New Part Introduction Effect on Spare Part Inventory Management

Current automobile market is very competitive market. Customer is demanding new variants – new technology in field. Companies sales force are asking to develop new variants of automobile. With this, design team works to reduce the failure in field to improve the downtime. Also, top management team puts pressure for cost reduction. All above three major forces, creates the new part lines in system, which creates difficulty in spare parts to satisfying the customers. Many times, design team creates the new part in system which is non interchangeable with old one. Company as well as dealers need to keep more inventory at their end due to these new part lines. If company has created more slow mover or non-mover part lines in system, then forecasting of these parts is critical challenge for demand planner. So, new part lines put pressure for inventory as well as part availability. In this research paper, researcher has mentioned the effect of new part introduction on part availability as well as on inventory value for one of the automobile company.