Understanding SAP’s Service Parts Maintenance Solution


Service Parts Maintenance is an SAP Multi Module Solution

Background

I had heard the term Service Parts Maintenance (SPM) in relation to SPP, however, I never paid it very much attention. However, upon re-reading the SPP training documentation I found a very detailed explanation as to what it is. According to the SAP documentation SPM is a combination of SPP, BW, SRM, SNP and EWM. Also the documentation is that this is the template that was selected and used by Cat and Ford. In the documentation which is clearly direct from SAP product management they are very strongly encouraging the use of this SPM design and set of components for other clients. At one point in the documentation, the article notes that some modules can be removed, but then the implementing company “will lose functionality.” This seems like a strange thing to point out, as it is axiomatic that when one does not implement a software component that functionality is reduced.

High Risk Strategy?

Generally SPP has not found a big following in industry. I believe that the design and approach of SAP with regards to SPM is one very big reason. There are a bunch of problems with promoting the implementation of so many modules. First and most obvious is it reduces the likelihood of success of the project. Second, there is no way that these modules would work together as simply as proposed, that is proposed as an integrated solution. A much more logical approach would have been (and can be, because there is no reason this strategy can’t be changed) to focus on targeted SPP implementations and getting a sold base of SPP installs before rolling out the “master plan” for a multi component integrated service parts solution. If I had any involvement with SAP product management in SPP I would push for this approach to be reversed. I get a certain amount of deja-vu with this specific topic. I personally dealt with product solutions that were promoted before they were ready when I worked for i2. Looking back on that time now, I seriously question the sanity of many of the people I used to work with. We had development teams that would continually fail to meet their development deadlines, but continue to grow the future promised functionality. Due to the stock bubble of the time it was considered de rigueur to “think big.” Well it all came crashing down, and everyone of those sales people and developers who told me I needed to “get with the vision” of the company owes me a nice apology (no one ever calls unfortunately, they must be too busy building more sand castles in the sky and reducing value from the economy to call me.)

Should SAP Have Control of Your Entire Solution Design For Service Parts

I would say they shouldn’t. There is nothing particularly “service partsy” about BW. While service parts planning requires specialized software, reporting certainly does not. Possible the best fit for the company may be Teradata or some other smaller innovative vendors in the BI space. Who knows? This is a decision for the data warehousing team, and in case SAP is unaware, the service organization at most companies does not exactly draw a lot of water with the data warehousing team. How about the other recommended tools? Just because a company wants to use SPP, should it use SAP SRM? There is no reason to think so. This same logic applies to each all the modules. Each needs to be evaluated on the basis of the fit with requirements, not with its fit with SPP. I have been working with planning solutions for some time, different planning applications to SAP and non SAP systems. I generally do not consider integrating different systems a big deal and non-fancy flat file interfaces held together by Unix batch jobs and Awk scripts (for data manipulation) work perfectly fine. I never needed fancy integration tools to get the job done.

Conclusion

While I like SPP and service parts planning in general, I would never say that my expertise in service parts planning enables me to propose what other software components that are completely unrelated to planning should be. I don’t think there is anyway around each company performing a detailed evaluation of every module it purchases to ensure it will add the maximum business value. I have always thought that software selection is the most important part of the project. I would recommend not short circuiting that process in order to buy into a vision.

Service Parts Databases and eBay


Some History on Parts Databases

Back in the 2000 at the top of the tech boom, a company called Aspect Technology was purchased by supply chain software company i2 Technologies. Aspect Technology had developed an extensive parts database and the idea was that i2 would be able to leverage this database to power its supply chain software. The merger ended up being a bust, however it did highlight the importance of parts databases. However, a number of years after, industry does still not have the one-to-many concept of service parts tapped.

eBay the Underdog

One the other side is eBay. While eBay started off as simply an auction site. However, with its growth it has created something else. It is now the largest historical product database in human history. Amazingly, eBay did not have to pay for this database. Instead they were paid to create it. This is not the way service parts databases were supposed to have grown. The old (at the time the new) concept was that part databases would be developed by specialized companies with large hoards of consultants and meetings with tightly managed implementation schedules and so on.

