Consumer Electronic Manufacturer
Service Parts Network Optimization to Reduce Costs

45,000 SKUs
600+ Vendors
9 DCs

Goals

Rationalize time-critical service network in North America serving several hundred high-value semiconductor equipment

Reduce Total Cost to Serve to comprise multi-echelon spare parts inventory investment, handling costs, and expediting costs while meeting or exceeding service level agreement (SLA) targets

Challenges

Escalating costs in time-critical service networks

No quantitative basis for network-wide improvement initiatives

Benefits

Determined the optimal size of the service network and the role for each facility

Assigned service locations to DCs and set optimal safety stock levels

Achieved $10 million total savings that Applied Materials reported publicly

$10 M
Total Savings

Solutions

5/5