Last Time Buy
The Last Time Buy (LTB) feature helps a planner determine the last time buy quantity for parts that will no longer be manufactured.
A Last Time Buy is triggered when one of these statements is true:
• A product has reached end of production (EOP) and will be discontinued soon
• The part vendor decides to no longer manufacture the part
With performing a Last Time Buy, the planner is faced with the task of assessing the part requirements in the remaining days of the product install base after the Last Time Buy date, as well as determining the alternative source of supplies. The planner must then recommend a last time buy quantity that is sufficient to cover the needs of the install bases, but that does not cause excessive inventory at the end of the support period.
In considering the end of production (EOP) requirements, it is best to have access to the current and future product installed base information. Unfortunately, most companies do not maintain such data. Therefore, it is necessary to provide an alternate method that can reasonably estimate the future needs. The other critical piece of the EOP planning puzzle is to estimate the part usage decay rate. One common practice for companies is to model the behavior of an end-of-life part with that of a similar or like part. For example, it is reasonable to model the end-of-life behavior of the 10 GB hard drive with those of 1 GB, 2 GB, and 4 GB hard drives which are no longer supported by the company.
For a global company, there is the added complexity of managing Last Time Buys in different geographies, for example US, EMEA, Japan, and Asia Pacific. Each geographical region may have different characteristics and the planners in their respective areas may have local knowledge or special support requirements that cannot be captured by the system. To address this requirement, the Last Time Buy feature provides two modes:
• Top-down, in which the company does a global Last Time Buy at one location and then allocates the quantity bought among the different regions, usually represented by the topmost location in that region
• Bottom-up, where each region performs its Last Time Buy independently
The Last Time Buy feature provides a forecasting method for Last Time Buy parts and their chains so that there is no need for install base information. Preliminary analysis with customer data shows using new profile based forecasts can significantly reduce the write off. Last Time Buy workflows and exception based management of Last Time Buy parts enable service companies to streamline the Last Time Buy processes and reduce overall operation/maintenance cost. They also provide better visibility for planners to allow them to take proactive actions.