What No One Predicted

No one thought that the most successful parts database would accumulate from transactions from an auction site. The database is an emergent property of theactivities are large amounts of people who just wanted to sell their product. The database is no an asset for eBay. It is also an asset for users, but it would be a greater asset if eBay would open the search capability to previous sales that are older than 30 days old. eBay should do this as it would cost them very little and while they claim it at their intellectual property, in fact it cost them very little to develop this database and is most free work on the part of people who created listings with them.


eBay Great for Service Parts Markets That Are Competitive

Even the most esoteric parts are available on eBay…for some products such as computers. However, automobile parts are still limited, which we think is due to tying agreements imposed by auto manufacturers on suppliers. To read more about this, see this post.

http://www.scmfocus.com/servicepartsplanning/2009/05/23/the-reality-of-automotive-service-parts/

eBay Great for Service Parts Markets That Are Competitive

Even the most esoteric parts are available on eBay…for some products such as computers. However, automobile parts are still limited, which we think is due to tying agreements imposed by auto manufacturers on suppliers. To read more about this, see this post.

http://www.scmfocus.com/servicepartsplanning/2009/05/23/the-reality-of-automotive-service-parts/


SAP SPP Continues to Have Implementation Problems


The pathway is not clearing for SPP as the successes have been few and far between. However, there is a solution.

Bringing Up SPP in the Market

SPP has been a long haul for SAP. First of all, this product was an attempt to bring service parts planning into the mainstream. Rightly so, SAP identified service parts planning as a key underinvested in area in the enterprise. SAP thought it could grow this business and combined part of the code bases of SAP Demand Planning, SAP Supply Network Planning and then added service specific capability that had been sitting in other best of breed applications for a number of years. These include:

  1. Inventory Rebalancing
  2. Leading Indicator Forecasting
  3. Repair Buy Functionality
  4. Partial Service Level Planning (planning low on the service level hierarchy)

More details on the service level hierarchy at the post category link below.

http://www.scmfocus.com/inventoryoptimizationmultiechelon/category/service-level-hierarchy/

SAP even surprised me by coming up with in my opinion the best interface for planning in all of SAP SCM, the DRP Matrix. This helped address a historical weakness in the SCM modules, (at least for one module). However, the initial problems began when SAP approached clients and explained the SPP solution to them. Instead of focusing on just SPP, instead clients were shown a demo that included a smorgasbord of SCM functionality which brought many different modules into the solution (such as GATP) and even the SAP Portal. This was a mistake because even the biggest service organizations have a lot less money to spend on software, so getting them just to purchase SPP would have been a success. Furthermore, service organizations are far further down the capability totem pole than the finished goods side of the business, so their ability to even implement the solution that SAP presented to them would have been unlikely. I have spoken to SAP product management about this, and they have re-stated that this is their strategy and that they think it is gaining purchase with clients.

The Partnership with MCA

A second part of their strategy was to partner with best of breed service parts planning company MCA Solutions and created a “xApp” which combined the forecasting functionality of MCA SPO with the supply planning portion of SPP. I have written previously that I am very much opposed these types of arrangements for a number of reasons.

There are several thorny issues with these partnerships.

  • It’s unclear that vendors should be selecting vendors of clients. The large vendor many not select the smaller vendor that is best for clients vs. best for the larger vendors
  • These partnerships allow SAP to say they have functionality that they did not originate and are claiming extraordinary IP rights vis-a-vis the smaller software company
  • SAP’s partnership agreements require that the smaller vendor declare their IP and that IP that is undeclared can be taken by SAP. This was rather shocking and I think shameful that such an agreement would even be drafted.
  • Unequal partnerships like this are inherently inconsistent with the type of economy that a lot of Americans say they believe in. The Federal Trade Commission has a role, which they don’t seem to take very seriously anymore to prevent over concentrations of power in any industry, and that includes software.

