Original Date: 04/20/1998
Revision Date: 01/18/2007
Best Practice : Spares, Repairs, and Support
Prior to 1991, ITT Aerospace/Communications Division’s (A/CD’s) Spares and Repairs Support for its military radio program received little interest or attention from either the customer or the company. This attitude was due partly to the excellent reliability of the product as well as the shortcomings of the acquisition system that handled spares and repairs. From ITT A/CD’s perspective, Spares and Repairs Support only achieved about $1 to $4 million in annual revenue, and was not considered a high priority compared to production schedule deadlines for operational units. This outlook was reflected by a low (50% to 60%) on-time delivery performance for spares and repairs; the absence of a management system for spares order definition, tracking, and prioritizing; and the lack of a formal process or single point of contact for fielding, directing, and responding to inquiries. Customers with problems were essentially handed off and passed from department to department without getting satisfactory resolution. Excessive internal time and costs were being incurred to develop price and repair cost estimates because of inadequate and inaccessible cost data for spares, repairs, and integration support.
By 1991, strong customer dissatisfaction was becoming apparent, and management became devoted to resolving the situation. Improving customer satisfaction was the primary goal, and the company assigned this task to the Integrated Logistics Support (ILS) department. The ILS team established objectives which included improving delivery performance; providing a focal point for screening and processing inquiries; decreasing response time to customer inquiries; lowering bid costs; developing a standard cost database for spares and repairs support; reducing spares production processing time; and capturing sales of production surplus.
To achieve these results, ITT A/CD set up a dedicated organization. First, a Spares/Repairs Order Processing Core team was formed using representatives from the Logistics, Manufacturing, and Contracts departments, and colocated with the manufacturing operations in the production facility. Next, the company installed a logistics order tracking database for spares, repairs, and support. Spares and repairs inquiries are now routed to the newly established Logistic Customer Response Center, where a logistics customer relations coordinator organizes and prioritizes the responses. In addition, all spares, repairs, and integration support proposals are processed by logistics program management and the manager of customer relations for approval and transmission to the customer.
As a result of these improvements, ITT A/CD now has a dedicated logistics spares order processing and tracking organization which significantly improved customer satisfaction, and reduced the manufacturing spares order release and processing time. Since 1991, the company’s spares on-time delivery performance has increased from 50% to 99%, while its bid and proposal costs for spares have dropped by 25%. ITT A/CD also reduced its customer inquiry time from an average of 48 hours to less than 24 hours. The growth in order processing capability and the quick customer response time has increased the company’s sales revenue in Spares, Repairs, and Support from $4 million to nearly $25 million.
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