Especially in the procurement of spare parts, there are often shortages in the supply chain. The main reason is that ordering and delivery processes are usually manual – i.e., once orders are placed by fax or e-mail, they disappear in a black box until delivery. During that time, you can’t tell whether the supplier has received the order or not, whether they are in a position to deliver on time, when the goods will be shipped, or when they are likely to arrive.
Dozens of replenishment managers are often busy around the clock phoning around to clarify details with the supplier, find out how the order is progressing, and when the goods can be expected.
Small suppliers are difficult to integrate
Unlike in the production business, where large quantities are ordered from suppliers that are generally electronically integrated into the process, spare parts orders with a large proportion of aftermarket suppliers are placed only sporadically. In such cases an EDI connection makes no sense, in many cases it is not even possible to map out a web-based EDI process, and since order volumes are so small, spare parts business is usually not very attractive, even for suppliers.
Procurement of spare parts made easy
But there is no need for supply problems in the spare parts business either! One major automobile manufacturer has succeeded in integrating 1,500 spare parts suppliers using different types of connections within a standardized order and delivery process. The core of the new process is a comprehensive concept of notifications, which automatically informs the replenishment manager if the order process has hit a snag at any point. This not only reduces the operating costs of the replenishment department significantly, it also minimizes the occurrence of out-of-stock situations.