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Tips On Effectively Managing and Optimizing Spare Parts Inventory
Friday, 20 August 2021

Inventory control is critical to avoid the risk of losing customers because of a lack of goods and missing items. Floppy policies regarding spare parts inventory management can lead to high storage costs and hamper maintenance while lengthening downtime when essential items are unavailable. This article will discuss some tips on how to manage and optimize spare parts inventory.

Inventory

Update Your Bill of Materials

 
A business’ bill of materials is a winning formula for manufacturing end products that are years ahead of their competition. Therefore, it is vital to keep the bill for materials up to date to prevent inaccuracies in the inventory and shortages when dealing with spare parts. Moreover, it helps in the better planning of preventative maintenance and servicing. You should ensure that you review your bill of materials regularly to check which parts need to be removed or added.
 

Regularly Perform Cycle Counts

 
One of the best ways to ensure that your inventory is accurate in the warehouse is by conducting cycle counts all year. Cycle counts offer more convenience compared to total inventory counts since they do not affect normal business operations. This means that you can perform them regularly.
 
To ensure an effective cycle count, set these parameters:
  • Determine the number of SKUs you require to cycle count
  • The spare parts inventory group you should cycle count
  • Who is responsible for that cycle count?
  • The number of people responsible for the cycle count
  • The frequency of performing the cycle counts for that inventory group
  • Regularly review the critical spare parts
 
Your equipment and priorities may change over time. Therefore, you should consider raising the priority of a part instead of reducing it. Nonetheless, you must downgrade some spare parts since they may no longer be critical to operations. It is essential to have a systematic assessment process with a concise criterion as the manufacturing environment changes can be reflected in a CMMS for managing spare parts.
 

Identify Critical Components Using the ABC And XYZ Analysis

 
As a maintenance manager, you should determine the most critical assets and the parts you should have on hand to keep the assets running.
 
Once you make a list of the essential spare parts, break them into priority categories using ABC and XYZ analysis methods. The ABC analysis requires you to review the inventory items and label them with an A, B, or C. The XYZ analysis focuses more on costs but works almost the same way as the ABC. Your goal is to get a concise breakdown of the frequently used parts and create a cost-effective plan to replenish them. With a good plan, you will avoid a stockout (when necessary spare parts are unavailable.)
 

Calculating risks

 
All realistic maintenance managers audit that you cannot avoid asset failures entirely. The leading cause of unplanned breakdowns is old age. However, you can calculate the downtime risk for every asset and adequately stock up for the high-risk ones. The most effective way of assessing risk is by conducting a Failure Mode and Effects Analysis.
 
 
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