Service parts management is a strategy employed by manufacturers and service organizations to estimate the demand for each part needed to service a fielded asset, then to maintain the right stock levels to ensure availability without overstock and to deliver the right parts at the right time for service activities. A service parts management strategy plans for efficient and effective asset servicing by ensuring that the service team has the resources required to deliver reactive, proactive, and upgrade service activities. After labor costs, parts are typically the second-highest cost element in service delivery, making service parts management a vital component of a cost-effective service program.
Without effective service parts management, a company is prone to significant waste associated with maintenance, repair, and overhaul (MRO) operations. Just as the DIY homeowner typically makes multiple trips to the home improvement store, a service team not supported by good service parts management may make multiple trips between inventory and point-of-maintenance, incurring a large time penalty as well as transportation costs; and keeping high-value assets out of operation for long periods.
Service parts management is an MRO activity, and these are supported by service lifecycle management (SLM) software. MRO parts management software within an SLM system helps companies optimize their service parts inventories and their service timeliness and efficiency by employing some of the same functionality used to manage materials and inventories before and during asset manufacturing.
To optimize service parts availability while reducing inventories and part spoilage (via obsolescence or otherwise), service parts management involves planning, monitoring, and logistics functions.
Service parts management begins early in a product lifecycle, prior to an asset’s production launch. The first step is to collect pertinent information about the asset’s reliability assessments, warranties, and other factors that drive service events, as well as information on the parts that will be needed to deliver efficient and effective service. A well-constructed and up-to-date service bill of materials (sBOM) [link to glossary page], along with the physical asset configuration [link to glossary page] for each fielded product, provides the data needed by a service parts management operation to determine the precise parts needed for each service activity.
The combination of service event factors and service event parts requirements is used by service parts management software to determine inventory levels and locations. The objective of this parts inventory management is to reduce the number of parts in inventory and the number of inventory locations without “over-leaning,” which can increase logistics costs and may place at risk the company’s ability to meet service level requirements.
Beyond inventory planning, service parts management also comprises inventory monitoring and may include:
Logistics planning and execution
Supplier coordination and management
Service parts management is often summarized as getting the right parts to the right place at the right time. Doing so contributes to highly efficient service activities and lower service costs.
Improved service readiness
Higher first-time fix rates
More timely service at lower cost
Reduced overstock and spoilage
Greater uptime for serviced assets
CIMdata highlights the need for modern Service Lifecycle Management solutions coupled with product lifecycle management (PLM) to successfully address the planning, design, production, and operation of long-life assets.