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A Specific Multi-National Company (MNC) Problem: A Team Approach to Spare Parts Inventory Management

July 6 Phillip Slater

Subject Area: A Team Approach to Spare Parts Inventory Management

Team Approach to Spare Parts Inventory ManagementMost of my career has been spent working with multi-national companies (MNCs). Sometimes these companies have operations in just a couple of countries. Sometimes they have hundreds of locations around the world.

One thing they usually have in common is a disjointed approach to spare parts inventory management.

They lack visibility across their locations and often their management systems are developed locally.

This results in two specific problems:

 

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  1. The purchase of stock items when within their own network they have excess stock that they could easily transfer.
  2. Uncoordinated action when seeking to reduce their inventory through selling excess stock.

To say the least the result of these problems is likely to be sub-optimal outcomes.

More specifically, the result will be a double-whammy: money wasted on purchases that were not required AND money foregone through low value sales.


Let’s Define the Desired Outcome


The desired outcome is coordinated activity across multiple locations such that the above problem are eliminated.


What are the Issues that Lead to That Outcome?


There are three obvious issues here:

  1. A lack of visibility of available stock levels.
  2. Different decision-making policies across the locations.
  3. A culture of not sharing (or even hoarding) spare parts.

To say the least the result of these problems is likely to be sub-optimal outcomes.


The Answer is a Team Approach to Spare Parts Inventory Management


The lack of visibility of stock levels will be an IT issue. Solving this may require significant IT investment.

However, this doesn’t stop you from solving problems 2 & 3.

Standardizing decision-making policies can be achieved through group training that gives your team members a common understanding (and a common language) with spare parts inventory management.

Establishing a common approach can then lead to the development of a common culture. This will happen when people understand the basis of decisions that are being made at both their own and other locations.
 
 

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Posted by: Phillip Slater
 

Filed Under: Comp, Inventory Management Tagged With: asset recovery, excess inventory

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