Wistron: Precise demand forecasts for service parts, efficient global inventory management
Wistron, a leading original design manufacturer (ODM) for information and communication technology, uses SAS Service Parts Optimization to forecast parts demand with greater accuracy and to improve inventory transparency. As a result, the Taiwan-based company gains greater efficiency and, ultimately, more revenue.
Wistron Corporation has six research and support centers, eight manufacturing bases, 13 customer-service centers and two global maintenance centers. Product lines include laptops, desktops, servers, networked home appliances, wired/wireless data communication and digital consumer electronics.
In addition to its successful ODM business, Wistron has achieved eye-opening results in the service business. Service parts account for much of the business group’s revenue. It is customary to provide service parts for consumer electronics for at least 39 months after a product goes off production. For commercial electronics, the period extends up to seven years.
SPOS can manage and process data from ERP, customer service and maintenance systems, as well as front-end applications. As it imports data, SPOS runs statistical analyses for demand forecasts and replenishment plans. And it directs purchasing activity.
“We did have an SOP that would forecast parts demand for three to six months,” explains Jack Chen, Senior Director of Operation Division, “but we needed to create forecasts for three to six years. And the SAS solution offers a strong statistical analysis engine."
Though akin to SPOS in structure, the former system could only produce short-term forecasts. For mid-term and long-term forecasts, Wistron needed a system with stronger data-processing capacity and the ability to integrate detailed data from multiple sources.
In certain circumstances, when a product line phases out of the market, forecasting parts demand can be difficult. Overestimates could lead to overstock and waste; underestimates might trigger customer complaints. With SPOS, Wistron aimed high to achieve two goals: accurate forecast and inventory transparency.
Using SAS for cluster analysis, Wistron analyzes service parts with similar consumption levels with respect to different clients and product lines. The analysis is further processed into a trend model as a reference for forecasts.
“A precise forecast requires more than just experience,” Chen says. “Statistical analyses are imperative to build up long-term forecasts. With SPOS, we can successfully obtain accurate forecasts.”
Users can add non-default parameters to obtain higher-value results. For instance, if through statistical validation one non-default parameter was found to be significant in forecasts, this parameter could be added to the SPOS to perform forecasts and planning activity.
Global inventory view in one interface
“Wistron has a wealth of experience in ODM and is familiar with the supply chain,” Chen says. “SAS has helped different industries implement the system. The combined effort between us triggered more ideas and inspiration.”
As part of Wistron's goal to reduce inventory while improving customer service, the manufacturer understands the importance of influencing consumer behavior. When offered steeper discounts, for example, shoppers tend to purchase new instead of paying for repairs.
“These changes undoubtedly influence our business strategies,” Chen says. “It is also a new challenge for our planners to interpret the data derived from the analyses.
“Wistron constructed SPOS with technical support from SAS, and the system has successfully helped us achieve much more precise forecasts of parts demand and enhanced inventory transparency. With this, Wistron effortlessly deals with the complex management issues that arise due to our successful and growing business.”
The results illustrated in this article are specific to the particular situations, business models, data input, and computing environments described herein. Each SAS customer’s experience is unique based on business and technical variables and all statements must be considered non-typical. Actual savings, results, and performance characteristics will vary depending on individual customer configurations and conditions. SAS does not guarantee or represent that every customer will achieve similar results. The only warranties for SAS products and services are those that are set forth in the express warranty statements in the written agreement for such products and services. Nothing herein should be construed as constituting an additional warranty. Customers have shared their successes with SAS as part of an agreed-upon contractual exchange or project success summarization following a successful implementation of SAS software. Brand and product names are trademarks of their respective companies.
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Establish a next-generation service parts management system capable of forecasting demand in the coming three to six years.
SAS® Service Parts Optimization
More precise forecasts and a clear picture of long-term inventory flow bring greater efficiency, cost savings, and customer satisfaction
Hardware: HP Integrity Server
“"With help from SAS, Wistron effortlessly deals with the complex management issues that arise from our successful and growing business."”
Senior Director of Operation Division