Do you really understand the ‘rules’ of spare parts inventory management?
Does it matter if you do or don’t?
This article explains why it does.
The management of spare parts is no different to any other management activity: to be successful it is important that you understand the ‘rules’ that govern success.
By that, I mean the way that different elements of the activity interact and influence each other. Without a proper understanding of this you will find yourself playing by the wrong rules.
By way of analogy, let’s look at the world of sports where there are a lot of formats that, to the untrained eye, look the same (or at least similar) but are actually quite different.
Consider the following:
- Baseball vs. softball
- American football vs. Canadian football
- Basketball vs. netball
- Rugby league vs. rugby union
In each case, understanding the rules of one does not make you and expert at the other.
For example, imagine if you turned out to play American Football but only understood the rules of Canadian Football.
Both sports look very similar but there are some major differences.
In Canadian Football the field is larger, the goal posts are placed differently, the end zone is deeper, there are more players on the field, the number of downs is different, and there is no ‘fair catch’ rule.
The basic skills may be transferable but if you don’t understand the rules you are not going to be an effective player.
What does this have to do with the management of spare parts inventory?
The management of spare parts and the management of other inventories, like American and Canadian football, appear similar but are actually quite different.
To be clear, I am addressing here the management of spare parts held by a company for operational and maintenance support of their equipment.
The differences are subtle but significant and they stem from four irrefutable issues:
- The position of these spares at the very pointy end of the supply chain
- The influence of maintenance planning
- The time frame over which the spares are held
- The inability to realize any reasonable return from excess or obsolete stock holdings
The effective management of spare parts requires an understanding of a very specific set of inventory management rules.
If you are not achieving your goals with your spare parts inventory management, it may be that you are working with the wrong set of ‘rules’.
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Posted by: Phillip Slater