Identifying opportunities for improving Teradyne's service-parts logistics system

Teradyne is a major manufacturer of electronic testing equipment used in semiconductor and electronics assembly plants throughout the world. In a recent project, we evaluated opportunities for improving Teradyne's global service-parts repair and logistics network. This system is complex because of the large number and variety of parts, the geographic dispersion of the installed base of customers' machines, the use of multiple classes of service, and stringent requirements for prompt response to customer requirements. We used basic inventory models to capture key characteristics of the system. These models provided insight into the relative value of several improvement opportunities. Teradyne used these insights to prioritize change options and has successfully implemented several of them. The project's success was, in part, based on the role of a company–academic team that combined understanding of relevant inventory models with in-depth knowledge of logistics processes.