Managing the after-sales logistic network–a simulation study

Abstract

The after-sales business has in recent years acquired a strategic role for firms manufacturing durable or capital goods, as it represents a source of revenue, profit and a means to achieve customer satisfaction and retention. The case study analysed in this article concerns a world player of heavy equipment based in Europe. This article analyses the spare parts classification method adopted by the company, and the allocation decisions concerning a second European warehouse and the transfer to that warehouse of a set of suppliers. A simulation model has been developed in order to support these choices. This study suggests that the support of quantitative methods such as spare part classification models and the use of simulation may be of great help to practitioners, in order to focus their effort on what really matters, to adopt cost-effective decisions and to assess the robustness of their decisions to varying exogenous conditions.

Keywords:

• after-sales services
• simulation
• spare parts classification
• product lifecycle

Acknowledgements

The authors would like to thank the Master students Pisut Changmai, Rajesh Maddineni, Emanuele Uberti and Iuliana David for their contribution in the development of the simulation model described in this article.