For most organizations, inventory is big. It's often the second-largest asset on the balance sheet. Tracking and organizing an animal that large is complex for any organization. For businesses engaged in providing service and service parts, however, the task of inventory management is doubly complex. A service organization can staff thousands of sites around the globe in order to provide the highest level of convenience to customers. Those "field" organizations, including warehouses, depots or even service vans that stock and transport hundreds of parts daily, must be able to deliver the right service to the customer at exactly the right time. When the stakes are that high, a missing or out-of-stock part can send customer satisfaction--and related profits--plummeting.
Faced with this problem, some organizations overcompensate, purchasing lots of stock and sticking it in a variety of locations. Others may not purchase enough stock, only to find themselves at a loss when customers call.
Xelus, a service solutions provider based in New York, understands the needs of the service industry and offers a suite of products aimed at optimizing inventory management.
"What we help you do is give your customer a positive answer and say, 'Yes, we have that part and we'll send someone out right away,'" says Xelus Marketing Manager Lisa Schaertl.
Many of the traditional methods organizations use to manage service inventories, such as spreadsheets or homegrown software systems, don't adequately track inventory needs, Schaertl says. And the enterprise planning systems that some companies use to streamline manufacturing operations aren't really designed for a service operations environment since they don't have the capability to enable planners to effectively source, deploy and replenish hundreds of thousands of parts.
Xelus offers four product solutions aimed at maintaining a well-balanced inventory across the entire service network: XelusPlan, XelusLink, XelusExtend and Xelustrade. Xelus offerings let organizations do everything from automate their planning function to creating tools for collaborative planning and Web-based sourcing.
According to Schaertl, most Xelus customers are able to increase customer satisfaction and reduce service inventories by about 30 percent.
The Right Parts
Xelus' flagship product, XelusPlan, was designed specifically to support the demands of managing a service parts inventory. It can generate a unified, integrated plan for supply, demand and deployment and give planners the ability to handle large numbers of items in a variety of locations. By reconciling the demand with the available supply options, organizations are able to find the lowest cost solution.
XelusLink is a browser-based application that allows all personnel involved in the service operation to collaborate on service parts forecasting, scheduling and deployment. The applications offer remote access to select XelusPlan functions via the Internet to create a "global inventory planning community" that can include field service and sales personnel, customers, suppliers and partners. Participants can review parts, forecasts and schedules and enter adjustments and submit recommendations. Such a system brings local intelligence into the planning function.
XelusExtend increases the level of optimization across the service enterprise. Operating on a set of assumptions, facts, and statistical models, XelusExtend uses a mathematical model based on probability to forecast demand and establish optimal stocking levels for field locations. Like XelusLink, XelusExtend also supports Internet-based collaboration between corporate and field personnel so real-world knowledge supplements statistical calculations. The application forecasts needs from all low-volume, low-demand stocking locations and establishes optimal stocking levels, resulting in better service levels and lower inventory costs.
Xelustrade, the suite's e-business portal, creates multitiered, online trading communities to facilitate balancing, sharing, sourcing and disposing of service inventory. Accessible from any PC using a standard Web browser, Xelustrade allows users to store and feed information about available or excess inventory and forecasted demand. Using this information, the application can match supply and demand. The system automatically looks to meet demand needs internally, rather than looking to external sources. Other functionality includes the ability to prepare and distribute requests for quotes and sales offers to pre-approved trading partners, as well as the ability to compile and analyze responses and notify trading partners when they have been awarded a bid on an RFQ (request for quote) or a bid on a sales offer.
Unisys, an e-business solutions provider, has been using XelusPlan for three years. In October, it added Xelustrade to its toolkit and has already begun to reap the benefits.
"The increase in efficiency and productivity created by Xelustrade has been sufficient enough to cover the expense of the software," says Dominick Martelli, director of global inventory management for Unisys Global Network Services, the service and repair subsidy of Unisys Corporation. "In addition, we are experiencing between a 10 and 15 percent improvement in purchase price variances, resulting in lower costs of material to Unisys and our customers."
Unisys manages two major warehouses and more than 200 local distribution centers around the globe. Service parts volume averages more than 2,000 orders per week. "Global customer services are the feet on the street around the world that are repairing and maintaining both our equipment and multivendor services," explains Martelli.
Global Network Services has integrated XelusPlan into an existing custom procurement application and uses it for all inventory planning functions, says Martelli. The application is used to determine the requirements for replacement parts, such as keyboards, monitors, printer parts and other items used to fulfill Unisys' service obligations.
The latest addition of Xelustrade has allowed Unisys to streamline its previously manual process of making requests for bids, awarding contracts and maintaining supply chain management.
"Xelustrade has eliminated all the paper," Martelli says. "Basically, it automated the process of notifying vendors of requests for quotes. It allowed us to go to two to three times as many suppliers as we were able to go to before."
Requests are sent out automatically and vendors can reply electronically, which eliminates the hassle of lost faxes or missed phone calls, Martelli says. "A process that used to take a week is now done in a matter of hours."
The increase in productivity has allowed Global Network Services to re-allocate resources to other areas and at the same time increase customer service efficiency.
Martelli says Unisys selected Xelus for its speed of implementation and the ease with which it could be integrated into existing systems. According to Martelli, the Xelus applications have helped Global Network Services achieve one of its business goals. "Unisys is the leading provider of e-business solutions," he says. "Our objective is not only to help our customers build and leverage e-business. We also want to extend these benefits to our partners and ourselves. It's kind of walking the walk and talking the talk. People talk about e-business [solutions], but they don't really use them. We want to use them and be able to say to our customers that these are the options you want to go forward with and we are going to make ourselves a top-notch application."