Differences in adoption of global spare parts management in autonomous service units

The purpose of this paper is to study the adoption and motivation to adopt global spare parts practices in autonomous units servicing the products of an original equipment manufacturer.

The methodological approach is case study investigating the reasons for different levels of use and the perceptions regarding the benefits of a centralized supply chain management in four representative service units.

Autonomous spare part units often source locally because local suppliers are easy to work with in terms of purchasing processes and have no requirements for systematic planning and control of spare parts purchases and inventory management. However, increasing the share of centrally sourced and managed spare parts in the supply chain brings advantages in terms of lower total cost and higher availability. From the perspective of individual subunits engaged in providing product support services, this advantage of relying on a centrally managed spare parts supply chain of an original equipment manufacturer is not self-evident. Autonomous units frequently choose to continue sourcing spare parts from alternative sources, undermining the economies of scale attainable through the original equipment manufacturer’s supply chain. Higher levels of use are facilitated by back-office purchasing management at the unit level. The positive perceptions of centralized supply management in general – including the relationship between the supply unit and the service unit – further facilitate adoption, while local requirements and practices inhibit it.

The study is a single case study and presents proposals requiring further study of the reasons for the observed differences in use of centralized supply chain management.

Centralized spare parts management service requires investment in back-office resources at the service unit level.

The research increases the practical relevance of existing research through an empirical investigation on the autonomous units’ motivations for and perceived benefits of centralized spare parts supply.