Uparts inventory is too often not given a spare thought by senior management teams. They're likely to pay attention to this issue only if an important customer threatens to take its business elsewhere, or a significant inventory write-off occurs. Yet, effective management of spare (service) parts impacts the margin contribution coming from after-sales services (30 percent of a typical manufacturing company's total revenue, and upwards of 40 percent of its profit). This has become an important business issue because after-sales service revenue has been increasing as a percent of total revenue in recent years given product price erosion, customers keeping equipment for longer periods of time, and the extension of product.
展开▼
