BearingPoint Survey: Manufacturers Still Struggle to Meet Customer Demand

Manufacturers still need to do a better job anticipating the number of spare parts needed based on customer demand, according to a new survey conducted by BearingPoint, Inc. (NYSE:BE), one of the worlds largest business consulting and systems integration firms and APICSThe Educational Society for Resource Management, a professional society providing certification, education, and resources in inventory and supply chain management.


To do this, the survey suggests a stronger focus on service-level agreements, which can help companies monitor inventory levels more efficiently as well as anticipate demand on spare parts based on data collected from the customer.


The survey results indicate that the spare parts planning process has not kept pace with customer demand, said Joe Parente, a managing director with BearingPoints Manufacturing and Technology Practice.

Companies that have incorporated customer service-level agreements and product performance indicators have improved spare parts planning as well as enhanced their inventory efficiency.


The study surveyed more than 1,000 executives, representing various sectors such as automotive and transportation, chemicals, consumer packaged goods, high tech, and life sciences, with the majority of the respondents in the automotive and transportation industries.

"The more focused a companys key performance indicators are to the customer, the better chance to see improvement in performance, observed Parente.  Companies are retaining and expanding their customer base by offering aftermarket services such as maintenance agreements on products purchased, thus creating a more profitable and loyal customer base. 

The customer is key in todays competitive global marketplace. Throughout the supply chain, manufacturers must know what the customer wants, produce the product to customer demand, and provide exceptional customer service, said 2004 APICS President Arnold Kennedy, CFPIM, CIRM, Jonah. As the survey results indicate, forecasting and inventory management are key drivers to meeting customer demand for aftermarket products.


Other key findings included

  • 43 per cent of those surveyed indicated that demand/forecasting planning was an area within service parts that needed improvement
  • 41 per cent of survey participants stated that maintaining service performance levels was a significant challenge
  • 42 per cent of survey respondents indicated that historical usage had the greatest impact on spare parts planning
  • 43 per cent of respondents said the most important spare parts planning system functions are forecasting and inventory management.

According to Parente, the successful companies have fully integrated mechanisms to monitor performance in all customer-facing business processes, such as spare parts planning.

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