The service operation is complicated and must have a number of different (and sometimes disparate functions) work together to deliver a successful end result. Often times, the more visible and customer-facing functions get the glory (and blame) when it comes to service delivery (i.e., field service, contact center). These customer-facing service functions also get a lot of publicity in magazines and have cool trends associated with them such as cloud, social, and multi-channel.
Even though service parts haven’t reached ‘rock star’ status in the media and at many trade shows, the importance of parts to service execution cannot be overlooked. And despite this service function seemingly not being customer-facing, it is. As shown in Aberdeen’s 2013 Field Service research, the number one reason an issue cannot be resolved on a first-visit is due to part unavailability (either incorrect or no part) (51% of respondents, n = 156). Furthermore, this research showed that more than half of all visits required a part. That is a lot of unhappy customers. In order to mitigate this risk of not having the right part when needed, nearly half of all top performing organizations (48%) in Aberdeen’s 2014 Field Service research have the ability to link real-time updates of parts usage from technician truck / van stock to scheduling criteria, as compared to only 30% of peers.
The impact on the customer of efficient parts management cannot be overstated. And top performing organizations understand the important role that parts play in service delivery. In recent Aberdeen research on Service Parts Management, top performing organizations were 64% more likely than All Others to have a senior executive in place with oversight of service parts (69% vs. 42%, respectively). This is not an idle position, by no means. A senior service executive or CSO (chief service officer) with management responsibilities for parts is integral in leading the strategic vision for the parts operations; monitoring the revenue implications / opportunities of service parts; weighing the costs and benefits of carrying service parts versus new ones, and ensuring that the parts operations seamlessly works with other functions within service and beyond.
In order to drive the type of gains from parts that these service leaders expect, top performing organizations have implemented a few best practices:
- Field service organization has access to parts inventories
- Parts data is captured and analyzed to aid forecasting of service demand
- Early warning processes have been put in place to alert management of stock-out situations
- Service quality or continuous improvement programs (i.e., Six Sigma, Lean tools) have been implemented
These are just a few of the Best-in-Class practices that have helped drive higher part fill rates, improved first-time fix rates, lower inventory costs, and more accurate part inventories.
The topic of service parts continues to be a key issue in regard to successfully executing field service resolution, and it will been highlighted at this year’s PTC Live Service Exchange held on June 16-17. For more information check out the agenda. Also, Aberdeen will continue to explore this topic and we look forward to you joining the discussion.