I describe this more fully in this post

http://www.scmfocus.com/inventoryoptimizationmultiechelon/2010/01/its-time-for-the-sap-xapps-program-to-die/

However, as luck would have it, the xApp program is currently dying or dead (the xApp program includes something like 140 different applications vendors that SAP has “partnered with”) and by in large they have not caught on. MCA and SAP’s contract for the xApp program was not renewed.

Project Problems

Despite their missteps, SAP was able to get several companies to buy and implement SPP. However, two of the biggest implementation sites of SPP, which are Caterpillar Logistics and the US Navy, are after a number of years and significant expense not anywhere. Navy is not live with SPP, and unlikely to ever go live. This is something the folks over at Navy don’t like to talk about much, as a whole lot of US taxpayer dollars went to Deloitte and IBM for very little output. The blame does not squarely lie with SAP even though SPP does not work properly. I plan to write a future article entitled “I follow Deloitte,” which describes how every post Deloitte SAP SCM project I seem to work on is barely functional. However, Deloitte continues to get accounts somehow due to the fact that too many corporate decision makers are not performing their research. You can read more about the problems in hiring Deloitte to manage services parts projects here:

http://www.scmfocus.com/servicepartsplanning/2010/11/13/deloitte-writes-ok-paper-on-service-parts-but-would-you-want-to-hire-them/

How About Ford?

Another major implementation for SPP is Ford, but they have seen little value from their SPP implementation. The best predictions I receive from those that have worked on the project is that Ford will eventually walk away from SPP. However, they cannot publicly do this because they have invested at least 9 years and very large amounts of money into the implementation. Therefore, SPP now has no large reference accounts for SPP. A hybrid of SPP has been implemented at Bombardier, however this is the old SIO architecture where MCA Solutions performs most the heavy lifting. Therefore, it can also not be considered a live SPP implementation. None of this surprises me, as after working with SPP, it is not possible to take the application live without custom development work or combining with a functional service parts planning applications. This solution turns SPP into a shell, which can make some executives happy, as it means they are using SAP, but the work is done by a different application.

Reference Accounts?

This is a problem because they were to be used as the major reference accounts to selling into other accounts. The problems at Caterpillar are particularly galling as SPP was actually developed at Caterpillar. Caterpillar Logistics is plastered all over a large amount of SAP marketing literature and is the gold reference account for the solution. Here there is not much to reference, unless as a potential client you are willing to wait that long to bring a system live. And secondly, the degree to which Cat is live is a matter for dispute. Cat will do what it can to continue the impression that they have at least some functionality live, because to walk away would mean a PR problem for them. What would be interesting is to see if SPP can be implemented without a large consulting firm as neither IBM nor Deloitte have had success with SPP. SAP should consider backing a smaller firm or doing it themselves as they need a success in the SPP space. At this point the biggest reference-able account for SPP is Ford.

Where Do We Go From Here?: The Blended Approach

SAP’s Product Management Approach with SPP

Some decisions that have been made by SPP product management are very poor. I think the major consulting companies are out of their depth in implementing SPP, and it needs to be radically improved in order to make more if its functionality effective. A significant amount of functionality that is in the release notes simply is broken or does not work properly.

I have performed SPP consulting and would like to see the module, and service parts planning in general to become more popular and widely implemented than it is. However, its important to consider that SPP only introduced some of the functionality that brings it partially up to par with other best of breed solutions in the current version (7.0) (prior to 7.0, SPP was not really competitive) and it can take several versions for SAP’s newest functionality to work correctly. For this reason, including my personal experiences configuring SPP, it would be difficult for me to recommend relying upon SPP exclusively. I think the experiences at Caterpillar Logistics,Ford and the US Navy lend credence to the idea that going 100% with SPP is a tad on the risky side.

To fill in the areas of SPP that are lacking I would recommend a best of breed solution. Some things like leading indicator forecasting really need to be improved. Furthermore, if you want to perform service parts planning with service level agreements (SLAs) there is no way around a best of breed solution. There are a number of very competitive solutions to choose from, and it all comes down to matching the way they operate vs. the company needs.

