IDEAS home Printed from https://ideas.repec.org/a/inm/orinte/v29y1999i4p1-18.html
   My bibliography  Save this article

Identifying Opportunities for Improving Teradyne's Service-Parts Logistics System

Author

Listed:
  • Morris A. Cohen

    (Operations and Information Management, The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

  • Yu-Sheng Zheng

    (Operations and Information Management, The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

  • Yunzeng Wang

    (School of Business Administration, University of Mississippi, University, Mississippi 38677)

Abstract

Teradyne is a major manufacturer of electronic testing equipment used in semiconductor and electronics assembly plants throughout the world. In a recent project, we evaluated opportunities for improving Teradyne's global service-parts repair and logistics network. This system is complex because of the large number and variety of parts, the geographic dispersion of the installed base of customers' machines, the use of multiple classes of service, and stringent requirements for prompt response to customer requirements. We used basic inventory models to capture key characteristics of the system. These models provided insight into the relative value of several improvement opportunities. Teradyne used these insights to prioritize change options and has successfully implemented several of them. The project's success was, in part, based on the role of a company-academic team that combined understanding of relevant inventory models with in-depth knowledge of logistics processes.

Suggested Citation

  • Morris A. Cohen & Yu-Sheng Zheng & Yunzeng Wang, 1999. "Identifying Opportunities for Improving Teradyne's Service-Parts Logistics System," Interfaces, INFORMS, vol. 29(4), pages 1-18, August.
    • Handle: RePEc:inm:orinte:v:29:y:1999:i:4:p:1-18
    DOI: 10.1287/inte.29.4.1
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/inte.29.4.1
    Download Restriction: no
    File URL: https://libkey.io/10.1287/inte.29.4.1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jihong Ou & Lawrence M. Wein, 1996. "Sequential Screening in Semiconductor Manufacturing, II: Exploiting Lot-to-Lot Variability," Operations Research, INFORMS, vol. 44(1), pages 196-205, February.
    2. Mark D. Longtin & Lawrence M. Wein & Roy E. Welsch, 1996. "Sequential Screening in Semiconductor Manufacturing, I: Exploiting Spatial Dependence," Operations Research, INFORMS, vol. 44(1), pages 173-195, February.
    3. Craig C. Sherbrooke, 1968. "Metric: A Multi-Echelon Technique for Recoverable Item Control," Operations Research, INFORMS, vol. 16(1), pages 122-141, February.
    4. G. J. Feeney & C. C. Sherbrooke, 1966. "The (S - 1, S) Inventory Policy Under Compound Poisson Demand," Management Science, INFORMS, vol. 12(5), pages 391-411, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kutanoglu, Erhan & Mahajan, Mohit, 2009. "An inventory sharing and allocation method for a multi-location service parts logistics network with time-based service levels," European Journal of Operational Research, Elsevier, vol. 194(3), pages 728-742, May.
    2. Tsai, Shing Chih & Zheng, Ya-Xin, 2013. "A simulation optimization approach for a two-echelon inventory system with service level constraints," European Journal of Operational Research, Elsevier, vol. 229(2), pages 364-374.
    3. Du, Bisheng & Larsen, Christian, 2011. "Base stock policies with degraded service to larger orders," International Journal of Production Economics, Elsevier, vol. 133(1), pages 326-333, September.
    4. Vinayak Deshpande & Ananth V. Iyer & Richard Cho, 2006. "Efficient Supply Chain Management at the U.S. Coast Guard Using Part-Age Dependent Supply Replenishment Policies," Operations Research, INFORMS, vol. 54(6), pages 1028-1040, December.
