Q: What Options Exist in SAP to implement Spare Parts Supply Chain ‘planning’ (planning and replenishment) solution?
A: Perhaps a combination of IBP, IoT, Predictive Maintenance (PMS) and MRP/MM can be used to build a working solution. or if you are still using APO SPP, and it works well.
The trouble with Spare parts demand is, it is not predictable. Not all of them. So, you need a solution that captures all ‘origin’ and reasons of demand. (And hence the base to decide right stocking policies. In stock for service levels expected)
– Authorized dealers (partly distribution demand)
– Multi-brand and unauthorized dealers
– Spares Retailers
– Aftermarket OEM
– E-Commerce
– Vehicle Off road – incl. independent garages
– Roadside Assistance
– Express Orders
– Defense Orders
– Fleet Operators
– Exports
– Used Vehicle Dealers
– Recalls
– IoT based demand (telematics)
– Upgrades, Customization and Refurbishment
– Insurance Companies
The problem is, in most SAP implementations, these reason codes are not differentiated enough to serve the future base for any prediction you wish to do. So, create sales orders and replenishment orders with sufficient reason codes. Annotate the demand.
Secondly the fact that some spare parts need time bound and miles bound replacement is a reason enough for demand events. Network demand. Whoever fulfills it.
Third there are known failure rates of certain parts. If you know how many Automobiles you sold are on the road, you can probably predict demand for some parts like fuel injection pumps, steering columns etc.
Fourth you are legally bound to keep certain spares in stock. Up to a certain number of years of vehicle sales. Most do not care.
Q: What about the Math and Models of Prediction?
A: Probability Based Models – Poisson and Bayesian for low frequency demand, Clustering K means for predicting at category level (similar spares), Regression models (if you can build one), Croston Model (a variation of exponential smoothing) for irregular demand, Monte Carlo Simulation (demand based on random variables).
Q: Do SAP Consultants know so much math?
A: 99.5% do not. Nor do I. So, you need to hire independent experts who specialize in building such models.
Q: Where are they found and how much do they charge?
A: There are several independent consulting firms and individuals who only specialize in Spare Parts demand models. They may charge upwards of 1000$/day. i.e. if they really know their jobs and come with sufficient academic preparation to appreciate these concepts.
