Defining best practice for spare parts management can be tough. In fact, our recent research identified that, among the people that manage spare parts inventory, very little is known about best practices – that is, what top performers do better than others, what to focus on for better results and […]
Spare Parts Inventory Management Secrets
Subject Area: Spare Parts Inventory Management Secrets The Reality of Spare Parts Inventory Management One of the little acknowledged issues with spare parts inventory management is that for many companies they really don’t know what they have and/or why they have it. How can that be you ask. Don’t most companies use some kind […]
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 KPIs (yes, really) the vast […]
Isn’t It Time That We Started Talking About Inventory Prevention?
If the goal really is spare parts inventory optimization, then surely doing the work after the parts have been purchased is just wrong. Shouldn’t we be taking action before the parts are purchased? Shouldn’t we be talking about inventory prevention? Spare parts inventory optimization is great. It helps companies identify where they are holding […]
Obsolete Inventory Management – Three Ways to Deal With It
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 […]