Simulation Capability Enhanced with Best of Breed

I will never be a fan of performing simulation in SCM entirely. The parameters in SAP SCM are too time consuming to change and the system lacks transparency. However, several of the best of breed service parts planning solutions are very good at simulation. While it may be conforming to use a single tool, it’s generally a bad idea to try to get software to do something it’s not good at. For simulation I would recommend going with a hosted solution and a best of breed service parts planning vendor. (for those looking for an excellent prototype environment for finished goods, I recently have had a lot of success with Smoothie by Demand Works)

http://www.scmfocus.com/demandplanning/2010/07/using-demandworks-smoothie-for-forecast-prototyping/

As few companies want to make the investment to staff a full-time simulation department (planners are often too busy, and lack the training to perform simulation), it makes a lot of sense to have the application with the vendor. As they are experts in the application, they can make small tweaks to the system and provide long-term support to the planning organization. All of this can be built in at a reasonable rate to the hosted contract.

________________________________________

Conclusion

It only makes sense to use the history of an application to adjust future implementations. In doing so, it is most advisable to pair SPP with a best of breed vendor that best meets the client requirements. The additional benefit of this approach is that you get access to consultants who have brought numerous service parts projects live. And those consultants primarily reside in the best of breed vendors. We were recently contacted by a major consulting company to support them in a client which is looking at SPP (we don’t work for consulting companies), and the consulting company was simply focused on getting the client to implement SPP, so knowing the company, it is not difficult to imagine the stories that were told, and what was covered up to get the client to sign on the dotted line. Companies interested in the full story on SPP’s functionality and how it compares to what else is available can contact us by selecting the button below.

References

My service parts planning consulting offering.

http://www.scmfocus.com/consulting/areas-of-specialty/service-parts-planning/

Discussing the underinvestment in parts.

http://www.servigistics.com/solutions/parts.html

On the precise date the SPP initiative was kicked off at Catepillar Logistics.

http://logistics.cat.com/cda/components/fullArticle?m=115228&x=7&id=382143

 

Repair Pal for Repair Costing


Transparency Improved by Repair Pal

On many occasions in this blog we have have decried the lack of transparency in service parts and service repair operations. Recently we found an interesting web site which addresses this for the automotive repair market. It is called Repair Pal. It provides both repair costing – estimation, as well as repair locations that can provide the intended service.

We performed a search for our Honda Accord for a repair we had performed several years ago. This is what the report looks like.


As you can see, it differentiates between dealers and independent shops, with the dealers being more expensive. It also breaks down the labor vs. part cost.

After receiving a “quote” one can look towards the right side of the screen where possible locations are listed to have the work done.


All we can say is, what a great service. We think this is Repair Pal is the first place to check before getting any repair done. Try it out for yourself at the link below.

http://www.repairpal.com Further Capabilities Repair pal allows you to search specifically for the service you need. It also provides a range. We recently needed to find timing belt replacement for our Honda. You can perform a search…


..or you can select.


Advice

RepairPal also provides advice as to when to perform repairs. Our car is 12 years old, yet it does not have enough miles to justify a timing belt replacement. However, RepairPal recommends the belt be replaced every 6 years, which is a great insight and shows that we are completely due for a replacement.


The Saturn Service Parts System

SaturnPlusServiceParts.jpg
In the article Why Auto Service Parts Networks are a Mess…

http://www.scmfocus.com/servicepartsplanning/2009/05/16/auto-service-part-networks-are-a-mess/

I describe why automotive service parts networks are in such a terrible state. However, I was recently forwarded an article that described one service part network that appeared to be functional. It is with an auto company that was willing to try new ways of business, something that many other auto manufacturers and dealers have not been willing to do. As described in the article at Knowledge at Wharton..

