The future of parts - from calculated hunch to intelligent prediction

Predicting failure has traditionally been an art, as much as a science. While maintenance professionals have generally mixed quantitative and qualitative techniques in an attempt to predict impending machine failures, they have also tended to rely on experience. Think of it as a sort of wise finger in the air. It’s a method borne out of the demand chain and a desire by businesses to keep inventory as low as possible. Maybe in some instances it worked reasonably well – but ‘reasonably well’ is not the greatest of maxims on which to base an inventory strategy. This is why there is so much interest at the moment in the potential of predictive maintenance and what it means to the acquisition and management of parts.

In reality, most businesses run a demand chain, with the supply chain fulfilling requests from service technicians for specific parts. The supply chain has an obligation to make sure these parts are in stock, creating a high inventory level. But what if the service business could provide the supply chain with a forecast that would allow them to predict the demand and therefore supply the parts in advance, just in time? Surely that would be better than sticking a finger in the air or resorting to a crystal ball to try and keep the inventory at a manageable level?

Intelligent prediction reduces costs

The ability of the service team to deliver this sort of information has been coming for some time. The increasing intelligence derived from products in the field, thanks to sensors and IoT technology plus increasingly sophisticated field service management (FSM) tools has combined to change the service landscape. Now field service teams have to work with supply chain managers to ensure this level of intelligence is filtered throughout the business because it is this intelligence that can ultimately determine in advance the type and number of parts required.

In some cases, companies move to vendor managed inventory, mitigating the cost of holding inventory and reducing the risk of any obsolescence. This also has the added advantage of reducing the freight and removing the need for expedited freight at a higher premium – another win for the overall business.

One of the biggest advantages of integrating with an FSM system is overall visibility of parts and people. The Holy Grail of the right part at the right time delivered to the right technician in the right place suddenly doesn’t seem out of reach. Technology is turning this into tangible reality thanks to recent advances in machine learning (ML) and artificial intelligence (AI). FSM systems will be able to predict the parts needed to complete a work order, independent of an asset performance management system.

The future of parts inventory

Visibility is key because it also helps a business streamline its processes, reducing complexity and potential points of error or bottlenecks. When technicians can actually see their own inventory, along with what’s on order and the levels of stock, it gives them confidence in the job and in communication with the customer. It also helps the supply chain plan for the replenishment of these stocks, helping the service organization maintain a high level of first time fixes, due to availability of the ‘right’ parts at the right time.

If by chance the technician does not have the right parts, instead of having to order an emergency shipment at a premium, they can check the surrounding technicians and stocking locations to see if they can borrow the required part, again keeping inventory lower, reducing the freight costs and keeping customer satisfaction levels up.

This visibility of stock and live jobs can also be vital intelligence for the supply chain. By combining install base data with contract and warranty data, the suppliers can also start to plan pro-actively instead of re-actively on the usage of parts. This means suppliers can have a good idea of obsolete parts.

If spare parts managers can understand in advance the declining install base, they can proactively reduce purchasing in line with the install base and reduce the risk of obsolescence. The same works when introducing a new product range into the field. The supply chain can proactively position parts where they are needed to support this new product. It is ultimately a more efficient use of resources and should go a long way to reducing waste and eliminating unnecessary storage of parts bought on a hunch – albeit a calculated one.