    5. Wang, Yunzeng, 2001. "The optimality of myopic stocking policies for systems with decreasing purchasing prices," European Journal of Operational Research, Elsevier, vol. 133(1), pages 153-159, August.
    6. F. Tevhide Altekin & Ezgi Aylı & Güvenç Şahin, 2017. "After-sales services network design of a household appliances manufacturer," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(9), pages 1056-1067, September.
    7. Candas, Mehmet Ferhat & Kutanoglu, Erhan, 2020. "Integrated location and inventory planning in service parts logistics with customer-based service levels," European Journal of Operational Research, Elsevier, vol. 285(1), pages 279-295.
    8. Morris A. Cohen & Narendra Agrawal & Vipul Agrawal, 2006. "Achieving Breakthrough Service Delivery Through Dynamic Asset Deployment Strategies," Interfaces, INFORMS, vol. 36(3), pages 259-271, June.
    9. Katarzyna Grondys & Iga Kott & Anna Wiœniewska-Sa³ek, 2014. "Entrepreneurship As An Opportunity Of Development For Industrial Companies Using Logistics Centers," Polish Journal of Management Studies, Czestochowa Technical University, Department of Management, vol. 10(1), pages 45-53, December.
    10. Xiang Fang & Kut C. So & Yunzeng Wang, 2008. "Component Procurement Strategies in Decentralized Assemble-to-Order Systems with Time-Dependent Pricing," Management Science, INFORMS, vol. 54(12), pages 1997-2011, December.
    11. Sleptchenko, A. & van der Heijden, M. C. & van Harten, A., 2002. "Effects of finite repair capacity in multi-echelon, multi-indenture service part supply systems," International Journal of Production Economics, Elsevier, vol. 79(3), pages 209-230, October.
    12. Marcel A. Sieke & Ralf W. Seifert & Ulrich W. Thonemann, 2012. "Designing Service Level Contracts for Supply Chain Coordination," Production and Operations Management, Production and Operations Management Society, vol. 21(4), pages 698-714, July.
    13. Vinayak Deshpande & Morris A. Cohen & Karen Donohue, 2003. "An Empirical Study of Service Differentiation for Weapon System Service Parts," Operations Research, INFORMS, vol. 51(4), pages 518-530, August.
    14. Yunzeng Wang & Morris A. Cohen & Yu-Sheng Zheng, 2000. "A Two-Echelon Repairable Inventory System with Stocking-Center-Dependent Depot Replenishment Lead Times," Management Science, INFORMS, vol. 46(11), pages 1441-1453, November.
    15. Syntetos, A.A. & Babai, M.Z. & Davies, J. & Stephenson, D., 2010. "Forecasting and stock control: A study in a wholesaling context," International Journal of Production Economics, Elsevier, vol. 127(1), pages 103-111, September.
    16. Du, Bisheng & Larsen, Christian, 2008. "Base stock policies with degraded service to larger orders," CORAL Working Papers L-2008-07, University of Aarhus, Aarhus School of Business, Department of Business Studies.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alfredsson, Patrik, 1997. "Optimization of multi-echelon repairable item inventory systems with simultaneous location of repair facilities," European Journal of Operational Research, Elsevier, vol. 99(3), pages 584-595, June.
    2. Mauricio Varas & Franco Basso & Armin Lüer-Villagra & Alejandro Mac Cawley & Sergio Maturana, 2019. "Managing premium wines using an $$(s - 1,s)$$ ( s - 1 , s ) inventory policy: a heuristic solution approach," Annals of Operations Research, Springer, vol. 280(1), pages 351-376, September.
    3. David D. Yao & Shaohui Zheng, 1999. "Sequential Inspection Under Capacity Constraints," Operations Research, INFORMS, vol. 47(3), pages 410-421, June.
    4. Prak, Dennis & Teunter, Ruud & Babai, Mohamed Zied & Boylan, John E. & Syntetos, Aris, 2021. "Robust compound Poisson parameter estimation for inventory control," Omega, Elsevier, vol. 104(C).
