7 Tips for Managing and Optimizing Spare Parts Inventory
April 21, 2022
Maintaining a quality spare parts inventory management system is essential for the growth of any manufacturer or support team. Keep in mind that substandard management of spare parts control can set about inefficient storage of inventory and cause scarcity of spare parts when you require them the most. This leads to unexpected downtime and unpredictable extra costs. Therefore, investing in an optimized spare parts inventory management system is better for the growth of the overall business. This blog will centre around all the essential hacks and tips to manage and optimize your spare parts inventory. Let's jump straight to it!
An accurate parts inventory system allows the parts department to be more proactive and responsive. Here are seven spare parts inventory management best practices for managing parts inventory more effectively:
1. Select a Method for Labeling key elements
It's probably the most obvious point, but it's one of the essential details that need to be emphasized. Label every component distinctly so that it is easy to classify. Well, there are two common ways to categorize your inventory and label it: the ABC analysis and XYZ analysis.
It has been said by the AICPA ( Association of International Certified Professional Accountants) board that ABC analysis is adopted for categorizing inventory depending upon the consumption value of the item. Here, the consumption value is depicted as the total value of a commodity consumed over a particular period.
Whereas the XYZ analysis is adopted to label inventory products depending on the product's demand.
2. Stay updated with your Bill of Materials
BOM ( Bill of materials ) is the secret sauce for creating a product that's far ahead of its competitors. Therefore, it's absolutely critical to keep your BOM updated to prevent any form of inventory faults or spare parts inadequacy and also to be prepared for any maintenance or servicing. Analyze your BOM on a regular basis to add or remove elements from your inventory as and when necessary.
3. Optimize a standard work order process
Manufacturers tend to stock additional spare parts in an occasionally used portion of their warehouse without making an effort to classify and label them in the inventory control system. Sometimes, employees can also forget to file an official work order before pulling out an item from the inventory to mend or service the equipment.
Few mistakes like this can cause faults in your spare parts inventory records, which could pose a threat down the lane. Therefore, it's vital to implement and exercise a standard work order process for better accuracy. One can do certain simple things to make the work order process way more efficient. Try introducing automated systems to reduce manual paperwork, invest your time towards better employee training and put pressure on the consequences of failing to file a formal work order. These are some of the key elements one can try and work out.
4. Emphasize inventory control while training employees
Expecting your employees to comply with all the procedures and functions related to spare parts inventory management is not fair if they weren't given adequate training in the first place. So, it is pretty essential that you invest in complete and calculative inventory management training for every employee of your company who deals with or is related to working with spare parts in some way or the other. You could start with simple online courses, seminars and various training programs. Ensure that you select a program that encapsulates standard processes and procedures of inventory control, along with any other additional technology your business uses to develop and manage your spare parts inventory management.
5. Execute cycle counts routinely
Performing cycle counts repetitively is one of the better ways to maintain inventory accuracy in your warehouse around the year. In addition, cycle counts are sought to be more beneficial than overall inventory counts because they don't inhibit any form of regular business operations, meaning they can be operated on a normal premise.
These are some of the critical parameters to check out for a firm cycle count:
Check out for the spare parts inventory group that needs a cycle count? It can be A, B or C.
How many stick keeping units do you require to perform cycle count?
Who will be the person held accountable for the cycle count?
The frequency in which you are required to perform cycle counts for the inventory group in question?
6. Make your spare parts Easily available
Make sure that it is convenient for your employees to submit work orders and withdraw spare parts from warehouse shelves by conserving spare parts within an in-house inventory. With a clear depiction of where every spare of yours is located within your warehouse, you achieve better overall inventory accuracy.
7. Invest in a proper computerized maintenance management system
A quality CMMS ( computerized maintenance management system ) can make the implementation of spare parts management so much easier. CMMS can make all of your above hacks easier and helps you to analyze spare parts to develop reorder points and other aspects. The actual challenge is to find a CMMS that can perform all of the functions.
With an A-grade CMMS, you can enhance your spare parts inventory turn time, decrease any form of inventory inaccuracies and failures, prevent delay of services due to lack of inventory, reduce your overall inventory costs, etc.
In the end, we all want to keep our spare parts inventory in a good state. This is to be able to have easy access to the parts we need when we need them. On the other hand, there is nothing more exasperating than having to search for your spare parts. We have listed some of the best practices for managing your spare parts inventory and the means by which you can achieve this. We hope that you implement and benefit the most from it. Good luck!
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