Advanced Exchange: The Most Efficient Part Repair Strategy?
The total time a part spends being repaired is known as the “repair cycle time“. In today’s fast paced environment, the repair cycle time can have a significant impact on production, and the bottom line. When production equipment goes down, you need to have the processes in place to get your equipment back up and running quickly. If new parts are not readily available, then your part repair strategy will play a significant part in limiting downtime. Part repair strategy can vary from company to company, but can be grouped into four general approaches:
1. In House Repair
In this part repair strategy, in house technicians can complete simple repairs faster and with less expense. However, complex parts may require additional technical expertise and more sophisticated diagnostic equipment to locate the fault and complete the repair. It can be expensive to retain the technical talent and complex analysis equipment if it is rarely used.
2. 3rd party repair
In this part repair strategy the defective parts are sent to a 3rd party for repair. Again, this requires the 3rd party repair company to have the talent, equipment and spare components to repair the part.
In this part repair strategy the defective part is sent to the manufacturer for repair. When the repair supplier receives the defective parts, previously repaired parts are shipped from the repair supplier’s stock to the customer. The repair supplier can repair the defective part and use it to replenish the buffer inventory used to support the exchange program. This strategy eliminates the lead-time associated with repairing the item.
4. Advance Exchange
Advance exchange programs are becoming quite popular in the technology market. Ideally suited for non-critical business applications where a next day replacement is acceptable, these programs provide the end user with a next day replacement part for malfunctioning equipment before the damaged part is returned. When the supplier receives the purchase order, refurbished or substituted parts are shipped immediately to the customer against the purchase order. After the replacement is received and installed, the broken unit is then returned to a centralized repair center, where it will be repaired and refurbished. The repaired part will be used to replenish the buffer inventory used to support the advance exchange program.
Benefits of advanced exchange programs:
- Eliminates lead times associated with shipping the defective parts to the repair supplier and repairing the parts.
- Offers a low cost way to minimize the risk of downtime.
- Companies can reduce the amount of capital tied up in on-site replacement inventory.
- The manufacturer owns the repair and performs root cause analysis on the defective part. Key learnings or improvements can be fed back into new parts design.
- Single-source supplier simplifies ordering, expediting, service, account management and warranties.
- Maintaining a single-source supplier over the service life of equipment ensures increased equipment reliability and performance.
- Customers can re-use the shipping container and packaging material that come with the advance exchange unit to return the defective part. In some cases, an already-completed return freight air bill is included for ease of return.
- For manufacturers, faster turnaround with easy and reliable service leads to increased customer satisfaction, return business, and referrals.
Generally, advanced exchange programs offer remanufactured & rebuilt products with the same strict quality and specification standards as for new products. With advance exchange, companies no longer need to invest in and maintain their own spare parts inventory, or spend time tracking and managing devices sent in for offsite repair. They also don’t need to maintain the technical talent required to troubleshoot component level repairs. This decrease in overall costs leads to an increase in the bottom line.