Customer Case Study: Essential Screening of on-demand potential for spare parts
“Industrial spare parts on-demand sounds like a great opportunity, but where do we start?”
It was an operational manager in the offshore sector who put their needs into words, in such an illustrative way. It made us realize we must help our customers see their potential, or lack of such, in practical terms down to which parts should I order on-demand, and which should I get hold of through traditional practices.
Current spare parts supply chains are costly, time-consuming, and harmful to the environment. With a more digital supply chain for spare parts where the relevant parts are manufactured locally on-demand, end users can save carry costs, lead time, and reduce their waste and carbon footprint, while stimulating local job creation.
When investigating a company’s potential benefits related to sending files, not parts, it is an underlying condition that with current technologies available, it is not a question of either-or, but about leveraging a hybrid solution where both traditional supply chains and on-demand technologies are used side by side. For the customer in this case study we therefore started out, as we often do, by providing an insight into when and for what parts on-demand manufacturing makes the most sense for their specific operations.
Ivaldi utilized its proprietary software to perform what we call an essential screening. This screening process analyzed the client’s inventory and procurement data and identified which parts were good candidates for future on-demand procurement and manufacturing (ODM).
In this screening, we consider different variables which enabled us to calculate savings around costs, CO2 footprint and lead time. Also, we took into consideration the biggest pain point of the client’s supply chain in order to optimize their return on investment (ROI). In this case it was lead time, meaning lead time savings were prioritized as most important in the identification of parts.
Because the insight a customer can get from an analysis is better the more data we have, the customer in this case provided us with a raw data dump of their procurement and inventory data. We did not want the customer to spend time on cleaning up their data before knowing that they would find saving potential and before knowing they would benefit from the insight.
Generally, in order for our software to perform a successful screening process and identify opportunities, the minimum recommended set of data we request is.
- *Number/SKU – This number(s) will allow us to match items to other datasets and perform broader searches for specific product information.
- *Part Name – This will help us identify possible duplicate SKUs and provide general information on inventory items.
- Part Description/Context Description – This allows us to identify specific requirements from your inventory, helping us better understand your data and identify candidates for Additive Manufacturing. *Sometimes this info is mixed within the Part Name
- Quantity– This gives us information about which parts represent significant value and carry cost to our customers.
- Price – This allows us to select parts that can compete with traditional methods when it comes to manufacturing and carry costs.
- Lead Time – This allows us to develop an understanding of the possible reduction in lead time compared to conventional practices.
-Minimum essential information to conduct a quick analysis is marked with an (*)
After feeding the software with procurement and inventory data, it went through an algorithmic selection and comparison process, leveraging the huge amounts of existing data that we have in our database. The result was a report showing a list of parts divided into 3 categories based on a part’s probability to be a good candidate for ODM and AM.
The final report also identified the most relevant parts and part categories for on-demand manufacturing. Further, the report gave insight into the opportunity in terms of inventory value and lead-time savings potential. The customer used the report in their decision-making process both with regards to when is the timing right to shift to a hybrid supply chain practice, what level should an investment be at and which parts do we start with.
The insight the customer appreciate in this report was linked to their
- understanding and insights into their current, physical inventory
- identification of relevant parts to focus on to achieve the strongest future ROI
- understanding of relevant AM technologies and materials relevant for their inventory when shifting to on-demand ordering and manufacturing
- estimated inventory value that could and should be shifted to on-demand manufacturing
- understanding of their potential to reduce CO2 footprint related to transportation
What was next?
Following the essential screening the customer wanted to do a deeper analysis on some selected parts both with regards to potential, but also because they needed to explore the consequences of a shift to a more digital distribution model for spare parts. This deep dive was also used to align a broader team and to plan steps from identification of potential to realization of potential.
The realization of the potential comes after additional steps such as ensuring availability of digital files, access to a local, qualified manufacturing partner, local manufacturing and implementation of the parts, and an actual reduction in physical inventory. It is not done with a push of a button, but it is inevitably part of the future of a more cost efficient and sustainable supply chain for spare parts.
Do you want to see the results of your Essential Screening? Contact us!
January 26, 2022