New Breed Logistics Designs and Operates National Critical Parts Network for Siemens Medical Solutions
Situation
Siemens Medical Solutions is one of the world's largest makers of medical equipment. Its U.S. business wanted to improve the efficiency and reliability of critical parts distribution. Siemens had limited visibility to orders filled from remote locations and no system to track delivery milestones. In addition, unpredictable inventory availability led Siemens field service engineers (FSEs), as a safeguard, to hold commonly used parts as "trunk inventory." After a competitive search, Siemens chose New Breed Logistics to establish and manage a national network to deliver critical service parts within 2-6 hours to more than 1,500 Siemens field service engineers.
Solution
New Breed Logistics analysts examined parts usage and developed an inventory plan that would meet all service level requirements with just 18 distribution points a relatively low number for a rapid-response network of parts depots. The network consists of a central DC and returns processing center in Memphis and several strategically located parts depots. Key elements of the solution include:
Inventory management
- FSE-held inventory is closely monitored to eliminate trunk inventory
- Real-time visibility to inventory to aid in accurate inventory planning
Web-based order management and visibility
- Integration of New Breed Logistics systems to Siemens SAP and carrier systems. Parts available for use immediately upon receipt at DC.
- New Breed Logistics systems provide Siemens the ability to monitor inventory and order status in real time
Carrier selection and management for critical deliveries
- FSEs notified of delivery schedule so they can maximize their daily productivity
- New Breed Logistics proactively monitors carrier delays to trigger corrective action
Returns processing
- Receive, sort, and disposition returns from customers and FSEs
- Every O/B order sent with returns label. FSE notes condition of part (good, defective, repairable) and ships back using pre-printed label
- Parts inspected at returns center and repaired, repackaged, disposed, or sent to Siemens. Appropriate credits processed upon disposition.
Results
- Substantially increased on-time delivery
- Achieved aggressive delivery requirements, while eliminating trunk inventory
- Reduced inventory carrying cost
- Consolidated slow movers to better control obsolescence
- Network-wide visibility to parts for more accurate forecasting
- Increased productivity of field service engineers