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2366

GM dealers have always had to compete not just with other brands like Ford or Toyota, but also with one another. The competition created a boiler-room environment of price-haggling, which turned off many customers but thrilled others. Saturn, on the other hand, had a “no haggling” policy that it backed up with what may have been its most significant innovation: exclusive market areas for dealers. “That was the huge difference,” says Lokey. In a Saturn store, the sticker price was the final price. And Saturn retailers could confidently adhere to the policy because they knew the customer wasn’t going to find the same new car for $100 less a few blocks or miles away. The exclusive market areas combined with the efficient parts supply chain also allowed Saturn dealers to pay the same price for repair parts. Other GM dealers had to compete with one another to keep their supply bins full, and they often had to buy parts from their rivals. At Saturn, the bins were almost always stocked thanks to a computerized system that automatically sent orders to a distribution center. What this indicates is that beyond creating a multi-echelon system (where stocking decisions are shared using true multi-echelon software) a number of other factors such as how dealers are placed into competition with one another is also important. However, the system relied upon inventory pooling between dealers and the automotive company regional warehouse. This lead to a service part turn-over of on average more than 7 times year (which is quite high for service parts).

The design of the system is explained below from the article in the Sloan Management Review

Saturn’s Supply Chain Innovation: High Value in After Sales Service

Retailers review Saturn target level recommendations at the end of each day, then Saturn automatically replenishes to the agreed on target level. Replenishment orders are received at the central distribution center and are shipped out according to the delivery schedule, leading to a three a shorter response time if the ordered part is in stock at the DC. Otherwise the part is either put on back order or sourced from the production inventory stock. Note that a pull system such as Saturn’s is based on target levels. Using one for one replenishment means that Saturn does not position inventory in advance based upon forecast consumption. The shipped part also is replaced automatically within 3 days (assuming availability at the DC). Saturn essentially tells retailers what to stock. If a part does not sell after nine months, Saturn takes it back and repays the retailer. Each retailer (dealer) inventory system is linked directly to Saturn management system. What is happening here is what few automotive companies use, a centralized service parts planning system. However as described by this article from Sloan Management. Although central inventory resources can be shared, companies often make planning decisions for retail locations independently, looking at forecasts of local demand and lead times from the central depot orsuppliers. Unfortunately, this parts system, which was recommended by Morris Cohen and Hau Lee, is at risk as Saturn is looking for a buyer, and their possible arrangement with Penske has fallen through.

Saturn owners will now be serviced by GM dealerships, which is definitely not what Saturn owners bargained for when they purchased a Saturn. They will now have to work with a considerably lower capability service network. It unfortunate because the Saturn system, if it persisted, could be extensively studied and perhaps copied. Currently, this is not very much written on the Saturn system, and if Saturn dies or dissipates, there will be less opportunity to gain insight into what they did that made them so different.

Postscript:

After this article was written Saturn did in fact go out of business. It is unfortunate that one of the best service parts systems went away with Saturn ceasing to exist. It does not appear as if GM took any of the key learnings from the work described above, as GM still scores poorly in service parts management. Saturn is now only an aftermarket business which will continue until Saturn cars fall out of use.

References

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2366 http://sloanreview.mit.edu/the-magazine/articles/2000/summer/4147/saturns-supplychain-innovation-high-value-in-aftersales-service/


Using Box.net As a Service Database

ServiceInformationBox.net_.jpg
Information Management

We maintain a separate blog dedicated to information management. On this blog we have written about a service that is set to change file management as currently practiced.

http://infoknowledge.wordpress.com/2009/06/15/data-management-easier-on-the-web/

There are many implications to file management for Box.net, however the one we want to discuss here is the capability with respect to service parts information.

Box.net

Box.net allows you to easily keep documents, and then to link these documents to web pages and to send these links through email. Service parts have many files such as specifications or user manuals. The question is how to best manage these documents. Our previous idea was to simply integrate the documents into the actual web page. See an example at our Service Parts Portal website.

http://www.servicepartsportal.com/?page_id=255

However, now we are not so sure that this is the best approach. A better approach may be to host the files at Box.net and then simply profile links to the page that lead to Box.net. Box.net has an excellent interface for managing large numbers of files, in fact we think it currently the best on the web. Systems like SAP and others are trying to maintain the content in a central repository, the fact is ERP systems are not very good at this.


