A supplier of military equipment was asked to bid for a large naval retrofit program. During the tender evaluation process the supplier received a clarification request from the customer which stated:
Please provide a full mathematical justification on how the supplier intends to support our whole fleet with the proposed level of spares.
The supplier had recently started using Spares Calculator and they responded with a fully justified technical note showing that the proposed figures were correct. The analysis also showed that there was a fundamental flaw in the customer’s logistic model and the customer was invited to take part in a logistics planning workshop.
We first started using Spares Calculator when a military customer asked us to justify our spare parts figures. Spares Calculator showed that the customer’s logistic model was flawed and as a result they increased their Spare Parts order from $800,000 to over $3,000,000.
Spares Calculator was used as a presentation tool during the workshop and the supplier and customer worked together to define a new logistic model based on the validated statistical data that Spares Calculator provided.
And the results? With minimal training, Spares Calculator gave the supplier the accurate data needed to support the proposal and develop a long-term revenue generating relationship.
By showing the accurate risk of equipment failure and quantifying the associated costs the supplier was able to:
- Demonstrate professionalism.
- Justify the proposal with validated risk and cost data.
- Eliminate outages by identifying the correct level of spares.
- Increase repeat business by strengthening relationships.
In the words of the VP of Bids and Marketing:
We are absolutely delighted with the way that Spares Calculator has helped us to improve our bid process and the way we justify our spare parts proposals.