China Mobile is the biggest mobile communication carrier in China. It provides the mobile voice, data, IP telephony, multimedia, and other services. China Mobile is listed in Hong Kong and New York. It has wholly-owned subsidiaries in 31 provinces, autonomous regions, municipalities, and Hong Kong of China. With more than 900,000 base stations and 650 million subscribers, it has the biggest network scale and most subscribers in the world.
With the mobile communication market competition increasing in China, carriers focus on how to guarantee the network quality and stability and to make end users have a good service experience. To ensure stable network performance and respond to network faults on time, scientific management of spare parts is critical. To solve the longstanding problems of spare parts purchase, inventory management, exorbitant human cost, low operation and maintenance efficiency caused by spare parts turnover and retirement, the Hebei branch of China Mobile formally requested the management services for transmission product spare parts on February, 2009.
This project covered the ZTE transmission devices in the Hebei province, including the Langfang, Changzhou, and Chengde cities, and the level-1 and level-2 arterial grid WDM and SDH devices. ZTE offered a customized spare parts service solution after well studying the customer requirements. The customer did not need to specially purchase spare parts, and ZTE was responsible for spare parts allocation, management, storage, and delivery. The customer paid for the spare parts management service fee annually. This reduced the investment on spare parts, optimized the cash flow and asset structure, and improved the spare parts management and service quality.
ZTE's Service Solution
>>Spare Parts stockroom setting and spare parts management
- According to the electronic spare parts attributes, ZTE designed the building project of spare parts stockrooms and cooperated with professional logistics providers.
- According to the SLA time limits and the geographical distribution of devices, ZTE determined the stockroom positions by calculating traffic mileages. Totally three stockrooms were set in Shijiazhuang, Langfang, and Chengde cities of the Hebei province.
- All spare parts were labeled with bar codes for accurate management. In addition, the parts management system was used to achieve the information-based and viewable management.
>>Safeguards Achieved through SLA
- Boards and components were divided into important ones and common ones. A certain number of important boards and components were stored in the customer’s stockrooms. The customer could use them in emergencies when faults occurred. Meanwhile, the field parts replenishment flow was started. For common boards and components, logistics providers stored them in newly-built stockrooms. When the customer applied, the common boards and components were delivered to the customer liaison within six hours.
- Full-time storage administrators using a 24×7 shift schedule
- Delivery ways were planned in advance to better integrate the local logistics resources.
- The independent delivery-retrieval-repair flow ensured timely and quick circulation of boards and components.
>>Determination of parts quantity and approach to emergency demands
- ZTE investigated the types and number of devices used in the network in detail. Based on the local parts damage rate, ZTE allocated the boards and components by using the parts demand forecasting model.
- ZTE set the inventory safety line for frequently-used parts and dynamically monitored the inventory. An inventory pre-alarm would be generated when the inventory was lower than the safety line. ZTE analyzed the pre-alarm in time and made a replenishment plan.
- ZTE established a level-3 stockroom structure to ensure that boards and components could be allocated in emergency.
After purchasing the parts management service, the customer solved the problems presented by parts purchase and management, increased efficiency and lowered the cost.
- The customer did not need to establish parts stockrooms, thus saving investment cost.
- Since the customer did not need to purchase parts in bulk, the accuracy management required by the group was achieved. The working capital that had been used to purchase parts was saved, and the inventory loss was eliminated.
- The customer did not need to incur the disposal cost of spare parts because of network upgrade or changes. ZTE was responsible for upgrading inventory by using the spare spare parts of the latest versions (or the versions used in the network).
- The customer did not need to undertake the replenishment cost for purchasing new spare parts to replace the spent spare parts or to repair faulty devices.
- The human, inventory management and control, and information system cost was saved during the spare parts management. The original stockroom administrators could engage in outsourced service management, data analysis, and other jobs requiring higher occupational skills.
- The customer did not need to undertake storage and logistics costs and insurance expenses.
- The customer did not need to engage in spare parts repair. ZTE part stockrooms undertook this part of work. The parts disposal problem involved would be handled effectively.