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On a method to improve your service BOMs within spare parts management

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  • Stip, J.
  • Van Houtum, G.J.

Abstract

For advanced capital goods with high system availability requirements, it is common that all customers have service contracts with the Original Equipment Manufacturer (OEM). These service contracts include service level agreements on spare parts supply. The OEM operates a service network to support these logistic contracts. To determine spare parts stock levels the OEM needs to forecast spare parts demand. An important input for this forecast is the service Bill Of Material (BOM) per installed machine in the field, which specifies the applicable spare parts for a machine, and is usually derived from the machine configuration. Because of a growing installed base, increasing machine complexity, and an increasing number of machine variants, companies face a challenge in defining and maintaining machine configurations, which is why the service BOM is not always in line with the actual installed machine. An incorrect service BOM results in either a too low or a too high forecast for spare parts demand, and will result in under- or overstock.

Suggested Citation

  • Stip, J. & Van Houtum, G.J., 2020. "On a method to improve your service BOMs within spare parts management," International Journal of Production Economics, Elsevier, vol. 221(C).
    • Handle: RePEc:eee:proeco:v:221:y:2020:i:c:s0925527319302762
    DOI: 10.1016/j.ijpe.2019.08.001
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    References listed on IDEAS

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    1. Dekker, Rommert & Pinçe, Çerağ & Zuidwijk, Rob & Jalil, Muhammad Naiman, 2013. "On the use of installed base information for spare parts logistics: A review of ideas and industry practice," International Journal of Production Economics, Elsevier, vol. 143(2), pages 536-545.
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