Service Parts Management by Halliburton in Iraq Beyond Belief

IOS

A License to Steal

The story behind Halliburton is well known and has been documented in many articles, books and movies as a company that constantly defrauds the US government. The behavior of Halliburton regarding service management and planning, as documented in the move Iraq for Sale, in Iraq is absolutely shocking.

[tube]6cJlJudDtVE[/tube]

This movie shows Halliburton and KBR deliberately not repairing items in order to charge the government for purchasing new items. This is because of how the contract with the government is structured. It is “cost-plus,” and therefore, Halliburton and KBR have every incentive to increase the cost, as their profits increase in a linear fashion. Secondly, neither Halliburton nor KBR appear to have any business ethics, and therefore, they are doing what they can to increase the costs as much as possible. There are many examples of this, but one that really resonates is the fact that Halliburton will have semi-tractor trucks that break down on the side of the road in Iraq because they either do not change the oil, or check the tires, or even order or stock spare tires. When this happens, Halliburton simply sets fire to the truck, destroying them (so the insurgents can’t use it.) They then charge the government for a new truck, plus their cost-plus margin. They are motivated to not repair even the most expensive items because they make more money this way.

That Halliburton is simply destroying large capital equipment items is amazing, but it is supported by multiple sources. Another form of fraud is related to how equipment is leased, but that gets into a divergent area of malfeasance, and I want to keep this article focused on service topics.

Service Parts and Maintenance: Making the Effort in Service

Organizations and service parts management are in a poor state in the US. The official explanation for this is the philosophy of neglect. The standard The line of reasoning goes something like this:

“Companies want to improve in service parts planning because its good for their customers, the only issue is an issue of education.”

For some time, we personally believed this. However, the Halliburton example demonstrates this is not always the case, and not the only explanation. Other examples of service incapability are stretching the credibility of the lack of education argument.

The Math of Destruction

If Halliburton can charge the government $90,000 + its cost-plus contract for a new truck, they would rather do that then charge the government for a new tire plus the margin. When will this change? No time soon. The Pentagon is now highly dependent upon Halliburton and KBR for all types of essential functions. Secondly, Halliburton continues to contribute mighty to the political process and have hired a number of influential ex-Pentagon officials, that mean Halliburton will continue to get contracts into the foreseeable future no matter what they do and how much fraud they commit, they have a blank check to rip of the government.

Incentives

This is an example of two companies that operate in this manner. However, there are more. The assumption that every company cares about service parts needs to questioned in light of their institutional incentives. If a company can make more forcing a customer to buy a new product, they may prefer this over servicing an old item. Automotive repair shops are known to replace parts that are not necessary to replace. If service management is to be understood then its underlying assumptions must be questioned. It also helps determine what companies and areas to focus upon. For instance, if I were a consulting or service software company I would not bother offering consulting or software services to Halliburton in Iraq. Lets just say, they prefer to buy new….or in fact for the taxpayer to buy new. The whole movie may be seen here. It’s a few years old now, but not much has changed, so it is still quite valid.

http://video.google.com/videoplay?docid=-6621486727392146155

References

http://www.publicintegrity.org/projects/entry/297/bio.aspx

Accenture Writes a Childlike Paper on Service Management


Everyone knows that Accenture hires inexperiences resources, but who is actually writing Accenture’s white papers?

Articles can be motivated by inspiration, or frustration. Neither motivation is more or less valid than the other. This post is definitely motivated by the later. I thought I might learn something by reading a white paper on service management that was produced by Accenture back in 2003. Guess again. Nine pages of content-free PDF later, and what felt like the equivalent of a literary Diet Pepsi, we learned the following:

  1. Accenture is focused on service management
  2. Saturn is focused on service parts
  3. There are software companies that focus on service parts
  4. Accenture has a nice graphics department

Any Information in That White Paper Partner?

