The Risk Of A Trunk Stock Model

Over the years, we’ve seen that the major cause of customer dissatisfaction with OEMs has been slow service response times. The effects are tangible; in the medical world, for instance, the mission-critical equipment that doctors and nurses need to help patients stay healthy – and keep their operations going – increasingly sits idle for longer periods of time. Then, in cases where field service professionals don’t have the proper parts on hand to complete the job, delays are made that much worse.

One way OEMs – especially in the medical technology industry – have traditionally tried to shorten response and resolution times has been to deploy a “trunk stock” logistics strategy. Under this model, OEMs entrust their field engineers with parts and tools that the FEs store (often in the trunks of their cars, at their homes or in storage units) and take with them to end-user sites. We see a few serious risks to this model:

• Parts and products are lost, stolen, damaged and ruined more than you’d think. In fact, the average annual losses for OEMs aren’t in the thousands of dollars – they’re in the millions. No organization can afford that.
• It’s hard and inefficient to manage and replenish inventory. The OEM is reliant on its FEs to report to them exactly what they use and what they need to make their kit whole as quickly as possible. Then, the OEM somehow has to physically get those items to them. The process is full of possible breakdowns that ultimately create service delays, especially when FEs are as busy traveling and servicing end-users as they are these days.