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June 13, 2006


Kevin O'Malley

The reason why companies provide critical logistics is because High Tech companies sell 2hr/4hr service contracts to support installed equipment (similar to the extended contracts that we never buy when we get a new TV). Instead of putting expensive parts in every technician trunk they locally centralize it into a "field stocking location". For example, UPS Supply Chain Solutions who has been doing this for over 10 years has 650 locations globally to provide 2hr or 4hr critical order fulfillment.

This a huge value add for High Tech companies to avoid the high cost of service parts and provide a high level of parts availability and service reliability.

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