Learn About the Impact on Your Spare Parts Inventory
In this 2 Minute Tutorial Phillip Slater discusses the two big secrets of spare parts management, the impact these secrets have on your spare parts inventory and how awareness of these secrets will help you make better spare parts management decisions.
Video Transcription: The Two Big Secrets of Spare Parts Management
Okay, so let’s talk about the big, uncomfortable secrets relating to spare parts inventory.
Welcome to this two minute tutorial. My name is Phillip Slater, and I’m the founder at SparePartsKnowHow.com.
One of the little acknowledged issues with spare parts management is that often, companies don’t know what they hold or why they hold it.
Now, how can that be, you say, because surely they have some fantastic ERP system that’s helping them track their inventory and what they’ve got, so surely they must know what they hold.
Well, the system might know what they hold, but how can one individual or any group of individuals know all of the items that might be in inventory?
And I see this a lot. I hear companies say, “Oh, we did a review, and we realized we’re holding X, we’re holding Y.” So, they don’t necessarily know what they hold.
Now the other thing, the other aspect of spare parts management that seems to be fairly universally true, is that people don’t know why they hold the items that they hold, because they don’t put that in their definitions.
They don’t document the reasons that decisions were made in the past, so the person that made that decision may well have moved on. They’ve been promoted, they’ve moved to a different part of the company, or they’ve moved to a completely different company, so that information is lost to the organization, and this leads us to the two big, uncomfortable secrets about spare parts management.
Now, the first uncomfortable secret is that your spare parts inventory is in worse shape than you think it is, because if you don’t really know what you’ve got and why you’ve got it, well, then, it can’t be in great shape.
Now, you may say, “Well, what does it matter about those things, because we’ve got the parts we need when we need them?”
That’s great, if your only focus is on the operational up-time side.
But, if you’re also thinking about how much money you’ve spent stocking your inventory, and you continue to spend in restocking your inventory, then that’s not a good enough answer.
Which leads us to the second big, uncomfortable secret, and that is this; that your team don’t know how to fix the first problem.
You see, if they did know how to fix it, they’d be fixing it. You’d be allocating the resources and the time and the energy to correct the situation so you know what you hold and, most importantly, why you hold it, then you’ll be able to make better decisions.
My name is Phillip Slater. Thanks for watching this two-minute tutorial.
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Posted by: Phillip Slater