Insights on spare parts challenges and how SAP SPM might be the answer
Today’s world of spare parts management has its own specific characteristics, resulting in particular
business challenges such as:
Some will recognize the limitations that go hand in hand with international trade agreements like Incoterms 2010. Being bound to transfer of title, transfer of risk and revenue recognition, creating a legal invoice without performing a Goods Issue (GI) is impossible with the processes and system in place.
Moreover, some of your orders are being withheld from picking and loading activities until the necessary certifications have been validated by local authorities. Keeping sight of the material eligible for this ‘certified’ shipment is therefore one of the key challenges within your logistics operations today.
Others will face the difficulties and complexity of reverse logistics. How do you seamlessly link the returns with the original order and invoice? How do you prepare the warehouse to process the returns and communicate the results effectively? It is key in the logistics industry to find a way to fully align the involved internal parties. This will allow you to get to a transparent and manageable reverse logistics process which in turn will contribute to overall client satisfaction.
To address these challenges, Deloitte implemented an integrated Extended Warehouse Management (EWM) –Customer Relationship Management (CRM) solution. Even though complex, they are common in the spare parts industry, into an easy-to-maintain and standard process.
This article describes a twofold solution:
- The EWM solution includes the Invoice Before Goods Issue (IBGI) functionality, combined with a Temporary Staging solution which provides a remedy to the need of compliance to the certifications or other documentary credit documents.
- The Claims and Returns functionality in CRM gives your customer (can be B2B with dealers or B2C)
transparency and all necessary information to complete the return of surplus material or broken