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Service Parts Planning: The Missing Link in ERP Systems

Any manufacturer with an Enterprise Resource Planning (ERP) system knows that it represents a significant investment. ERPs take a long time to install and are designed to handle mountains of data. It’s not surprising, therefore, that manufacturers often assume that these large-scale solutions will be handling service parts inventory adequately. Unfortunately, however, as customers become increasingly fickle, ERP systems frequently fail to come up to the mark.

ERPs are great at providing a holistic view of the entire IT environment and the supply chain. When it comes to inventory management, however, they can be a little inflexible. Forecasting demand as accurately as possible is critical, and to do this successfully requires an ability to update requirements fast in response to changes in external circumstances.  A cloud-based system, where data can be analysed in real time, is the ideal platform for this.

Make data actionable

According to a post on https://store.germanbliss.com/gehl-parts by the Aberdeen Group, one of the top goals for service leadership is to improve the quality and relevance of data for the service team. With the emergence of more technologies every day and the IoT, businesses are working with more data than ever before.

The combination of ERP power and cloud-based inventory management is a great combination. The ERP aggregates all of the data, and the service parts planning solution makes it actionable. It ensures that every part in the aftermarket supply chain, from an OEM to a field service technician, can contribute information to optimise customer experiences and improve margins.

One example of how the two systems can work in tandem is to allow manufacturers to use the data from across the business to establish patterns of demand. For example, a manufacturer of farming equipment might know that a tractor that was sold as new in 2010 is likely to require updates or repairs in 2016. They can then analyse where the tractors were purchased and ensure that local dealers are equipped with the relevant parts. This allows the dealer to be proactive, rather than reactive – only ordering the spare part because the customer has requested it. This helps to save time in sourcing a product and reduces costs.

 Improve the customer experience

It’s no secret that in today’s on-demand economy, customers’ expect quick and reliable service, and that providing superior customer experiences is key to company success. According to a study by Walker Information, by 2020 customer experience will overtake price and product as key brand differentiators. What is more, research from Gartner states that 80% of business revenue comes from only 20% of existing customers.

This is especially true in post-sale services. Ensuring that the right part is in the right place at the right time is key to a positive customer experiences, and is something an ERP system just isn’t set up to do by itself. But, by integrating a service parts planning solution into the ERP system, companies are able to shift their focus from a low-margin product business to a high-margin service organisation.

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Giacomo Squintani, regional marketing manager of Syncron

Giacomo Squintani, is the marketing manager for Syncron. He has over a decade’s experience across the Service spectrum, primarily in inventory management, pricing, IoT and field service. He understands the challenges confronting manufacturers and how, with the right tools, these can be converted into improved competitiveness and financial performance. When not running Marketing for Syncron in the UK, Benelux and Italy, he’s generally… running.

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