Service parts logistics network model selection for different industries in Asia

Abstract

Service parts logistics is growing fast in Asia. The industries of high-tech, automotive and aerospace have different spare part attributes and customer requirements, further complicated by the complex logistics challenges in the region, calling for different service logistics networks. Different network models have different characteristics. For example, some models cover a large service area or provide a fast response while others have a good inventory visibility or incur low transportation cost. This paper analyses different industries and various SPL network models in the context of Asia. Through our theoretical and empirical analyses, we find that a centralised 1-echelon network is generally suitable for aerospace and automotive customers whereas a decentralised 2 or 3-echelon network is suitable for high-tech customers. This paper also proposes an easy-to-use framework for selecting the right service logistics network based on different logistics performance elements. At the end of this paper, we offer several managerial implications to improve logistics business and capture potential revenue. This study is useful for corporate managers and scientific community that supports corporate practices.