Challenges of Spare Parts Management
Aftermarket spares management presents many supply chain management challenges, including forecasting, delivery speed, and managing holding costs. Customers expect a certain level of post-purchase service when issues arise and there are large industries devoting to servicing these aftermarket needs for industries like aerospace, automotive and home appliances.
Unlike production forecasting, which has a somewhat more consistent demand flow, aftermarket spares forecasting deals with demand that is much more volatile. This can cause inefficiencies in the supply chain whereby either too many spare parts are held in excess of demand or not enough spare parts are kept on-hand, creating a shortage that can lead to a loss in sales. In the former case, the company is spending more money than is necessary to hold inventory, while in the latter case, the company loses sales by not having any replacement parts available to sell.
Depending on the requirements of the customer, the lead times could vary from hours to months. In some instances, such as automotive or home appliances, the lead time is not as critical. In contrast, with an airline company for instance, spare parts are needed immediately and every minute counts. A mechanical issue that leads to an aircraft being grounded can cost up to $150,000 per hour. The longer that the plane is idle and not on schedule, the more it will affect the scheduling of the entire system and cause customer displeasure. Many companies specify the aftermarket service level requirements in the initial point of sale contract as the aftermarket service level promised can influence sales of the initial product. Customers want to be certain that they will have a remedy should there ever be an issue with their product.
Of course, one of the largest costs associated with aftermarket spares is the cost of holding physical inventory. Companies must decide how much to hold, where to hold it, and who should hold it (in-house vs 3PL). In some instances, when customers require an exceptional level of aftermarket service, companies will choose to hold the same spare parts in several locations. There is a cost both in the increase in the aggregate amount of inventory being held and the cost to maintain and staff the aftermarket spare parts distribution centers. However, in other instances a single distribution hub handles all requirements for aftermarket replacement parts. This helps cut down on the amount of inventory in the system but increases the distance between the service center and the customer, increasing the lead time.
Spare Parts Management with 3D Printing
3D printing offers some unique capabilities for aftermarket spares management. Rather than investing in warehouse space to hold replacement parts, products can be held in a digital repository. All the technical data of a component can be held in a central database and accessed anywhere when needed. Once a customer places an order for a spare part, the product file can be pulled and manufactured on-demand using 3D printing. Not having to physically store every single component for aftermarket demands allows companies to provide a greater breadth of service and supply more parts. For instance, many automotive aftermarket parts suppliers struggle to maintain high levels of aftermarket service because many consumers hold onto cars for decades. To service every customer, millions of components would need to be kept on-hand.
In addition to savings on inventory holding costs, delivery times can also be improved. Rather than transporting parts from one distribution center to another to the eventual customer, products can simply be sent from the digital repository and printed on-demand at a 3D printing service bureau near the customer. A 3D printing fulfillment system for spare parts orders provides a level of adaptability that can better service the variable demand requirements that are characteristic of the aftermarket industry.
Contact us to start using 3D printing for your aftermarket needs!
We offer on-demand manufacturing for low volume production orders to support your aftermarket spare parts needs. Contact us to get your spare parts!