like GM.” While Honda quality is much much better than GM’s ever was, Honda’s dealer network with respect to their service parts management is not all that much different. In fact most manufacturers seem to employ the same inefficient system. This demonstrates the restrictive influence of the dealership system that no matter how good the car company, the dealer system remains anachronistic.

Conclusion

The current dealer centric automotive service distribution system is an anachronism and is probably one of the reasons that dealerships have such high costs. Instead of attempting to reduce these costs, dealers are simply passing on their inefficiency to the consumer. However, dealers should be wary. While they have used political finagling to prevent web based car purchases, this will eventually come to pass. The only thing that the dealers are really necessary for is for providing local service. They should do what they can to make their service operations, which includes service parts planning and management as efficient as it can be. A big part of the answer to this is to begin cooperatively or centrally planning and pooling inventory.

Parts Hub

The parts hub concept has also been proposed by John Snow, at Enigma, which is a software company focused on parts procurement decision support. The post on this topic can be found here.

http://www.uptimeblog.com/aftermarket/how-fewer-dealers-can-sell-more-parts/2009/05/

Reference

Service Parts Planning and Optimization, ARM Research 2007

Post-Reference

After this post was published, we found that auto dealers have a considerably poorer track record on customer service for repairs than independent shops. This promoted us to write this article that questions the validity of dealerships generally and proposes a dealer-less model.

http://spplan.wordpress.com/2009/05/18/automotive-dealers-mostly-useles/

John Snow has some interesting things to say about this concept at the link below.

http://www.uptimeblog.com/electronic-parts-catalogs/simplifying-parts-sales-make-it-easy-for-the-customer/2009/05/

Service parts require extensive documentation because of the need to capture information from service calls. Successive service calls (in addition to other research performed by the service technicians). This is of critical importance to service organizations, and the requirements for doing this would not seem to vary greatly from company to company. Desirable traits in this software would be:

1. The ability to easily update the service part data
2. A distributable web based system
3. Volume and security capabilities
4. The capability to handle image, video and audio files in addition to various document attachments

These are all capabilities met by a CMS or by blogging software like WordPress or Typepad. We were curious about how service parts and maintenance databases are being developed generally. What we found surprised us in that we did not find anywhere near the activity in this area that we expected.

__________________________________

Nomenclature

It is important to recognize that this is not the only name for this type of software. It also goes by the name electronic parts catalog or EPC. We define this other term in this post.

http://spplan.wordpress.com/2009/05/30/electronic-parts-catalog-and-service-parts-databases/

__________________________________

Generally Available Applications

Here are a few we ran into. One is called Aligni, which specializes in component management

You can test the trial yourself. However, they seem to be more of a parts management system rather than a part service management database. In fact the shortage of vendors or even announced programs in this area was erie. However, service parts are a greatly under-serviced market from a software perspective. If our initial research is correct, there are huge benefits to be received by using blogging software to build and maintain parts databases.

Another is called Engima, which develops service parts databases for purchasing decision support. They create what is known in the industry as an electronic part catalog which is then used as the basis for the purchasing engine.

http://www.aligni.com

http://www.enigma.com

Interaction with Planning Applications

The service part and service maintenance database interact with the planning system in some cases. But in others cases they do not. For instance, the transaction system can feed both the service part planning system and the service part maintenance database (SPMDB)

SAP Equipment Master

There is some confusion, which is only encouraged by SAP product marketing, that the SAP Plant Maintenance module maintains a capability in service management. Their argument is supported by the master data object called the Equipment Master. The equipment master is to the service part what the material master is to the finished good. The equipment master has a very large number of fields. However, while SAP proposes that the equipment master can be pushed out to a portal to allow for the creation of a service maintenance database, the SAP Portal is not designed for this purpose.

A Logical Design

What makes the most sense for clients that use SAP ERP (or other transaction processing software) is to integrate the service parts database with blog software and to periodically bring across new parts to the SPMDB and not worry about sending the maintenance data back to SAP ERP.

Conclusion

The lack of focus or commitment of resources into developing service parts maintenance databases is strange and a missed opportunity. We can not say for sure, but we can imagine how service part maintenance databases may have become commingled with Product Life Cycle management. We hope that is not the case, as PLM is focused on the beginning of a product’s life, service parts maintenance databases are focused on the end, and are really a different animal.