Is there an interest in actually communicating any information in white papers or are they purely promotional items to Accenture? This phenomena is not restricted to Accenture, there is simply far too much promotional literature that is disguised as white papers. This is one of the reasons why the “research” departments at the large consulting companies don’t produce very much of value. Other reasons are that these departments don’t employ people with an understanding of research, but most importantly, these firms lack integrity, and the research departments are really just cover operations for marketing and business development. No paper is written, and no effort is undertaken at large consulting companies without the concept of a direct payoff in the marketplace. As a result, many white papers simply designed to hook the reader into contacting the consulting firm.

The promotional white paper format goes something like this:

  1. Come up with white paper title
  2. Create a beautiful cover page
  3. List two partners on the second page
  4. Come up with a few examples of companies that are doing something similar to what the white paper is discussing
  5. Talk about how technology is important
  6. Put a few graphics in the white paper, the simple the better (three circles is apparently white paper nirvana)
  7. List the obligatory 30% improvement in whatever (30% seems to be the magic number — all improvements return 30%)
  8. List contact details

Material for Retarded Executives?

The quality of many of  these papers provide a glimpse into how simple-minded are executives that assign their names to these papers? For instance, what we learned from Accenture’s white paper is that Accenture either knows extremely little about service parts, or did not leverage any of its external expertise on the topic. (In a white paper on inventory optimization, I learned that Booz Allen Hamilton does not actually understand what the term means.) If I were an executive I would not be overly interested in having Accenture come and visit my service organization, since a quality white paper on the topic is apparently beyond them.

Sell Sell Sell…

Everyone wants to sell business, but the implied agreement is that white papers are actually going to contain information that could be valuable to the reader. If white papers continue to be so promotional, fewer people will read them. For those consulting companies looking to learn how to write a white paper, check out the Ciber website and see how its done. (BTW, we have no affiliation with Ciber, we just like their documentation.) Here is Accenture’s promotional brochure…err, we mean white paper. http://www.accenture.com/NR/rdonlyres/6BBEC529-3EE0-491F-B6BF-A19F2750E6EB/0/profit_after_sales.pdf

You could spend time reading it, but what is the point?


How Dell Shows Parts Connections Online

Dell’s Website and Intel Linkage

Something we found interesting while writing an article on assembly to order in SAP SCM and Dell.

http://www.scmfocus.com/sapplanning/2009/07/04/assemble-to-order-and-dell-and-apple/

This relates to how websites from different companies can be used to interoperate with each other to add functionality for the consumer and maintainability for the involved sites. We were on the Dell website, when we noticed they have a link to the right that states:

“Compare processors to find what’s the best for you.”

Here is the site, notice the orange circle to the right under livechat.

Dell Intel 1

Where the Link Goes

What we found interesting about this was that the link takes you to Intel’s site, where an explanation is laid out for the consumer between the different microprocessors Intel offers in Dell models.

Intel

Who Benefits?

What is even more interesting about this is how Dell benefits. First, they provide valuable information to their consumers. Second, they no longer have to maintain information on their own site about a product that they do not make. We could see links like this for all the components. What this does is demonstrate and make transparent the contribution of suppliers to the end manufactured product.

Extending the Concept to Service Management

This concept can be extended to service parts management. For instance, if a hard drive needs to be repaired, or a microprocessor needs to be switched out, it is the supplier, not the assembly firm (in this case Dell) that has the intellectual property and knowledge of the components. Too often the main brand that performs final assembly has attempted to both present the concept that they “manufactured” the entire item, and that they were the specialists in servicing sub-components that they did not manufacturer. The web provides the ability to show the interconnections with suppliers that made the sub-components and to integrate product and service information in a way that has not been done before. Manuals in the future would be both on-line and integrated. Thus the overall guide to say…the Dell Inspiron 14 could be partially on Dell’s website, but then integrated with Intel’s and Western Digital’s and Corsair’s (etc..) websites. This is all accomplished through linking. Furthermore, each supplier only need write the manual and guide for its components once, and this can be linked to by Apple, Dell, and any other manufacturer that uses that component in their products. This both reduces the costs of maintaining this information, and improves its quality.

Service Labels for Repair Time Transparency

nutrition-label.gif
Government mandated nutrition labels were critical to improving the transparency of information as to what is in food. We are proposing a similar level of transparency for serviceable items.

