Keep Moving With a Parts Strategy
by Doug Zoerb
October 27, 2011
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The Doosan Infracore parts distribution center near Atlanta stocks nearly 70,000 items and processes about 1,000 line items daily.
Developing a plan for your machines’ components can improve productivity.
For a contractor, a sidelined machine can spell disaster.
When a machine goes down, time and money can be lost. Waiting for a part can hold up the progress on the jobsite, and emergency orders can be costly. That’s why understanding the parts-ordering process and how parts get from the manufacturer to your dealer to you is critical to managing your equipment fleet. Additionally, taking a proactive approach to working with your dealer on parts ordering and stocking can help maximize machine uptime.
So what can you expect when you need to order a part? In recent years, the way manufacturers distribute parts has changed drastically. Advanced logistics and new computer technologies have allowed manufacturers to automate and streamline their parts operations, improve their response times and increase fill rates on the parts dealers need to keep your equipment good to go.
Take the Doosan Infracore parts distribution center near Atlanta, for example. A decade ago, the facility, which stocks nearly 70,000 items ranging from grease zerks to excavator booms and processes about 1,000 line items daily, operated much differently. Dealers placed a majority of their orders over the phone, and Doosan parts technicians entered the orders manually. Today, dealers submit nearly all their orders online using the company’s dealer portal, saving time and improving efficiency.
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At Doosan, all orders are ranked based on priority, with the highest priority going to orders for machine-down situations and same-day shipping.
This dealer portal links to an interactive online parts book that dealers can use to look up part numbers and add them to their purchase orders, Stone says. It also allows the dealer to view pricing and availability on each item prior to placing the order.
While the dealer portal has decreased the need for technicians to manually take orders over the phone, parts technicians are still available in a call center to answer dealer questions. The center also has an order express desk that dealers can use to manually place orders of five items or less.
“The order express desk is offered as a service to our dealers,” Stone says. “The only requirements are that the dealer must have a purchase order number available as well as the ship-to information and all the part numbers.”
He says many dealers use this service at the end of the day when they need to submit a last minute order prior to the cutoff time for placing orders.
Pick and Pack
At the Doosan facility, once an order is received, it is processed through a computerized planning and stock allocation system. Parts in stock are allocated to an order for a one-hour time period. Orders are then downloaded to the shipping supervisor in the parts distribution center, who assigns them to an order picker based on availability and workload.
“Each order picker has a scanner equipped with a small screen where orders appear with the bin or rack location for each item,” says Kevin Couch, operations manager in the parts distribution center. “As the order pickers fill the orders, they scan bar codes on the item or the rack. Once scanned, items are automatically removed from stock and the dealer portal is updated to show current stock availability.”
Couch says the order is then packed, shipped and assigned a tracking number that the dealer can access through the dealer portal. Most orders ship via one of the three major package delivery services, although larger parts, like excavator booms, may ship on a dedicated truck. Other items may have to ship via air freight depending on the customer’s need.
To better serve dealers and their customers, Stone says all orders are ranked based on priority, whether it’s a typical stock order for the dealer to have on hand or an emergency order that is needed in a rush. The highest priority goes to orders designated MDS, or machine-down situation, and SDS, or same-day shipping. An MDS order indicates a machine problem that is not critical enough to require same day shipping. SDS is a machine-down situation that is critical enough to require guaranteed same-day shipment.
Stone says Doosan also provides a 48-hour parts guarantee on machine-debilitating parts for current production machines and one generation previous to that. To generate a 48-hour parts order, Stone says, the customer must first identify the need to the dealer, and the dealer must indicate a 48-hour parts order when the order is placed. Normal wear parts, such as undercarriage components, are not qualified parts for the 48-hour parts guarantee.
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Typically, the last two hours of the day are the busiest for parts distribution centers.
“We do whatever is needed to get the machine going,” Stone says. “If the cost is significantly different from what was originally ordered, we are authorized to offer a significant discount in order to lessen the impact on the dealer and/or end-user. But if we don’t have or can’t locate the part and, for example, a complete assembly is not available, we give the customer the use of another machine. Starting the day after the 48-hour parts guarantee period expires, we’ll pay for the rental of another machine until such time as the part is signed for.”
Plan Ahead
While manufacturers and dealers can provide a safety net of support, contractors should develop strategies to help avoid machine-down situations and same-day shipment of parts, both of which can be very costly. Here are some tips:
• When you acquire a new piece of equipment, ask the dealer if they have on hand the manufacturer’s recommended parts stocking list for that model. This list should include items such as belts, hoses, filters, critical lights, electrical components, sensors, seal kits and cylinders, among others.
• If you perform some or all of your own machine maintenance, consider stocking frequently used service parts. The key is to know your machine and know its maintenance intervals. Prepare yourself by having stock on hand. This is also true if you are working far away from either your home base or your dealer, or you are working in a remote, hard-to-reach area.
• If you have a machine problem, try to identify your parts needs early in the day. The last two hours of the day are generally the busiest for most manufacturers’ parts distribution centers. The dealer has a better chance of having the part you need shipped the same day if you can diagnose the problem before noon, for example.
• Although breakdowns can happen any time, keep in mind that Mondays and Fridays are generally the busiest days of the week for manufacturers’ parts distribution centers.
• You and your dealer should know where the manufacturer’s parts distribution center is located and when their cutoff is each day for emergency or machine down orders. If you are in the Pacific time zone, for example, and the parts distribution center is in the Eastern time zone, the cutoff time for emergency and machine down orders may be in the early or middle part of the afternoon.
• Perform major repairs and maintenance during off-season months. Generally, try to do this work immediately after the construction season ends to avoid the busy spring and summer months at your dealer’s parts counter.
• When talking to your dealer about stocking parts for your machine, keep in mind that the most commonly ordered parts for wheel loaders and excavators are hydraulic components, in addition to normal wear parts like undercarriage components, pins and bushings.
It’s inevitable that at some point, your machines will need service and parts. Having a parts plan in place can help you get the job done quickly and efficiently.
Doug Zoerb
Doug Zoerb is a technical writer with Two Rivers Marketing in Des Moines, Iowa.
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