Companies know the comings and goings of their primary products precisely and strive to deliver them according to their customers’ preferences. The same excellent quality should be expected of spare part management.
Spare parts logistics is an essential part of global supply chain management. Market research analysts at Technavio forecast the global spare parts logistics market to grow at a CAGR of 6.93 percent over the period of 2014-2019.
According to Armstrong & Associates market research 2016 the spare parts logistics market is driven by high-value manufactured products and their maintenance, particularly in the automotive, industrial and technological industry verticals. The automotive industry accounts for $18.1 billion, or 34.3%, of total SPL revenue. This is closely followed by the technological industry ($17.7 billion, or 33.5%). Industry accounts for $10.9 billion (20.7%) of total SPL revenue. Elements and healthcare make up smaller portions of the total: $3.9 billion (7.4%) and $2.1 billion (4.0%), respectively.
Improvements in technology for spare parts logistics benefit supply chain management
In B2B business, the quality and speed of deliveries affect the entire production chain. Even if a device has been sold and installed successfully, there may prove to be a bottleneck in its use in the form of a spare part that is difficult to get ahold of.
‘Many companies still have a poor grasp on the availability of their spare parts’, says Antti Meriluoto from the Stora Enso intelligent packaging unit.
Cost-efficient tools for stock management already exist, because the use of RFID technology has become more affordable and efficient over time. This has significantly lowered the threshold for implementing RFID chips even in products and spare parts with a low unit price.
As the price of chips has decreased and efficiency multiplied, the performance of readers has also increased significantly. The fast expansion and versatile utilisation of the technology has continued to support increasing resources in chip and packaging product development.
Save time and effort
RFID tags have introduced new opportunities in stock management, as the location, quantity and quality of products can be verified in seconds. The security of supply of machines and other more complicated products also requires transparency in maintenance and spare parts services.
Quick supply of spare parts decreases unnecessary waiting periods and machine downtime. The management of all the parts of the chain also brings about another benefit: when the availability of spare parts is guaranteed, the need to maintain separate back-up stock near the machine is decreased. Centralising frees up space and human resources.
Maintenance and servicing is further facilitated by connecting the parts of the machine with an automated maintenance service. This transmits data of a damaged or removed part to the system and maintenance personnel know to investigate. The system also records data on parts being implemented, which makes it easy to monitor guarantee periods.
Smart technology expands to cover service industries
The pioneers in implementing smart technology have come from industries where the core operation is also focused on developing new solutions or finding cost-efficient solutions in operations with great volumes. High tech companies and companies supplying logistics solutions are already utilising RFID technology to a great degree.
The service industry, for example, is yet to discover untapped opportunities, which will require a large amount of tools. Health care is a growing field due to the population aging, and it needs to ease caring operations and reduce unit prices. RFID tags could, for example, ensure that operating theatres are stocked correctly and that patient assistive devices, such as crutches, are available in stock. Lost items are also easier to identify, find and return using technology.
6 benefits of RFID systems in warehousing:
- Inventory monitoring and asset visibility: tracking the location and count of inventories in real time. This helps better monitor demand for certain products and place orders to prevent an out-of-stock situation.
- Effective warehouse management: RFID systems ease sorting and picking operations, as they capture real-time, accurate information about product availability.
- Lead-time reduction and perishable inventory control: The pharmaceutical industry and the perishable goods industry can use RFID systems for reducing lead times, which will help to increase the total useful shelf life of items.
- Improved customer service due to accurate and real-time monitoring of stock levels
- Savings in time and resources. Savings through optimising stock and avoiding downtime.
- Better quality maintenance. The authentication of spare parts and the monitoring of use, wear and guarantee periods.