Subject Area: Stock Turns In operations management there are many metrics that are used to measure operational performance. One of the most popular is OEE – Overall Equipment Effectiveness. OEE measures the productive operating capacity of plant and equipment, compared to the theoretical maximum capacity of that plant and equipment.
Inventory Reduction Metric – A Warning
Subject Area: Inventory reduction metric Goodhart’s Law When thinking about the measurement of actions and outcomes relating to spare parts inventory reduction it is worth considering the work of a British economist, Charles Goodhart. In 1975, Goodhart wrote what became known as ‘Goodhart’s Law’. The simplified version states: When a
Why Your Spare Parts Metrics Must Tell a Story
Subject Area: Spare Parts Metrics Everyone reading this will have no doubt heard the expression, “what gets measured, gets managed” – or something similar. The original quote is usually attributed to Peter Drucker’s 1954 book ‘The Practice of Management’. Perhaps more interesting is the somewhat lesser-known full quote:
Let’s Talk About Spare Parts Management Goals
Of course, spare parts management goals can be determined at any time of the year but usually there is an event that precipitates the need to review current goals and, if necessary, set new ones. This might correspond with budget setting. Often it is the start of a New Year.
The #1 Problem with Spare Parts Inventory Metrics
I am sure that you have heard the saying, ‘what gets measured, gets managed’. Essentially this tells us that people will focus on the things that are reported. This measurement should provide the feedback loop required to know if you are on track to reach your targets and
The Herd Behaviour of Spare Parts Inventory Metrics
Often, I am asked about spare parts inventory management metrics. This is not surprising as we all know that, in the words of William Thomson (Lord Kelvin), ‘what gets measured gets managed‘. Here is a quote, reportedly from a lecture by Lord Kelvin on ‘Electrical Units of Measurement’,
Stock Turn Illusion and How to Avoid It
What if the metric that you rely on doesn’t actually tell you what you think it does? In this 2-Minute Tutorial Phillip Slater discusses the Stock Turn Illusion and how some companies misinterpret this important spare parts inventory management measure. Phillip Slater is a Spare Parts Management Specialist with 35
The Spare Parts Management KPI Self-Delusion
Should any spare parts management metric be treated as a spare parts management KPI? Does your company suffer from the spare parts management KPI delusion? There is an old saying that ‘what is measured, matters’ and while there are some companies that don’t actually measure their performance through spare parts
Are 99% of Spare Parts Inventory Statistics Pointless?
We have all been there – engaged someone to do a survey of the organization on some topic or other or perhaps complete some other type of analysis (and I am not just thinking here about spare parts inventory analysis). We then look forward to the meeting where they present
Benchmark Figures for KPI Targets
Q: What information can you provide on benchmark figures for warehouse in industrial industries to assist us in setting up our KPI targets. We are reporting on stock accuracy against volume and stock accuracy against value (via stock-check). As well as warehouse stock-turn (goods issued/ave warehouse inventory for the last 12