Inventory Doesn’t Just Appear! Have you heard the expression about ‘shutting the gate, when the horse has bolted’? It refers to trying to stop something happening when it has already happened. Seems like a silly thing to do, right? But this is the approach that most companies take with respect to […]
Action #7: Reduce the Value of Spare Parts Items Held
To reduce the value of spare parts items held is the last of the 7 Actions for Inventory Reduction and is probably the most obvious, but perhaps because of that the most overlooked. Most cost reduction actions are aimed at reducing the cost of an item for the obvious profit and loss impact. However, cost reductions […]
Action #6: Match Spare Parts Delivery With Usage
Each of the actions discussed in this series so far has been looking at ways to reduce the physical number of items held. However, one of the variables that drive the cost of holding inventory is how long you hold the inventory. This represents the amount of time that you have to finance the working […]
Action #5: Reduce Spare Parts Reorder Quantity
As discussed in other articles in this series, there are essentially two actions that you can take to reduce spare parts inventory: remove existing inventory or reduce the amount of inventory going in. We call this the bathtub principle because it is similar to pulling the plug in a bathtub to let water out or […]
Action #4: Change the Factors that Drive Safety Stock
With inventory reduction there are essentially two actions that you can take: remove existing inventory or reduce the amount of inventory going in. We call this the bathtub principle because it is similar to pulling the plug in a bathtub to let water out or closing the faucet to reduce the amount going in. Just […]
Action #3: Eliminate Spare Parts Duplication
The first two actions in the Inventory Cash Release Process (Have Someone Else Hold and/or Pay For Inventory and Sell Excess and Obsolete Stock) both involve taking items out of the inventory and this is also the case with Action #3: Eliminate Duplication. Almost by definition, spare parts duplication adds no value to you as a […]
Action #2: Sell Excess and Obsolete Inventory
Operationally, excess and obsolete inventory items generate little interest because they do not create emergencies and so few companies pay much attention to this inventory unless or until they undertake a specific program of review. In the normal day-to-day management these inventory items are mostly ignored and the focus tends to be on items that […]
Online Inventory Management Training Technology is Moving 5 Times Faster Than Management
Technology is moving 5 times faster than management – should you be paranoid or excited? These words were recently attributed to Dominic Barton, CEO of McKinsey & Co, and apply as much in our world of spare parts management as in any other aspect of management. One specific area that has moved 5 times faster […]
Inventory Optimization Actions for Spare Parts
This post is set up as a portal to the series of items relating to the Inventory Cash Release Process. This process is specifically designed to assist companies managing spare parts with inventory optimization and reduction. The Inventory Cash Release (ICR®) Process, is a structured step-by-step inventory optimization technique that guides users through the application […]
Spare Parts Inventory Goals: One Tip to Achieve Them
When going through their budgeting process it is common for companies to set new spare parts inventory goals for the year or to at least review their existing goals. However, when they do this many companies are setting themselves up for failure. Let me explain that. Spare Parts Inventory Goals Must Be […]