One question that I get asked a lot is: who should run the spare parts storeroom?
The question is often asked out of frustration due to a perceived lack of service or frustration borne from overstocking. I suspect that the answer most people seek is that they should run the storeroom because their frustration tells them that whoever is running it now must be the wrong person!
So, let’s put the emotion of frustration aside and look at this rationally.
There are basically three key functions to consider:
- Deciding what spares to hold and how many
- Managing the working capital investment of the company
- Managing the storeroom processes and activities
The key question therefore is not, ‘who should run the storeroom?’ but how do we align the responsibilities for these functions. It is my opinion that the misalignment of these responsibilities is the number one reason why companies hold more inventory than they really need.
So my answer to this question is quite simple: whoever decides what spares to hold and how many MUST also be accountable for the outcomes from their decisions – both the working capital and operational (downtime) outcomes. Without the balancing constraint of working capital accountability, spare parts inventories get overstocked. Without consideration of the operational needs, companies can be left short of the items that they really need.
The third function, managing the storeroom processes and activities, is completely separate from deciding what to hold and how many and, in my view it doesn’t much matter whether or not the oversight of this function is connected to the other decision makers . This function’s role is to ensure that the predetermined stocking levels are maintained, that overstocks are proactively managed down, that obsolete items identified and dealt with, that stock counts are accurate and so on. This is not just a matter of doing the admin associated with recording the ins and outs. Storeroom management requires a skill set and discipline that is completely different from the other two functions mentioned above. So, as long as the work is carried out with rigor and discipline, to me it doesn’t much matter who oversees the work.
So, who should run your spare parts storeroom? As long as the responsibility comes with accountability and the right KPIs, it doesn’t much matter.
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