Better Manage Field Service Parts And People

Imagine being six weeks on the job, hired to fix your company’s inadequate field service parts distribution, and facing thousands of customers at an annual user conference. Those customers are not happy, and you’re the person they most want to talk to. That’s what Traci White, director of global field logistics for Avaya Global Services, faced three years ago. “I put my target on and stood there and took it,” she says. “And all I could say was, ‘I can’t help you now, but I am here to fix it.’” Avaya was hemorrhaging money and inventory with the current way its parts were distributed for its U.S. field service force of 1,500. By streamlining its service parts logistics, Avaya was also able to better manage its field service technician operations — both endeavors resulting in reduced real estate throughout the United States, a 30% reduction in inventory, and increased technician productivity.

$4.9 billion Avaya provides and maintains communications networks for enterprises, including 90% of the Fortune 500 companies, and is driving the adoption of converged voice and data networks (i.e. IP Telephony). When White was brought on board, she faced the problem of an inefficient parts distribution system. Avaya had 2,000 locations across the United States to store parts: Avaya regional offices, technicians’ vans, and the locations of Avaya’s 3PL (third party logistics) provider, Choice Logistics. The parts were stocked based on technicians’ orders, often in a reactive manner. If a tech had not had a part for a job the month before, for example, he was oversensitive to needing that part this month. Additionally, Avaya wasn’t stocking the field with parts to match its product suites. “We were getting hit hard by not having parts for new products,” says White. “When we were about to launch a new product, you’d think we’d stock the field with the spare parts to support the new systems. But because we didn’t have any central visibility of the parts, we didn’t. We played a lot of catch-up.”

MEASURING FIELD SERVICE PERFORMANCE IS FIRST STEP

The only way Avaya knew it was inefficient was from the anecdotal “noise” coming from technicians and customers — the company didn’t even have an effective way to measure its parts distribution performance. Measuring field service performance is a vital component of a successful field service organization. It’s the first step toward making a case for automation and moving away from paper processes. And once you’ve spent the tens, even hundreds, of thousands of dollars to automate the technicians, having performance metrics is essential to justifying your case and measuring payback — and then ensuring that service performance continues to be up to par. According to a study by AberdeenGroup, Best Practices In Service Chain Performance Management, “Service organizations are beginning to awaken to the notion that value can be achieved by running service as a profit center and as such, taking a more targeted approach to measuring, monitoring, and thus improving service performance.”

When Avaya measured the effectiveness of its parts distribution, it found that parts were delivered on time only 39% of the time. Avaya applied Six Sigma (defined as a disciplined, data-driven approach and methodology for eliminating defects) to improve the parts distribution and via the process decided to implement a parts management tool.

Following the Six Sigma analysis, Avaya implemented the Servigistics Service Parts Management solution, which is designed to forecast, plan, and optimize a global service parts network. Avaya integrated Servigistics with its SAP system, and the Servigistics program analyzed the historical data for Avaya’s 10,000 part numbers. The program evaluated every part at every location and established which parts were needed where, and how many, based on historical usage. The program can be modified to hit a certain target (e.g. your company wants to maintain a set number of a certain part at every location) and can continually be updated. “When we first implemented the parts management solution, we learned we had thousands of dollars of inventory in the wrong locations,” says White. “We spent the first six months of the implementation repositioning inventory across the country.” Avaya pulled so much inventory from the field it was able to establish a second business called “Authentic Avaya,” which sells the refurbished equipment on the secondary market, and create an additional revenue stream. The initial redistribution also reduced Avaya’s field inventory by 30%, which it maintains through continued statistical analysis-based parts distribution. Now, Avaya stocks nearly all its parts in its 3PL’s offices, stocking parts in techs’ trucks in rare instances where the tech is in a very remote geographic area. In the case of same-day urgency, parts are sent via courier from the 3PL to the customer’s site; in next-day need instances, the parts would be shipped by FedEx from Avaya’s central parts warehouse to the Avaya offices for the technicians to pick up. Using this system, Avaya improved its on-time delivery of parts from 39% to 95% in one year.

