For any company that services equipment or provides product support at customer premises, forward stocking locations are the secret to success.
With a forward stocking location (FSL), often in a mini-warehouse, your company can manage field parts inventory in manned, unmanned and site-dedicated stocking locations, in addition to service engineer trunk-stocking locations.
These locations allow service service engineers and sales reps to access inventory close to the customer's operations. Your organization can meet service level agreements faster and with less cost by managing inventory at strategic locations. In metro areas especially, several smaller inventory warehouses across the region reduce driving time to retrieve the parts or product and go to the customer site.
As companies consider using the forward-deployed inventory strategy, one of the critical questions is whether to use a manned or unmanned site. There are pros and cons for both types, which we will discuss here.
Inventory Type (Large Goods vs. Small Parcel)
In the manned vs. unmanned decision, one of the primary first considerations is the type of inventory that will be housed and distributed.
For an unmanned site, smaller, lighter inventory will be a good fit – from parcel size to a larger carton that may require a hand truck to move. The service engineeror rep will be picking up the item by themselves, so it must be easily handled by a single person. The unmanned FSLs are the best option for a dedicated, small footprint site close to the demand points. Service engineers can quickly retrieve the items they need with minimal administrative time devoted to checking inventory.
If you need the capability to stack or receive multiple pallets or manage loads that require material handling equipment, then a manned site will be the best option. A managed FSL may be sited in a traditional warehouse or distribution center staffed and equipped to accept and ship larger items, larger quantities and multiple pallets.
Inventory Turn (Slow vs. Fast)
From an inventory turn standpoint, slower-moving parts are typically carried in a manned FSL. In most cases, expedited shipping with 24-hour delivery is available from a central location to the demand point. In that scenario, the slower moving parts aren't occupying premium space in an unmanned site. The unmanned sites are used for high-demand and faster-moving parts or inventory that see a higher turnover rate. It's worth using the premium space to meet customer expectations. However, the SLAs will dictate which parts are stocked in the unmanned location, so slower-moving parts may be a good fit based on the specific use case.
Inventory Cost (Expensive vs. Affordable)
From the inventory cost perspective, an unmanned FSL will be significantly less expensive on a per-item basis due to the smaller footprint. From a transactional standpoint, the costs will be less because there won't be continuous charges for the inventory.
Charges are higher at a manned site to cover the overhead expenses and the larger footprint, resulting in higher inventory costs. Transactional costs will be higher as well because more items will be handled more often from the more extensive inventory. The per-item costs on a smaller unmanned location will be lower, and there are no transactional costs for pickups by techs. However, there may be costs for re-stocking or courier deliveries.
Footprint (Regional vs. National)
Your customer geography and service expectations will guide the decision for a regional or national footprint, with manned and unmanned possibilities.
A manned FSL in a traditional warehouse will be suitable for a regional service footprint. Your items will be housed in a multi-tenant warehouse, but there's an opportunity for a larger presence within the facility. There may be fewer of these larger locations available, so delivery time could be a factor in meeting SLAs.
Unmanned sites are available at thousands of self-storage and mini-warehouses nationwide. It's more convenient and cost-effective to maintain inventory in specific markets based on customer demand. There's a high degree of flexibility in using a smaller FSL. You can have different types of locations with different kinds of inventory, with a short-term commitment. You can stock up for an upgrade or replacement program or support a product rollout in a succession of markets. These sites can pop up and close down as needed without significant investment.
Manned warehouses are less flexible in terms of national vs. regional footprints. With an unmanned site, your organization has the opportunity to select locations that best suit business needs and those suitable for the field service organization. You can optimize for a balance between where the inventory needs to be based for servicing the demand points and take into consideration where the service engineers live and spend most of their time. There's also month-to-month flexibility to move unmanned locations as needed if the demand points change or the service engineers' locations change.
If you require ancillary services, the manned FSLs will offer that capability. The staff can accommodate unique service requirements or recurring services like kitting or sorting.
In most cases, an unmanned location won't have the ability to accommodate special requests or unique situations consistently. There may be a delay in calling in resources for a specific task, so service delays may occur.
While many manned sites promote 24/7 accessibility, there are usually limits as to what can be done during off-hours. Users often must place orders within a specified time frame and pick them up during business hours. There may be additional charges for after-hours pickup. The facility may not have the availability for a courier or last-mile delivery after hours.
An unmanned site offers the flexibility for service engineers to access product as needed and is open for courier pickups and deliveries. There are fewer constraints to get the parts to the customer promptly. Look for unstaffed storage locations that offer Bluetooth-enabled access so employees can access the site via mobile apps. The site is open every day of the year, and the keys don't get lost. Managers can track who accesses the facility and can monitor employees and manage inventory.
Service Level Quality
SLAs are driving the requirements for field service management organizations. Expectations are tightening from same-day to four or one hour response in some scenarios. Look for a provider that offers whatever it may take to meet the standard. The options may vary by what's available in a particular location. For example, climate control may only be available in a manned facility in a given city. An unmanned facility is often the best option if you need 24x7 access on short notice.
Both types of locations offer some level of inventory monitoring and reporting. The quality will depend on the facility's processes and technology in use. An unmanned facility with continuous RFID product tracking can help reduce errors and inventory write-offs to maximize the value of parts in the stocking locations. The system cuts down or eliminates the need for service engineers to scan stock in or out. In addition to reducing errors, the automated inventory provides greater control and insight. Service engineers appreciate the real-time inventory status so they know the critical service parts are available.
Chain of custody tracking is critical for regulated industries such as pharmaceuticals and medical devices to ensure complete accountability.
Benefits of Unmanned FSLs
The best option for your service parts logistics depends on many of the factors discussed above. But unless your customer base requires parts and equipment that simply requires a manned location for material handling or climate control, for example, an unmanned facility provides a high level of flexibility in a cost-effective package. There's less driving and administrative time for techs, which makes it easier to meet SLAs and keep the techs focused on the tasks at hand.
Companies that operate asset-intensive field service operations and maintain a high investment in spare parts should consider adding unmanned field service locations to their logistics plan.
To find out more about improving the efficiency and quality of your field service organization, contact Warehouse Anywhere today.