In Part Four of this series we talked about Returns and Recalls. But there are more reverse logistics activities happening in the warehouse. Service Management can be a ‘planned operation’ or sprout up in the operation over time.
In our model, services are not an afterthought (see Figure 1,) but an integral part of the business, not only netting high margins for the manufacturers and channel partners who perform these services, but providing critical data for the overall product life cycle — the Total Life Cycle.
In other writings (see Service Supply Chain) and webinars we have talked about service planning. But not enough has been said about where and how that happens — the services themselves. Although these services are often in the field, they sometimes happen in the warehouse.
Receive It, Account for It, Track It, Fix It, Ship It!
Ok, you have the answers, we can go home now.
Not so fast…
In our research of an amazing amount of warehouse operations, we found that although they have the capabilities to do these activities for new product, they can’t seem to apply this to the service side of the business using their WMS software. Of course the ‘fix it’ operation might not be included, but inbound materials from customers for repair or retread for resale seems to be a process in need of a repair, itself.
We know, too, from talking to WMS suppliers, that the service side is not often part of the RFP coming from prospects, though they could pitch it.And the Service Parts Planning market, itself, though their clients are the biggest enterprise in the world — from governments, armies, mega global enterprises — this is not such a big market. It makes you wonder, with the end-user companies earning 12% to 30% margins they make on their services businesses, how much more they could make if they were more efficient.
Having said the above, there have been some really excellent case studies on service management in the warehouse.The service parts planning’s multi-echelon planning allows you to think about your depot location, depot, capacity and the actual inventory placed in these facilities. (But not at the location and bin level in the warehouse, itself.)
Auto/ID solutions, and lately RFID, have been integrated into large service depots with excellent results. Aerospace businesses, with large expensive components both at airports and specialized repair facilities, have also used RFID for inventory management and rapid location of tools and parts.We are asked, “What modules do I need for a high volume depot and repair center?”So, the great triumvirate if you have real service operations is: Service Parts Planning, WMS, and Auto/ID.
Having real-time inventory information by location also helps field personnel to identify available parts as well as expected arrival times to the repair site. And advanced WMS does a good job of integrating with the accounting systems that categorize the parts pulled by retail, warranty parts, under service contracts, etc., so that not only the accounting is correct, but continued short-term and long-term parts planning is easily addressed.
This is your service execution suite, if you also include maintenance modules and asset management. (But that is a story for another time).
Service management is high profit for many sectors, but could be so much more, with more effective processes, end-to-end, not just the parts planning. And many channel partners who do think of WMS as a core to their distribution and service business, may have software to leverage with their WMS.
For more Warehouse Management technology topics in this series see:
3PL accounting and invoicing requirements – Part One in this series
SaaS vs. on-premises solutions in the warehouse – Part Two in this series
Vertical/Industry functionality in the warehouse – Part Three in this series
Returns and Recalls – Part Four in this series
Other recent Warehouse Strategy articles:
To view other articles from this issue of the brief, click here.