    5. Nitin Bakshi & Sang-Hyun Kim & Nicos Savva, 2015. "Signaling New Product Reliability with After-Sales Service Contracts," Management Science, INFORMS, vol. 61(8), pages 1812-1829, August.
    6. Kathryn E. Caggiano & John A. Muckstadt & James A. Rappold, 2006. "Integrated Real-Time Capacity and Inventory Allocation for Reparable Service Parts in a Two-Echelon Supply System," Manufacturing & Service Operations Management, INFORMS, vol. 8(3), pages 292-319, August.
    7. Prak, Derk & Teunter, Rudolf & Babai, M. Z. & Syntetos, A. A. & Boylan, D, 2018. "Forecasting and Inventory Control with Compound Poisson Demand Using Periodic Demand Data," Research Report 2018010, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    8. Qin, Xuwei & Shao, Lusheng & Jiang, Zhong-Zhong, 2020. "Contract design for equipment after-sales service with business interruption insurance," European Journal of Operational Research, Elsevier, vol. 284(1), pages 176-187.
    9. Jovan Grahovac & Amiya Chakravarty, 2001. "Sharing and Lateral Transshipment of Inventory in a Supply Chain with Expensive Low-Demand Items," Management Science, INFORMS, vol. 47(4), pages 579-594, April.
    10. Izack Cohen & Morris A. Cohen & Elad Landau, 2017. "On sourcing and stocking policies in a two-echelon, multiple location, repairable parts supply chain," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(6), pages 617-629, June.
    11. Sang-Hyun Kim & Morris A. Cohen & Serguei Netessine, 2007. "Performance Contracting in After-Sales Service Supply Chains," Management Science, INFORMS, vol. 53(12), pages 1843-1858, December.
    12. Diks, E. B. & de Kok, A. G. & Lagodimos, A. G., 1996. "Multi-echelon systems: A service measure perspective," European Journal of Operational Research, Elsevier, vol. 95(2), pages 241-263, December.
    13. Hayya, Jack C. & Bagchi, Uttarayan & Ramasesh, Ranga, 2011. "Cost relationships in stochastic inventory systems: A simulation study of the (S, S-1, t=1) model," International Journal of Production Economics, Elsevier, vol. 130(2), pages 196-202, April.
    14. Hill, R.M. & Seifbarghy, M. & Smith, D.K., 2007. "A two-echelon inventory model with lost sales," European Journal of Operational Research, Elsevier, vol. 181(2), pages 753-766, September.
    15. Jérémie Gallien & Stephen C. Graves & Alan Scheller-Wolf, 2016. "OM Forum—Practice-Based Research in Operations Management: What It Is, Why Do It, Related Challenges, and How to Overcome Them," Manufacturing & Service Operations Management, INFORMS, vol. 18(1), pages 5-14, February.
    16. V. Radhamani & B. Sivakumar & G. Arivarignan, 2022. "A Comparative Study on Replenishment Policies for Perishable Inventory System with Service Facility and Multiple Server Vacation," OPSEARCH, Springer;Operational Research Society of India, vol. 59(1), pages 229-265, March.
    17. R. Basten & M. Heijden & J. Schutten & E. Kutanoglu, 2015. "An approximate approach for the joint problem of level of repair analysis and spare parts stocking," Annals of Operations Research, Springer, vol. 224(1), pages 121-145, January.
    18. Arts, Joachim, 2017. "A multi-item approach to repairable stocking and expediting in a fluctuating demand environment," European Journal of Operational Research, Elsevier, vol. 256(1), pages 102-115.
    19. Ashayeri, J. & Heuts, R.M.J. & Jansen, A. & Szczerba, B., 1994. "Inventory management of repairable service parts for personal computers : A case study," Other publications TiSEM 28578c62-2e4d-4345-929f-a, Tilburg University, School of Economics and Management.
    20. K Sahyouni & R C Savaskan & M S Daskin, 2010. "The effect of lifetime buys on warranty repair operations," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(5), pages 790-803, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orinte:v:29:y:1999:i:4:p:1-18. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.