Service Matters from MCA Solutions

The week of February 7^th, I attended the Reverse Logistics Association (RLA) conference in Las Vegas.  As Mike Blumberg reported in his Reverse Logistics Today blog, the RLA conference is a key industry event for Reverse Logistics and Aftermarket Service Professionals.  With over one thousand attendees the conference provides a tremendous opportunity to share ideas and make contacts, and the enthusiastic participation and interaction are testaments to the value that businesses are placing on aftermarket service.

The chart below from RLA illustrates the key characteristics of reverse logistics and the differences from forward logistics. RLA further defines "reverse logistics" as:

"all activity associated with a product/service after the point of sale, the ultimate goal to optimize or make more efficient aftermarket activity, thus saving money and environmental resources."

The conference included interesting discussions in all of the inter-related areas defined in the chart, and a key focus for me were those around service parts management.  I participate in the Service Parts Management Committee and participated in or attended all of the service parts related panels and presentations.

One of the most interesting discussions was in the panel led by Mike Blumberg on "Service Supply Chain Challenges and Best Practices for High Value and Long Life Cycle Requirements." The panel included participants from Applied Materials, Motorola, and LTX/Credence, and their discussion centered on both the importance and difficulty of planning aftermarket service for long life cycle products. 

As products extend beyond the production lifecycle and the ready internal source of supply is removed, determining adequate stocking levels and end-of-life buys require consideration of multiple factors which include:

• Length of service support
• Introduction of new products that replace the old ones
• Upgrades and retrofits
• Failure and return rates of products in the field
• Coordination of engineering changes
• Cost of small lot cycle production
• Alternate part supplies which vary depending on the proprietary nature of the part

One of the conclusions of the panel was that planning effectively is critical not only in managing costs but also in customer service and requires an effective planning tool as well as coordinated processes that extend beyond service into sales, engineering, and supply management.

I recommend participation in Reverse Logistics events to those who are in aftermarket service.  You can learn more about the organization and upcoming events here and to learn more about the service parts management committee, contact Roy Steele, committee chair at rjsteele@rosharassociates.com.