Spare parts inventory management has a lot in common with sports. For example, in professional sport these days it is not unusual to hear players and coaches talking about process. They talk about focusing on the process and following the process. Rarely do they talk about scoring a goal, a
Inventory Myth #5: Putting Items Into Spare Parts Inventory Saves Money
Adding an item to spare parts inventory is sometimes seen as way of spreading the cost of the item so that the original purchaser can get a lower charge to their budget. This is particularly the case with project and engineering items that have a minimum order quantity. This is
Inventory Myth #4: Inventory Software Will Solve the Problem
Almost everybody realizes that inventory software alone does not provide a solution to problems. Yet many companies, when faced with an inventory issue, see the need for a new inventory software solution as being a key requisite. Data availability and visibility is a key requirement of inventory reduction but software
Inventory Myth #3: Consignment Stock Must Cost More
This myth probably adds more to the investment in inventory than any other. The opportunities for consignment stock are many and are largely ignored because of the belief that it costs more. Firstly, arranging to pay for items only at the time they are used, issued or sold is referred
Inventory Myth #2 – Inventory Risk Must be Re-evaluated to Reduce Inventory
Reducing holding quantities in inventory is often seen as requiring a corresponding increase with inventory risk. This might be the risk of extended downtime in manufacturing or the risk of lost sales in wholesale/retail. However, this is not true. For this to be true you must believe that the existing holdings
Inventory Myth #1 – An Economic Order Quantity Saves Money
In inventory management items often get ordered in an ‘economic’ order quantity so that the cost per item is at a minimum. This is seen to be economic because the subsequent issue cost of the item is reduced and the business, operational or project budget therefore records a lower cost.
5 Myths of Inventory Reduction
Spare parts inventory reduction has been a major focus of supply chain improvement initiatives for many years and success requires the application of both inventory fundamentals and good practice process. However, it is the encouragement of appropriate spare parts management behaviors that delivers truly sustainable results. And it is in
A Spare Parts Inventory Optimization Trap
Recently I had an interesting experience with a client that I thought that I should share. This client has been through our inventory optimization and reduction training using the Inventory Cash Release (ICR) Inventory Reduction Program but was not making progress at a rate which satisfied me or their senior management.