Servigistics Taps the Channel

Servigistics, based here, develops software that manages the quantity, location and destination of parts used to fix cars, medical equipment, shop-floor machinery and other complex items. It also helps schedule and track engineers to service those parts.

The software can be a boon to solution providers looking to offer value to existing clients, especially those in manufacturing, said Johnny Baker, vice president of strategic alliances at Servigistics.

"Companies are going to their current ERP suppliers and to their trusted systems integrators and asking how to solve the problems [of unmanageable parts inventory and inefficient equipment repairs," Baker said. "Our consulting partners are bringing deals our way."

And that's a relief to Servigistics, Baker said. "When you're a small company, getting the attention of a large systems integrator is virtually impossible."

Servigistics must be doing something right, though, because IBM Global Services (IGS) and Cap Gemini Ernst and Young are among the vendor's first crop of consulting partners.

"The [parts services industry has been neglected for years," said Pete Gleason, a partner at IGS unit IBM Business Consulting Services and a supply chain expert focused on automotive clients such as BMW. "Now, during the downturn in the economy, you're seeing the value of service parts. It's a very profitable stream," he said.

While companies typically derive one-quarter of their revenue from the products they sell, about half of their revenue can come from fixing, maintaining or upgrading those products, which range from CT scan units to tractors to washing machines.

Products such as the Servigistics offering, i2's Service Parts Planner, SAP's Advanced Planner and Optimizer, and Xelus' XelusPlan help companies more accurately plan for parts demand, Gleason said.

One IGS customer, Toshiba Americas Medical Systems (TAMS), has been able to reduce its parts inventory by 3 million items in the four months since deploying Servigistics' software.

TAMS still has to manage 38 million medical equipment parts, but that number will drop further as inefficiencies are driven out of the system, said Brian Turnbull, vice president of the services division at TAMS, Tustin, Calif. "Medical equipment is a revenue-

producing area for our customers," he said. "They're demanding 98 percent uptime, and we deliver a 20-minutes-or-less response by phone [to a service call.

"Once we've bought parts, they're ours to keep," Turnbull said, referring to a network of warehouses around the United States where the parts reside until requested. "Servigistics [helps customers plan in advance, based on questions like, 'What if we sell 10 machines to one hospital? How much inventory do we need? Can we redistribute the inventory as needed?' "

Those warehouses will never go away completely, but with a service-parts planning solution, the inventory in those facilities can be better managed, Turnbull said.

Servigistics offers its self-named suite of products as hosted services aimed at midsize companies or by way of an enterprise software license.