1. 2016
®

2. ®
Breaking the Mold – “The Value of Challenging
your Service Supply Chain Model”
Michael Schuler
CEO - Veterans Alliance Resourcing

3. ®
Introduction to
Veterans Alliance Resourcing
Service Supply Chain Consulting
• Product Returns Management
• Depot Repair
• Parts Supply Management
• Product Remarketing & Value Recovery
• Service Delivery Management
• Product & Parts Logistics
• Warranty Management
No Risk - Fee Structure based on Savings % (qualified accounts)
AService Disabled Veteran Owned SmallBusiness

4. ®
Breaking the Mold – “The Value of Challenging
your Service Supply Chain Model ”
The Million Dollar Coffee Cup

5. ®
Breaking the Mold – “The Value of Challenging
your Service Supply Chain Model ”
Challenging your Service Supply Chain Model
Requires:
 Courage: To Change Perspective
 Knowledge: What is Best-in-Class?
 Gain Insights from Mature Industries &
Companies
 Metrics: Measurements for each Category
 Balance: Risk vs. Reward
 What is Optimal for your Business
 Fortitude: To Execute Change

6. ®
Breaking the Mold – “The Value of Challenging
your Service Supply Chain Model ”
Case Studies
Companies that made Changes
1.Major Retailer – Service Parts Supply
2.Major OEM – Reverse Logistics & Product
Remarketing
3.Major TPA – Service Delivery

7. ®
Breaking the Mold – “The Value of Challenging
your Service Supply Chain Model ”
Service Parts Management Metrics:
•Parts Inventory (SKUs, Quantity & Dollars)
•Parts Inventory Turn Rate: a) by Dollar b) by Quantity
•Forecasting Fill-Rates: Same-Day, 2nd
Day, 5+ Days
•Cost Per Part
•Warranty Recovery: Parts & Labor Reimbursements
•Inventory Accuracy, Variance and Write-Downs
•Return of Core/Upcharge Costs & Recovery
•Cost and Yield Rate on Core Repairs

8. ®
Service Parts Management Metrics:
•Parts Inventory Investment (SKUs & Dollars):
$19M-100K Parts/10K SKUs in stock, $13M at Service
Center plus $6M in Service Vans, $25M Spend per Year
•Parts Inventory Turn Rate: Dollar (1.5) Quantity (1.2)
•Fill-Rates in Days: 1-(64%), 2-(72%), 5+(16%-6,300 Orders)
•Cost Per Part: $288, 100+ Vendors, 550 Parts/Day (400 Bought)
•Warranty Recovery: 33K Parts, $1.5M Labor Annually
•Inventory Accuracy, Variance and Write-Downs Unknown
•Return of Core/Upcharge Costs & Recovery Unknown
•Cost and Yield Rate on Core Repairs Unknown
•First-Time-Fix Rate/TAT - Wrong Part Ordered/Shipped
Case Study #1 – Service Parts Supply
Major Retailer

9. ®
Breaking the Mold – “The Value of Challenging
your Service Supply Chain Model ”
• Staff of 35 handled Parts Purchasing, Depot Repair and
Replacements for the Extended Warranty Lifecycle of PCs
• PC Support Operations were Embedded with other Returns
and Support: Appliances, Tools, Consumer Electronics and
Home & Garden Equipment (Grills and Mowers)
• Retailer brought in Consultants and Put out an RFP
• But a Small Company (not on the original RFP List)
was Awarded the Contract
Case Study #1 – Service Parts Supply

10. ®
Breaking the Mold – “The Value of Challenging
your Service Supply Chain Model ”
Key Strengths of Company Awarded Contract
•Extensive Experience in Performing Component-Level
Repairs on Parts and Sourcing from Secondary Market
•Executive that Previously ran Retailer’s RC and Parts Supply
Center had Joined Parts Suppler a Year Earlier (He was
intimately familiar with both Operations)
•Company Proposed to take over Existing Operations for
Seamless Transition (Personnel and Inventory) by Embedding
at Returns Center
Case Study #1 – Service Parts Supply

11. ®
Case Study #1 – Service Parts Supply
Major Retailer
Service Parts Metrics Before 1 Year 3 Years
Same-Day Fil-Rate 64% 88% 94%
Next-Day Fill-Rate 72% 92% 97%
5 Day Fill-Rate 84% 98% 99.5%
Aging Orders (5 Days+) 6300 70 25
Avg. Cost Per Part $288 $225 $155
Inventory Accuracy Unknown 98.5% 99.3%
Write-Downs $5.5M $1.2M $600K
Return of Core Unknown 60% 96%
Yield Rate on Core Repair N/A 78% 91%

12. ®
Breaking the Mold – “The Value of Challenging
your Service Supply Chain Model ”
• Challenging your Service Supply Chain Model requires
a Change of Perspective
• Establish Metrics for each Category
• Learn what is Best-in-Class
• Decide what is Optimal for your Business

13. ®
Breaking the Mold – “The Value of Challenging
your Service Supply Chain Model ”
• Challenging your Service Supply Chain Model requires
a Change of Perspective
• Establish Metrics for each Category
• Learn what is Best-in-Class
• Decide what is Optimal for your Business

14. ®
Breaking the Mold – “The Value of Challenging
your Service Supply Chain Model ”
• Challenging your Service Supply Chain Model requires
a Change of Perspective
• Establish Metrics for each Category
• Learn what is Best-in-Class
• Decide what is Optimal for your Business

15. ®
Breaking the Mold – “The Value of Challenging
your Service Supply Chain Model ”
• Challenging your Service Supply Chain Model requires
a Change of Perspective
• Establish Metrics for each Category
• Learn what is Best-in-Class
• Decide what is Optimal for your Business