OPTIMIZE PARTS, OPTIMIZE PEOPLE

One would think it’s a natural connection: service technicians and the parts that they use. And yes, companies see it — according to research from AberdeenGroup, 82% view the combination of planning and provisioning field techs and service parts under a strategic service management approach as very or extremely important. However, the companies that act on this thought are not in the majority. In fact, according to the same research, in 69% of the companies surveyed, provisioning of field techs is either loosely aligned or not aligned at all. By combining the management of service techs and parts, you can increase efficiencies in the field. This is the approach Avaya took once it got its parts distribution under control.

Avaya receives notification of needed repairs in its customer service center. This notification comes in through calls and e-mails from customers, as well as via automatic alarms from the self-diagnostic software within some of Avaya’s equipment. When a call or alarm comes in, it goes into Avaya’s proprietary case management system, and the staff at the service center — mostly skilled equipment engineers — attempt to resolve the call remotely. Ninety-five percent of the time, they do. The other 5% of the time, a technician is dispatched. Avaya’s 1,500 technicians have their own (company) trucks in the field and carry laptops to run diagnostic and installation software on Avaya equipment at customer sites. In the past, the techs also used these laptops to access the case management system and see the jobs scheduled for them, logging in via a VPN (virtual private network) every morning at the Avaya field offices. If anything changed throughout the day (i.e. calls ran late, a customer wasn’t available), techs would call into the dispatch center.

In 2005, Avaya equipped its field techs with Palm Treo 650 devices, operating over Sprint Nextel or Cingular Wireless networks. The Treos run an Avaya-developed mobile tool called Technician Workbench (TWB), which interfaces with Avaya’s back end systems (e.g. the case management system). Avaya also implemented a service chain management application, SERVICEPower from vendor ServicePower. The application optimizes the scheduling of the technicians, taking into account their availability and skill sets so Avaya can automatically schedule techs and dynamically adapt their schedules.

Technicians receive their schedules in real time on their Treos via the TWB program. The techs can view all of the information stored in the case management system, including the problem the customer called in, whether the remote engineer in the call center did any diagnosis, the customer contact info, and whether a part was ordered. (The remote engineers typically know the part that is needed for repairs.) The techs’ schedules can be updated throughout the day, on the fly.

REFINE PARTS DISTRIBUTION BASED ON TECHNICIAN MOBILITY

Since technicians did not need to report to the field offices to get their schedules and job information, Avaya looked to further streamline its parts distribution to reflect mobility of its technicians. In doing so, Avaya formed a partnership with FedEx to address parts for next-day urgency calls. (These calls are the majority of the calls technicians are dispatched to address. For same-day urgency calls, parts are still sent by courier from Avaya’s 3PL locations to the customers’ sites.) In the instance of one of these calls, the remote engineer in the customer service center orders the part from Avaya’s central warehouse in Memphis, TN. The part is picked and packed at the warehouse, then sent to the nearby FedEx DC (distribution center). FedEx then delivers the part to a FedEx Kinko’s location near the customer site. The part arrives at the location by 9 a.m., and the tech simply picks up the part on the way to the customer site by showing his Avaya badge at the counter and referencing a ticket number. In the past, when the part was shipped to an Avaya field office, it didn’t arrive until 10:30 a.m. or later. By picking up the parts at FedEx Kinko’s, Avaya gained 1½ hours of additional productivity per tech, per day. This parts-and-people optimization has enabled Avaya to close 250 of its field offices.

When Avaya’s customers register for the annual user conference, they list the top five issues (i.e. complaints) they have with Avaya. You know what happened during White’s first experience with the conference. The year after Avaya had streamlined the service operations, field service didn’t even make the top five. “I know no one is ever going to come up to me and say, ‘Thank you so much for getting my part here,’” says White. “But in this case, and because we have the metrics in place, no news from the customers is good news.” Looks like she was able to remove the target she was wearing — can you?