Pooling is a method of addressing the stocking of critical parts that may have low demand to achieve a compromise between consolidating parts into central stocking locations or utilizing regional warehouses and stocking many parts in the field locations. Pooling is defined by defining parameters on the
Forecast Pooling Parameters page.
Many service organizations are characterized by a large service parts distribution network, particularly a large number of field stocking locations (FSLs). These field stocking locations can be dedicated warehouses, rented storage locations, storage space in customer premises, and/or field engineers' truck trunks. The number and nature of these FSLs pose special challenges to the service parts planning process.
On the one hand, many critical parts need to be close to the installed base in order to respond to customer demands in a timely fashion. In many cases, the stringent customer service level agreements rule out the possibility of shipping the requested parts directly from the central stocking location, even using an expedited transportation mode.
On the other hand, these parts or at least many of them usually have very low demand volume at any one of these FSLs and some of them may be quite expensive. Deploying many parts to a large number of small FSLs will incur prohibitively high inventory carrying (or holding) cost and obsolescence. Furthermore, the number of parts that can be stored in these field locations may be constrained by the space.
A straightforward solution to this problem is to introduce a middle-tier network location - between the central stocking location and field locations - where some inventory is consolidated. However, the cost of this solution is more capital investment to build more warehouses. Often, this extra capital expenditure cannot be justified.
Forecast Pooling Parameters can be configured to address this problem.