Third-party logistics as a competitive advantage in Utilities spare parts management

Abstract

The maintenance of a large gas distribution network requires daily interventions scattered throughout the territory and with a strong "non-stationary" nature. As a result, the location of spare parts used for maintenance operations is equally distributed throughout the country. Therefore, to increase the productivity of the maintenance teams, it is essential to bring the spare parts closer to their destination, in order to reduce the travel time of the maintenance teams to a minimum in order to reach the intervention address. In this regard, the use of a third party logistic provider is hypothesized, who autonomously manages the shipment and storage of spare parts at transitory warehouses near the first intervention of each team’s day. The advantage of increased productivity of the maintenance teams is contrasted by the cost of shipping spare parts and the need for careful planning of in field operations. A basic general model was therefore developed to allow a preliminary assessment of the investment project. The goodness of the theorized model was then validated through its application to a case study, through an analysis of the differential costs between current model and new logistics management, evaluating the investment project with the typical techniques of the payback period (PbP) and net present value (NPV). Results obtained confirm the profitability of the theorized model, and the results obtained from the feasibility study are strongly in favor of the adoption of the new 3PL model for the studied company and so, generalizing, could be a winning strategy for all utilities company.