What if I told you that it is probable that one in two spare parts manager reading this post work at companies that don’t apply even the most basic principles for managing their spare parts inventory?
Would that be surprising? Well, that’s the conclusion that I draw from reading a recent report on MRO best practices.
One feature of the report is that it includes statistics from a survey of companies. It is not clear (at least to me) how many were surveyed or what industry they are in but, having said that, two data points caught my eye.
Spare Parts Availability
First, for nearly half of companies in the survey, the required parts are only available 80% of the time or less. Wow! That means that one out of five times there is a part request, the required parts are not available. This is surely not acceptable and yet these companies clearly allow this to happen.
Worse than this, what if the maintenance task requires a set of 3 parts and each part is only available 80% of the time? In this case, the complete set of parts would only be available half the time. Which means that half of maintenance tasks would need to be delayed. What a planning and scheduling nightmare!
In my experience, there may be several causes of this:
- Did Maintenance Request the Part to be Stocked?
- Is There a Systems Issue?
- The Holding Levels Are Wrong
I was once involved in a review where the maintenance people complained about parts not being available but we found that the parts were not even nominated to be held as spares. Doh! It’s hard to complain about parts not being held if maintenance never asked for the parts to be held in the first place.
In another review I completed, there was a systems issue where the parts usage was not recorded for up to a month. This meant that the company’s expensive ERP showed, for weeks at a time, parts levels that were wrong. No wonder that the maintenance team complained about inaccurate data. In this case, everyone involved was doing exactly what their internal process said they should do – it was the process that was wrong.
This happens, of course, but my experience is that when companies set their holding levels they tend to err on the side of overstocking, not understocking. Any time that understocking becomes apparent it is corrected (and usually overcorrected!)
Which brings me to the second data point that caught my eye.
Setting Spare Parts Holding Levels
According to this survey, only about 30% of companies actually set holding levels for more than 95% of their items. And a third set holding levels for only up to 80% of their inventory. (This may or may not be a finding related to the first issue above.)
Come on now! Surely this is so basic as to not need discussion: If you are not setting holding levels for your spare parts inventory then you are not managing inventory, you are managing storage. It is as simple as that.
Is It Time to Re-Train Your Spare Parts Manager?
Really, how can anyone who is serious about effective operational management, and the effective and efficient execution of maintenance work, not take the most basic steps for managing the resources necessary to execute that work?
Now think about this: from this survey, the percentage of companies not doing the most basic of tasks for spare parts management is so high that maybe only one of every two people that read this post work at companies that are doing the right thing. Therefore, there is a good chance that your company is making these mistakes with your spare parts inventory management.
If that is the case, then maybe that means that it is time to re-train your spare parts manager!
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Posted by: Phillip Slater