Spare Parts Logistics

In a computer spare parts supply chain, usually the network consists of the country depot that stocks all the parts required to support the field. The number of parts in such depots run very high depending upon the volume of sales and can range from 15000 SKUs to 35000 SKUs, depending upon the model and vendors.

In a country, regional locations are housed in all states or major markets normally in all major cities. At the regional and local levels, the parts supply warehouse is often combined with test repair centers where customers can walk in and submit their laptops or products for repair.

Spare parts are delivered out of these outlets in two modes:

One is under warranty service where the customer has bought a warranty contract with the company including free replacement of spare parts. In such situation, the good part is issued by the warehouse instead of receipt of a defective spare part.

The other mode is sale of part where the customer pays for a spare part and makes the purchase.

Besides the Test Repair Centers, larger markets also have authorized service agents and dealers located all over the city. The regional warehouse receives orders for parts from these dealers who service the end customers. The orders can be under warranty free replacement or sale of part. Warehouse accordingly services orders and delivers parts locally to the dealers and collects the defectives back.

The regional warehouses, in turn, requisition parts from the country depot based on their forecast and stocking pattern.

In case of parts supply warehouses, commonly they contain two different warehousing divisions’ namely good part and defective parts store.

In case of good spare parts, the warehouses maintain and manage two separate inventory lines as well as separate processes to manage original spare parts procured from vendors and refurbished spare parts repaired locally through third party repair vendors.

Against each good part supplied, a defective part is taken back which travels through the various stocking points to the warehouse’s defective parts store. The defective parts stores issue parts to identified vendors for repair and once repaired issue back the refurbished parts to good store for inventory.

In some cases the defective parts if still under warranty are grouped together and re-exported back to the vendor overseas for free replacement under warranty.

The entire supply chain network of spare parts involves the Logistics department of the principle company, inventory planners, test repair center teams and outsourced 3PL warehousing partners who manage to warehouse and local logistics and designated dealers, authorized service representatives and repair vendors.

The entire supply chain rides on a strong backbone of IT application that manages sales order fulfillment on one end and inventory management at the other end. The applications are robust with enhanced features to be able to manage and track warranties and also SKU wise stocks and serial nos. Defective parts collection and management is as important as good part management and carries the same value as it becomes a refurbished good part once again after repairs.