Adding an item to spare parts inventory is sometimes seen as way of spreading the cost of the item so that the original purchaser can get a lower charge to their budget. This is particularly the case with project and engineering items that have a minimum order quantity. This is similar to Myth#1: Economic Quantities […]

Almost everybody realizes that inventory software alone does not provide a solution to problems. Yet many companies, when faced with an inventory issue, see the need for a new inventory software solution as being a key requisite. Data availability and visibility is a key requirement of inventory reduction but software is only a tool and, […]

This myth probably adds more to the investment in inventory than any other. The opportunities for consignment stock are many and are largely ignored because of the belief that it costs more. Firstly, arranging to pay for items only at the time they are used, issued or sold is referred to as consignment stocking. In […]

Reducing holding quantities in inventory is often seen as requiring a corresponding increase with inventory risk. This might be the risk of extended downtime in manufacturing or the risk of lost sales in wholesale/retail. However, this is not true. For this to be true you must believe that the existing holdings are as lean as they […]

In inventory management items often get ordered in an ‘economic’ order quantity so that the cost per item is at a minimum. This is seen to be economic because the subsequent issue cost of the item is reduced and the business, operational or project budget therefore records a lower cost. The term ‘economic order quantity’ […]

Spare parts inventory reduction has been a major focus of supply chain improvement initiatives for many years and success requires the application of both inventory fundamentals and good practice process. However, it is the encouragement of appropriate spare parts management behaviors that delivers truly sustainable results. And it is in the area of appropriate behaviors, […]