Managing Automation - September 2007 - (Page 40)

ESSIVE MANUF PROGR IGH ACHIEVERACTURING H 2007 AVAYA INC. By boosting visibility into service parts demand and inventory, Avaya bolstered its service levels and improved customer satisfaction. CUSTOMER MASTERY B Y B E T H S TA C K P O L E company facts ho better than your customers to give a heads-up that something isn’t working? Telecommunications provider Avaya Inc. got that message loud and clear in 2003 at its annual user conference. During the event, which catered to more than 400 customers and business partners, Avaya executives were handed an earful about the company’s quality of service — specifically, customers’ inability to get their hands on replacement parts in any kind of a timely fashion. “The majority of questions were around the fact that customers were paying for AVAYA INC. maintenance, but weren’t able to get the parts,” reTOTAL REVENUE/EMPLOYEES: $5.14 billion (2006)/19,000 employees counts Fernando Boza, senior manager for global servLOCATION: Basking Ridge, NJ ices planning at Avaya, INDUSTRY: Builds, designs, deploys, and manages which delivers telecommutelecommunications networks for corporate enterprises, with more than 90% of the Fortune 500 companications products, applicanies as clients tions, and services. “It came CEO: Lou D’Ambrosio down to a customer satisfaction issue — we arguably PROJECT LEADERS: Traci White, Fernando Boza couldn’t keep going in that PROJECT NAME: Service Parts Delivery Transfordirection. We had to make mation Using Servigistics a change to keep customers CORE TECHNOLOGIES USED IN PROJECT: and reduce our expenses as Servigistics Strategic Service Management software an internal measure.” ROI/BUSINESS BENEFIT: The integration of field The broad initiative to undemand and inventory information across a single network gave Avaya significantly better visibility into parts derstand the problem and and demand. This led to a better than 35% reduction in change its processes gained inventory in the United States (from $250 million to Avaya recognition as a High $130 million), while avoiding more than $4 million in Achiever in Customer Masrepair costs. Most significantly, Avaya’s service levels tery in Managing Automabumped up to best-in-class status, at 95%. tion’s 2007 Progressive Manufacturing awards competition. The problem of ser vice parts inventor y was somewhat of a catch-22: Avaya maintained huge inventories of parts — and consequently, incurred significant inventor y overhead — yet it didn’t have a proper handle on inventory planning and placement. At the time, the company’s ser vice supply chain had mushroomed to more than 2,500 physical service parts stocking locations (which included Avaya offices and trucks staffed by independent technicians) handling nearly 20 million part/pair combinations, which, in turn, were managed and tracked by more than 30 planners. Each location was planned autonomously and there was little visibility into inventory across the globe. As a result, Avaya’s high levels of service parts inventory didn’t directly translate into an ability to meet customer demand and live up to its service-level agreement (SLA) contracts. “We planned inventory in the field with the technicians and it was largely driven by an incident that happened last month — say, we didn’t have a particular part. Then, we’d go ahead and order three of them,” Boza explains. “The result was we had a lot of inventory, but it was the wrong inventory in the wrong place.” PEOPLE, TOOLS, AND PROCESS In response to customer criticism, Avaya put together a Six Sigma planning team to understand the problem and measure existing service levels to get some sort of benchmark. Based on the team’s findings, Avaya determined that the service parts problem was due to shortcomings in three areas: the makeup of its service organization, its existing set of inventory planning tools, and its inventory control processes, Boza says. On the people front, Avaya’s service organi- ma September 40 2007

Table of Contents Feed for the Digital Edition of Managing Automation - September 2007

Contents Take 1 Europe’s Automation Chiefs Upbeat on ’08 Business Prospects Vendor Coalition Pushes Human Element of SOA Wireless: Users Still Approaching with Caution One Year Later, IBM Shows Plan for MRO’s Maximo Study: More Work Needed to Lure Next-Gen Talent Executive Q&A Notes Cover Story: 2008 Companies to Watch Special Report: The 2007 Progressive Manufacturing High Achievers Progressive Manufacturer of the Year Business Model Mastery Innovation Mastery Customer Mastery Supply Network Mastery Data & Integration Mastery Education & Training Mastery Operational Excellence Mastery Leadership Mastery Transformation: Orchestrating the Multi-Tier Supply Network Integration: The Timeless Quest for Accurate Data Industries: Maintenance No Longer on Schedule Product Scan Advertiser Index Next

Managing Automation - September 2007

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