Study On Service Parts Inventory Management Of Home Appliances

Service parts are unacquainted for most companies in China. Service parts were appearing with the blocking of product. Many companies have to store spare-parts to provide after-sale service, products which have quality problems can reuse after replace defective spare-parts. This is service parts in this paper.In the 21st century, the competition between companies has changed, now after-sale service has become the very important competitive means. For many home appliances suppliers, the most important tache of after-sale service is the repair service, namely to replace and repair the defective parts. The response time and the deliver speed of service parts often decide the after-sale service lever and customer satisfaction, repair service has influenced the competition greatly. Besides, the competition between companies becomes more and more severity, many home appliances suppliers have to reduce the price, the profit is fall too, so many companies began turn their main profit points form product to after-sale service. After-sale service has become one of the main profit centers. For example, both the sale of service parts and the repair of parts can create earnings for companies.Because the importance of service parts, many companies began attach importance to it. But compare with the product inventory, service parts inventory have the inherent characteristics, and there have stated difficulties to manage the parts inventory. For many home appliances suppliers, the coexistence of high inventory cost and low service level is a very familiar problem. So how to achieve the highest parts meet rate and service level, in the meantime through effective inventory management and control, maintain the lowest inventory level is a very difficult problem for most of the home appliances suppliers.This paper first introduces previous study in this field and the characteristics of service parts inventory. After presents the problems of service parts inventory which domestic home appliances suppliers are facing now, this paper analyses the classification method, demand forecasting and order model of service parts inventory. Particular, this paper organizes its chapters as follows: 1. The research backgroundOne hand, after-sale service lever has become one of the most important factors which have greatly influence the customer satisfaction and competitions which between companies. Another hand, after-sale service has become one main profit point, and repair service is the key tache of after-sale service. But in China, now many home appliances suppliers have to face the question that high inventory cost and low service level are coexistence. So it's necessary to discuss service parts inventory.2. Literature reviewsThis paper completely reviews and comments the previous study concerning service parts inventory including the classification, inventory control of spare-parts. Generally speaking, foreigners have made deep study about service parts inventory, but domestic studies about service parts inventory still rest on the theory-study stage, only a few studies discuss the classification of service spare-parts. This chapter also demonstrates weakness of previous studies and presents directions for future research.3. Summarizes of Service pars inventory managementService parts have inherent characteristics that different from manufactured goods, and because of these characteristics it's hard to control service parts inventory level. This paper first summarizes the characteristics of service parts, and then introduces the service parts inventory operation mode of domestic home appliances suppliers. At last this paper discusses the problems of service parts inventory management which many home appliances suppliers in China are facing now.4. Service parts'classificationThis paper uses ABC classification, demand-based ABC classification, two-phase classification and other classification to classify service parts. The traditional ABC classification has some limitations, so this paper comes up with demand-based ABC classification to perfect ABC classification. Besides, this paper puts forward two-phase classification which bases on service spare-parts'importance, value and demand, and this paper suggests that different service spare-parts category should take different stock policy.5. Service parts'demand forecasting The main factors which influence the demand of service parts are product's use-time, install base, seasonal factors and so on. Different method is applicable to different situations. General methods of demand forecasting are malfunction rate, but Poisson distribution is better than malfunction rate to forecast the demand of service parts. Weighted moving average is applicable to forecast service parts which are needed low. Besides, this paper also use average standard deviation based on filtered data to forecast service parts'demand. Every method has its fault, so home appliances suppliers should take different method to forecast service parts'demand.6. Service parts'inventory controlThe safety stock is a sort of extra holding stock as a buffer, which supplements the excess demand during the lead time if the real demand increases or the real lead time is postponed, but to a certain extent, the inventory cost increases with safe stock's increase. Based on safety stock, this paper discusses Fixed-Order Quantity Model and Fixed-Time Period Model. For Fixed-Order Quantity Model, this paper calculates the re-order point when demand and lead time change. For Fixed-Time Period Model, this paper calculates the re-order amount under the same circumstances. At last, this paper comes up with some suggestions about service parts for domestic home appliances suppliers.In conclusion, the major arguments and research results are summarized and concluded. The limitation of this research and future research direction are discussed.This paper attempts to makes some breakthrough in the following aspects:1. The theme of this paper. Service parts inventory is a new research field in logistics and after-sale service. On the one hand, academic studies are still immature and left some problems need to be solved. On the other hand, service parts have inherent characteristics which are different from manufactured goods, and domestic home appliances suppliers'management on service parts inventory is still faultiness. Therefore, the theme we study is of great significance in both theoretical and practical.2. Research method and mind. This paper uses multiple research methods including quantitative analysis, normative research to illustrate service parts inventory management. Especially, this paper makes some breakthrough in service parts'classification, demand forecasting and inventory control. For example, for service parts'classification, this paper puts forward demand-based ABC classification and two-phase classification in a creative way.