Apply 3C Theory in Spare Parts Management in Mobile Phone Industry

Grant and Schlesinger pointed out that there were three ways to increase their profit. The first way was to attract more customers and expand customer base; the second way was to raise the utility rate of customers; the third way was to keep good and long-term relationship with customers. Although repair is a customer service activity in terminal management, damage is possible for any product. In order to keep good interactions with customers and enhance brand loyalty, more and more mobile phone manufacturers leave after-sale repair to professional repair operators. Chen (2001) argued that the motivation for collaborative use in repair management is to allow all members in entire repair process participate jointly in the management through Internet as media and effectively improve the time-efficiency of entire maintenance. Under customer-oriented and service-oriented trend, repair service has played a role in creating competitive edges by enterprises. Therefore, professional repair operators for mobile phones will become an important ring in the supply chain of mobile phone products. Integrating subcontractors on business value chains including purchasers, suppliers, logistic operation and cash flow to enhance integral operation efficiency is the direction of future development of supply chains.Visit;Phone parts supplier.

Analyzing from the angle of entire supply chain, after manufactured by Original Equipment Manufacturer (OEM) or Original Design Manufacturer (ODM), a mobile phone will be launched in a sales channel like channel distributors and retailers for purchase and use by customer. If there is any damage during one-year factory warranty period in use, it is the time for a professional repair operator to provide their services. A professional operator of mobile phones is certified and given authorization by contract as a qualified repair operator that is responsible for repairs in the period of factory warranty (normally one year). From the angle of the process of repair, the repair process of mobile phones is shown as Fig. 1.

As the Fig. 1 shown, the original equipment manufacturers, retailers and repair operators should agree on principles of the receiving, delivery, transportation and repair. When customers send their breakdown mobile phones to the outlets of original equipment manufacturer, channel or repair operators, the outlets or channel operators will transfer the articles to logistics and repair operators will repair the mobile phones transferred by the logistics according to the agreed principle. The repair operation has to complete the repair in time and return the repaired article to original manufacturer, channel operator or an outlet of repair operator before the mobile phone is returned in the hands of customer (Christopher, 1992).

Now, let`s discuss the method of the order and replenishment of spar parts. There are many manufacturers and retailers of mobile phones and new products are launched continuously, but usually the product life cycle in the mobile phone markets is half of year. Although a product may not sell in the markets, the maintenance and repair should continue for a period of time. According to the practical experiences of the companies in the case studies and research, the repair rates of product is 1 to 2% that this experienced ratio was considered as the basis of spare parts replenishment in the past. Besides, in order to deal with the variations of quality and the uncertainty of demand and supply, traditionally an enterprise has to use stock to deal with the problem. But it is a high cost and inflexible method. One of purposes of supply chain management is to solve the problem.