Service Parts Planning (An Overview)

By
Amit Kumar Singh

Service Part Planning

Business Need
Repair service operations need service parts planning systems to ensure that the right parts
are at the right locations, at the right times, and in the right (usable) condition, while being
consistent with inventory budgets and service level targets.
Service parts inventory management differs from product inventory management; hence
the need for functionality designed to handle special service parts situations such as:
reverse flow of potentially repairable parts, combinations of stock-keeping units
(SKUs) and locations, mission-critical parts, and intermittent demand. Also, forecasting for
service part planning doesnt use BOM, forecasting is Item wise.

Supply Chain Modelling

Supply Chain Organizations Modelled by SPP

Based on the example supply chain, service part plans cover the following organizations:
External supplier of new parts (new buy)
External supplier of repair services
Internal Depot Repair
Central spares warehouse
Central defective warehouse, if any

Modelling Repair Supplier Organizations

In the service supply chain, the repair supplier can be managed as a:
Push preposition relationship
In Push relationships, all defectives are prepositioned at the repair supplier site, based on
(monthly or quarterly) contract agreements.
Pull On demand return or repair return relationship
In Pull relationships, the defectives are moved for repair only when a demand occurs at the
replenishing organization.

Service Supply Chain Forecasting Modes

Traditional

Inline

Solution Integration
The Service Parts Planning solution integrates with the following Oracle products:
Oracle Demantra Demand Management (SPF)
Oracle Order Management
Oracle Procurement
Oracle Inventory
Oracle VCP Inventory Optimization optional

Setup Sequence

Source Instance Item Attributes

Items > Organization Item > (T) MPS/MRP Planning
Repair section is important for service part planning.

Repair Program
Repair programs are chosen based upon the lead time that should be accounted for that
particular item.

Different type of lead times for Service part planning are as follows.

Repair Return (Pull)

All three lead-time elements are considered to offset repair purchase orders.
Repair Return with prepositioning (Push)
Because the defectives are already on-hand at the repair organization, only the
repair and the receiving lead-time elements are considered.
Advanced Exchange without prepositioning
Advanced exchange on purchase order approval
Only the receiving lead time is considered, but all the ordering documents are
generated. In this case, planning considers the transfer lead time and the repair lead time to
be zero.
Advanced exchange on defective receipt
Both the transfer and the receiving lead times are considered. All the order
documents are generated. In this case, planning considers the repair lead time to be zero.

Advanced Exchange with Prepositioning

Repaired items are prepositioned and visible to planning. Only the receiving lead
time is considered, but all the relevant documents are generated. In this case, planning
considers the transfer lead time and the repair lead time to be zero.

Repair Yield
This attribute, expressed in percent, represents the proportion of the item quantity sent to
repair that is successfully repaired to specifications for usable parts.
Repair Lead Time
This attribute represents the amount of time that the repair organization requires, in days,
to process a defective part into a usable part. Defined for usable part.
Prepositioning Point
This item attribute check box is used in the Push type of relationship with the repair supplier
to indicate that the item's defectives are physically stored in advance of actual need at the
repair supplier's site.

Defining Organization Type

Field technicians and internal repair depots are both modelled as inventory organizations,
the Organizations form provides an organization type drop down field with values including
None, Field Technician, and Depot Repair. This information helps the collection process
identify and collect the correct data streams for Service Parts Planning.
Advanced Planning Administrator Responsibility
Admin > Instances > Organization

Sub inventories
For the reverse logistics planning, its very important to distinguish usable and defective
Inventory of the same part. In Spares Management, technicians are modeled as external
organizations. These organizations contain separate subinventory locations for defective
and usable parts.
Setting up sub-inventory conditions:
Inventory > Set Up > Organizations > Sub Inventory

Assign Sub inventory to Defective/Usable condition

Field Service Manager Set UpAddresses and Sub inventories

Product Part Relationships

Supersession.
Spares Management uses the inventory item relationship called supersession to capture the
supersession chain. The supersession definition defines global supersession and repair
capability.

These relationships should be modelled in the following way in EBS :

Inventory > Items > Item Relationships

The principle that guides search logic is: the demand must be satisfied locally before using
the supply from other nodes in the supply chain.
When multiple item revisions have demand occurring on the same day, for the same order
type, then the search logic tries to satisfy the demand for a lower revision item prior to
moving to demand for a higher revision item. For example, if the supersession chain is A1 ->
A2 -> A3, and forecast demand for A1, A2, and A3 exist on the same day, then satisfy
demand of A1, then A2, then A3.

Sourcing Rule
Circular Sourcing Rules
To improve customer satisfaction, service supply chains hold inventory at strategic
locations, such as regional warehouses. Due to varying demand, rebalancing inventory
across warehouse locations may become necessary. The key difference between circular
sourcing and normal sourcing is that a circular source participates in the supply chain
replenishment only in case of excess (or surplus) inventory that will not be needed within a
given time fence.

Transfer from Sourcing rules can be made circular.

Return to
You assign the Return to sourcing rule to the global forecast assignment set so that it is
appropriately considered for pushing down zonal demand to the organization-specific
demand. You can specify organizations only for the Return to sourcing rule, hence a user
interface validation has been built into the LOV.
The Return to sourcing rule is also used to transfer the defectives all the way to the repair
organization. Thus, Return to is not used only in the global context, but also in the context of
transferring defectives from organization to organization. Therefore, both the All Org
(global) level and the Org (local) level sourcing rules are supported with the Return to
sourcing type.
This is a destination-instance only form, and can be assigned to the assignment set.

Repair at
Repair at designates the supplier or organization as a repair organization for that part. The
Repair at sourcing rule is valid for both internal and external repair.
For example, consider the following service supply chain:

The Central spares warehouse has Repair at sourcing for both the external repair and the
internal repair depot. The sourcing rule is defined as shown in the following table:

Repair at sourcing applies only in a service supply chain plan. Service supply chain plans do
not use Make at sourcing, and disregard Make at sourcing rule entries from sourcing rules
assigned to a service plan. Similarly ASCP and DRP plans disregard the Repair at sourcing
rule.