Inventory Control Policy of Service Parts under the Background of Service-Embedded Manufacturing

Abstract

This paper studied service parts inventory control policy of a large equipment manufacturer which is on the transformation to service-embedded manufacturing. In order to get win-win solution for both supplier and client, a new cooperation pattern of service parts management was proposed. And a service parts model of multi-echelon inventory system in the after-sale service market was build based on the analysis of service parts demand under servitizaion. Based on this model, many issues of service parts inventory management were studied. Finally the inventory control parameters were exploited which aims at the maximum profit of service parts inventory. With this method, the reduced inventory of suppliers and improved service level could be calculated quantitatively, which could work as a reference to set price of extensional services. Experiments showed the method proposed in this paper is valid for service-embedded manufacturing firms.