April 19, 2002 (Computerworld) --
The logistics group of United Parcel Service Inc. has expanded its Service Parts Logistics unit and formed an in-house parts-planning team to help customers save money.
The new Service Parts Logistics offering, part of UPS's supply chain initiatives, is intended to help its enterprise customers better service their customers. Service Parts Logistics helps companies support the repair and maintenance of high-tech equipment purchased by their customers by managing parts and repairs as well as the complete overhaul of the equipment if necessary.
David Adams, director of global marketing at Service Parts Logistics, said the new service is heavily geared to helping high-tech companies such as IBM, Hewlett-Packard Co. and Dell Computer Corp. more efficiently ship inventory to their customers.
Adams said the new service will allow companies to reduce after-sales service costs and improve customer service by helping them determine what parts to buy or repair, when to buy or repair them, and where to stock them to meet customer service obligations.
The concept behind the new service is getting parts to their destinations on time and ensuring the best customer service without having extra inventory sitting idle, he said.
"There is a strong need for good after-sale support," Adams said. "Parts planning determines what parts are needed [to repair hardware], how to distribute them and where to keep them so our customers can get the parts to their customers in hours and get their hardware up and running. It's a just-in-case scenario, not a just-in-time one."
Using software from Baxter Planning Systems in Austin, Texas, UPS's Logistics Group's parts planners can calculate how much inventory its customers need, the demand for that inventory and determine the best place to warehouse it, Adams said.
In addition to cutting customers' in-house planning expenses, Adams said the new service can help companies save money by reducing inventory-carrying costs, improving the productivity of their technicians, streamlining their transportation costs and reducing their warranties penalties. Companies pay penalties if they don't repair their customers hardware within an agreed-upon time.
The planning system, called Prophet by Baxter, is fully integrated with UPS Logistics' technology platform, allowing UPS customers to see when and where inventory is moving throughout the UPS Logistics network, Adams said.
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