A Common Sense Proposal

After spending some time researching the topic of service-ability of parts, I learned that items are in more cases than not becoming less serviceable, and that most companies are hiding their reliability information (See these posts for background information)…

http://www.scmfocus.com/servicepartsplanning/2009/06/22/public-mtbf-statistics-for-hard-drives/

http://www.scmfocus.com/servicepartsplanning/2009/06/16/items-becoming-less-serviceable/

Clearly what is happening is many companies are not placing sufficient emphasis on serviceability. Other issues such as the marketability and consumer design priorities are increasingly taking precedence in design decisions. Furthermore, without some increase in transparency, this misallocation of resources and continuation of manufacturing items with little concern for service-ability will continue. Interestingly, in the environmental discussion, what is more often that not left out is how service-able products are. More serviceable products means longer product lifespans, less energy spend in making and transporting new products to stores and customers, and less space taken up in landfills.

Because of this I am proposing a labeling system for serviceable products. This label would state the following:

  1. The amount of time to initially setup an item
  2. The amount of time required to service an item through the item’s lifespan
  3. The total estimated time = item 1 + item 2 above

This could be printed as a large number with an identify-able label.This could be placed on all product packaging for items that require assembly or service. This label would not be on all products, but some likely candidates would be the following:

  • Computers and sub-components
  • Automotive Parts
  • Appliances
  • Housing items such as lights fans, furniture
  • Industrial products

How the Estimates Would be Generated

The estimation of the time required would come from a government testing body, this would be very similar to Underwriters Labratories (electric items come with a UL sticked in the US, and can not be sold without testing for safety). Testing would be performed by using laypeople — not experts in maintenance, to assemble and repair items. Sufficient quantity of people would be necessary to ensure that the times developed had statistical relevancy. The testers would only be provided with the manuals and instructional materials that came with the product, thus the test could also test the manufacturer’s instructional material.

What Would the Label Look Like

The label would be very simple. It should be large and easily recognizable and only needs to provide a three numbers. Here is a mockup.

ServiceLabel.jpg
The Industry Response

Business would fight this initiative as being too expensive and invasive. However, there is nothing new here. Business has fought every single initiative that has improved consumer health and safety. Areas they have fought in the past include:

  • Safety belts
  • Air bags
  • Food labeling
  • Cigarette warnings
  • Drug testing

At the time these concepts were deemed by industry as unnecessary and onerous, however, now they are simply part of how we live. Who can now imagine a world without drug testing or seat belts? Progress is made by deciding what type of system is desirable within the larger context, and then pushing for it.

Where Will The Money Come From?

There is plenty of money is the US to do this. There are trillions of dollars to give to corrupt banks, so there is plenty of money for a small program like this. We have spent around a hundred billion to develop a military fighter jet that is so delicate and specialized, it can not even be used by the military in combat (the F-22), and is considered completely unnecessary by independent military experts. So there is certainly plenty of money to setup a lab to perform laboratory testing for service and maintenance. The expense of doing this would not be all that onerous. Products could be tested quickly, and would only have to be tested when a new product comes out or a change is made to an existing product by the manufacturer. If not every item could be tested, the most widely sold items could be tested, resulting in the highest common good per dollar spent.

How Would This Change Things?

The result would be a significant change in how companies build their products which would make them more durable, and easier to service. Right now companies are banking on the fact that consumers will never know the long term service time and costs of items. Therefore, new product development produces items that have great packaging, compete well on price, but have very little invested in them in terms of ease of assembly, maintenance and service. By placing the Service Label right on product packaging, and on product website, companies will no longer be able to ignore this issue, and consumers will be able to make informed decisions. It will punish companies that release poorly designed and difficult to service items onto the marketplace.

Service to Business

While this would be opposed by many OEMs and their suppliers, not every business would oppose this. Service organizations of business would be in favor of this government testing center as it would allow them to know the lifelong service effort of different items that they buy and maintain. Thus the government testing center would offer a service not only to consumers, but to businesses also.