2005 juan zhao - spare parts management

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Doctoral Seminar

14-July-2005

Juan Zhao

University Mannheim, Chair of Information Systems III, Prof. Schader

Spare Parts Management

--Strategies and Processes



2

Content

1. Review on the last work

2. Objectives in Spare Parts Management

3. System Analysis

4. Logistics Strategies

5. Process Management

6. Further Research



3

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

Logistics StrategiesProcesses

Further Research



4

Objectives of Spare Parts Management

Customer Facing

Reliability

Responsiveness

Flexibility

Internal Facing

Cost

Asset Management

Visibility

Review

Objectives

Analysis

Logistics Strategies

Processes

Further Research

Supply Chain Council, SCOR 7.0, 2005



5

System Analysis

unsatisfying performance of Spare Parts Management

Avg. Numver of stockouts

and spares inventory turns per year

513,9

216,1

101,5

231

2724,11

5,25

4,62

76,75

0

100

200

300

400

500

600

Ae ro sp ac e A ut om ot iv e H ig h- te ch M et al s/ me ta l

products

Overall

0

1

2

3

4

5

6

7

8

Avg. Number

of stockouts

per year

Average

spares

inventoryturns per

year

Source: Aberdeen Group September 2003

Review

Objectives

Analysis

Performance

System Theory

Structure Mapping


Processes

Further Research



6

System Analysis

System Structure and Behavior

time

stock

2. Order System

1. Order System

goal

Model of a Second Order System

Order Received

Goal

Order Rate

ShipmentRate

stock

Adjustment

gap

Shipment

Adjustmenttime

Adjustmenttime

Oscillation Reason: material and information delays

Review

Objectives

Analysis

Performance

System Theory

Structure Mapping


Processes

Further Research

Over stock

Stock out



7

System Analysis

Spare Parts Management: complex dynamic system

Part Supplier

Customer

SalesManufacturing

Warehouse

Procure-

ment

Product

Engineering

Logistics

Repair

Center

Marketing

Field

Service

Producer

Review

Objectives

Analysis

Performance

System Theory

Structure Mapping


Processes

Further Research

Dealer



8


Transportation- Expediting

- Outsourcing

- Direct shipment by part supplier

Inventory- Forecast Method

- Purchase: design/manufacture for serviceability, VMI

- Inventory: part segmentation (Cost based , Movement based , Criticality based);

virtual inventories

- Outsourcing

Location

- 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


Further Research



9


The system becomes more complex.

Processes and IT systems must be adapted to the strategies.

Review

Objectives

Analysis


Further Research

Part Supplier Customer

producer

Dealer

3PLs

ServiceProvider



10

Process Management

Business Processfour 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)

Review

Objectives

Analysis


Theory

Modeling

Further Research



11

Process Management

BPR - BPM - BPO

Re-engineering

Radical clean slate IT-Led Mechanistic Inspirational Future

Business

Process

Modeling

Review

Objectives

Analysis


Theory

Modeling

Further Research

Process

Management

Total lifecycle new/ existing

processes IT-Enabled Holistic Systematic Past, present, future

Lessons from

Reality

Support

Business

Process

Outsourcing

Service Level

Management



12

Process Management

Business Process and StrategiesProcesses follow strategies.

Strategies follow processes.

Business Process and ITenabler, inhibitor, facilitator, implementer, supporter

Business Process and OrganizationFunctional, hierarchical structure - process-based, horizontal structure

Individuals manage the boundaries of processes.Matrix-based organization

Review

Objectives

Analysis


Theory

Modeling

Further Research



13

Process Management

Business Process Management Procedures

1. Preparation of modeling

2. Strategy and business process framework

3. As-is modeling

4. To-be modeling

5. Organizational structure

6. Implementation

7. Continuous process management

Review

Objectives

Analysis


Theory

Modeling

Further Research



14

Process Management

Business Process Modeling

Objectives

Communication, Analysis, Control

Review

Objectives

Analysis


Theory

Modeling

Further Research

Standards

A conceptual Framework for Process ModelingCurtis 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.

Process Model

SCOR 7.0 Supply Chain Council

Aerospace and Defense, Automotive, Chemicals,

Electronics

PIPs RosettaNet Electronics, Semiconductor, Telecommunications, Logistics

eTom TM Forum Telecommunications

Process

Modeling

graphical IDEF0, EPML, UML, BPMN

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

proposal



15

Process Management

Field Service Repair Cycle

Review

Objectives

Analysis


Theory

Modeling

Further Research

Time

Machinefails.

Customer calls

FSE arrives with

some or all of the

required parts

Repair jobcompleted.

Machine is up.

RemoteDiagnosis

On-siteDiagnosis

FSE orders parts,

if necessary

Partsarrive.

FSE returnsunnecessary parts.

Down time

Parts Delivery Time

Customer ServiceCentre (Regional)

Field Service(Local)

Logistics (Global)

Reference : Cohen 1999; Wolfrum 2004



16

Process Management

Logistics Processes in Spare Parts Management

Review

Objectives

Analysis


Theory

Modeling

Further Research

Order

transmit

Order

accept

Order

prepare

Order

executePackaging Shipment Transport

Customer

Order

Delivery

received

Spare Parts Purchase

Spare Parts Warehouse

Documentation

Ester 1997



17

Process Management

Processes in Spare parts management

Review

Objectives

Analysis


Theory

Modeling

Further Research

Life-Cycle-

Management

Spare Parts

Production

Supplier

Management

Disposition

/Purchase

Distribution

Management

Service Level

Management

Order

Processing

Retour

Management

Source

Deliver

Impuls 2003



18

Process Management

The business processes in spare parts managementcut across various classes of application.

Review

Objectives

Analysis


Theory

Modeling

Further Research

Life-Cycle-Management

Spare Parts Production

Supplier Management

Disposition/Purchase

Distribution Management

Service Level Management

Order Processing

Retour Management

MES SCMPDM

Parts

Supplier

MES SCMPDM

Producer

TMS WMSCRM

3PL

ERPERP

Customer



19

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?

Review

Objectives

Analysis


Theory

Modeling

Further Research



20

Further Research

Processes Modeling

Technique, Standards

Processes Management in Spare Parts Management

Modeling, analysis, optimization, implementation

Review

Objectives

Analysis


Further Research



21

Thanks!

2005 juan zhao - spare parts management

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