“Due to an increasing demand for service parts, we decided in 2020 that in order to continue to satisfy our customers’ expectations, a separate service parts warehouse was needed,” said Nick Anderson, customer service manager, Stellar. “Our new PDC adds value for our customers by increasing the amount of designated service parts in stock and by speeding up the shipping process. Our end goal was to be able to fulfill the majority of service part orders in 24 hours or less.”
In September 2022, the PDC went online. The 20,000-sq.-ft. facility is currently stocked with parts to fulfill nearly all common service part orders to help reduce customer downtime. The designated four-person shipping team uses the latest packaging and shipping equipment, and most of the orders are shipped in under 24 hours with many shipping the same day.
“Our shipping metrics show just how much of an impact the PDC has made,” Anderson said. “The average lead time to get a service part shipped has dropped by over six days from where it was in January 2022 to where it is currently.”
To kick off the project, Stellar began working with a team of manufacturing engineering students from Iowa State University (ISU) who were guided by Stellar’s manufacturing engineering team. The students worked as summer interns in 2020, collecting data in Stellar’s parts area and shipping department on everything from time to ship an order all the way down to the amount of time shipping personnel spent gathering parts from different areas of the business.
While the ISU students were collecting data, a cross-functional team between sales, marketing, customer service and manufacturing engineering was working to determine what parts needed to be stocked in the warehouse. It was determined that a high percentage of service part orders contain many of the same parts, and by stocking these parts approximately 90 percent of service part orders could be filled directly from the warehouse. To help overcome any supply chain issues and ensure the PDC does not run out of parts due to seasonality or large order quantities, each part is stocked with sufficient inventory, the company says.
Once the ISU team completed collecting data and Stellar’s cross-functional team determined which parts to stock, the ISU team went to work designing the warehouse in Stellar’s newly acquired Mason City facility. Using the data they collected, they were able to design a warehouse for maximum efficiency with plenty of room for growth.