Spare parts logistics and installed base information

Abstract

Many of the challenges in spare parts logistics emerge due to the combination of large service networks, and sporadic/slow-moving demand. Customer heterogeneity and stringent service deadlines entail further challenges. Meanwhile, high revenue rates in service operations motivate companies to invest and optimize the service logistics function. An important aspect of the spare parts logistics function is its ability to support customer-specific requirements with respect to service deadlines. To support customer specific operations, many companies are actively maintaining and utilizing installed base data during forecasting, planning and execution stages. In this paper, we highlight the potential economic value of installed base data for spare parts logistics. We also discuss various data quality issues that are associated with the use of installed base data and show that planning performance depends on the quality dimensions.

Keywords:

• value of information
• installed base information
• information quality
• forecasting
• spare parts logistics planning
• practice of OR

Acknowledgements

This research is partially sponsored by Transumo ECO project number GL05022b. The authors also acknowledge the contributions of IBM, The Netherlands to this project. The views presented in this paper represent the opinion of the authors only and does not necessarily represent the viewpoints or policy of IBM, The Netherlands.