Parts Inventory Management Best Practices
Spare parts inventory management and standard inventory management are similar in concept, except the former requires a deeper consideration concerning costs to ensure enhanced accuracy and overall operational efficiency.
In short, the difference between spare parts inventory management and standard inventory management is that parts management refers to the process of service providers delivering the correct parts, in the correct quantity, at the correct time, at the correct quality, at the lowest costs to an organization.
The importance of spare parts inventory management can’t be understated. As part of the supply chain, proper spare parts management helps mitigate the potential for equipment unavailability due to increased downtime, resource inefficiencies caused by schedule interruptions, and improve the availability of working capital.
Businesses ranging in size and industry can save a significant amount of money and boost efficiency by incorporating parts inventory management’s best practices into their operational processes.
Here are 7 parts inventory management best practices you can use.
Identifying all parts
An example of identifying spare parts is when equipment is going to be down due to a major overhaul, and you’re considering purchasing several parts for one-time use. When the required parts for maintaining the newly acquired asset are properly identified, once the overhaul is completed, unused parts can be inventoried for future use (i.e., other equipment in your factory could use those spare parts). These parts should be added to the inventory control system and put into parts inventory on the enterprise asset management and computerized maintenance management systems (EAMS/CMMS).
Classify Spare Parts
As important as it is to identify all spare parts, it is just as important to classify them based on their criticality. This classification will help organizations better understand and define an optimal safety stock that encompasses having the right parts, at the right time, at the lowest cost to an organization.
Managing Bill of Materials (BOM)
Bill of Materials, also known as product structure, refers to a list of raw materials, parts, sub-assemblies, intermediate assemblies, and the amounts of each needed to manufacture a product. Having accurate BOMs makes the process of ordering parts and generating work orders more efficient by streamlining in-house and third-party communications and supporting scheduled preventive maintenance (PM) for spare parts.
Limit spare parts warehouse inventory access
Limiting access to spare parts inventory is considered a security measure, as it prevents anyone without authorization from acquiring spare parts. This practice ensures/enhances inventory accuracy and could be implemented with the utilization of badges to grant/deny workers access to these areas.
Centralize and consolidate spare parts
This practice falls under security measures as well. Not only does keeping all of your spare parts in one, centralized and consolidated location, such as a warehouse, add efficiency and enhanced security to your operational process, but it also makes the facilitation of large assets easier to control and maintain, thus improving inventory accuracy.
Cycle counting refers to an auditing practice, where different portions of your inventories are periodically counted or manually checked, continuously, based on an ABC inventory classification:
A: Checking 10% of line items, offers 65% of turnover.
B: Checking 20% of line items, offers 25% of turnover.
C: Checking 70% of line items, offers 10% of turnover.
Conclusion: Parts Inventory Management Best Practices
Before you solidify your spare parts management process, be sure that you are making quality decisions based on accurate information. The process of accurate decision-making entails basing your decisions on KPI’s and reports, detailing spare parts management data such as resource allocation and budget.