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Order fulfillment of spare parts during the end-of-life phase

Leijnse, N. (2020) Order fulfillment of spare parts during the end-of-life phase.

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Abstract:In the past decades, the rate of technological innovation has increased significantly. Additionally, customer preferences are continuously changing nowadays. As a consequence, product life cycles are shorter and making end-of-life inventory decisions to ensure spare part availability during the end-oflife phase has become more critical. In this research different solutions for the end-of-life phase are analyzed in order to determine how order fulfillment of spare parts in the end-of-life phase can be improved. A case study on this topic has been done at Company A. Current situation Currently, the company uses the last time buy method to fulfill all the expected demand during the end-of-life phase. For some of the parts, the end-of-life phase already starts two years after start-ofsales. This means that the company keeps many spare parts on stock for a long time period. The company does not have a standard protocol in case the last time buy quantity turns out to be too low to fulfill all spare part requests during the end-of-life phase. Instead, they solve shortage problems on a case by case basis by searching for alternative materials or if this is not possible, they buy back the original product at a depreciated price. However, it happens more often that the ordered last time buy quantity was too large than too small. As a result, the company has a lot of obsolete stock, namely 1.8 million euros of the total spare part stock value that equals 6.5 million euros is regarded as obsolete. Besides that, shortages are expected for 410 SKUs out of the 1745 SKUs that are in the EOL phase. There is clearly a need for a standardized protocol for order fulfillment during the end-of-life phase. Research objective and scope The objective of this research is formulated as follows: “Developing a suitable spare parts management process for the end-of-life phase in order to improve order fulfillment of Company A Engineered Parts”
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:31 mathematics, 58 process technology
Programme:Industrial Engineering and Management MSc (60029)
Link to this item:http://purl.utwente.nl/essays/80698
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