In almost every endeavour it is difficult to determine what constitutes the ”best practice,” but this is particularly true in specialist areas such as spare parts management. Whether your key issue is reducing working capital or ensuring parts availability (or both), if you don’t understand where you stand right now it is impossible to work toward achieving best practice.
For many companies, developing a spare parts management system is bit like starting a journey without knowing where they are or where they are going. All movement looks like progress.
The following stages of excellence ladder has been developed to help you identify both where you are now and what you need to do to reach the next level of performance.
LEVEL 5 – Leader: The top rung of the ladder. Leaders will already have in place a robust and rigorous approach to spare-parts inventory management. Your challenge, therefore, is to focus your efforts on continuous improvement and training to ensure your success is not due to the discipline of one or two key individuals but rather the culture around spare parts management.
LEVEL 4 – Manager: At this level you have not yet fully developed and implemented inventory management policies and procedures or engaged fully with all those involved in inventory management decision making and execution. Your next steps should be to focus on the completeness of your policies, procedures and processes and then training all personnel in the correct execution and implementation of these.
LEVEL 3 – Administrator: As an administrator you have a very transactional approach to spare parts inventory management. Administrators ensure the bookkeeping is essentially correct but usually are not very proactive in ensuring stock levels are within their set parameters. Administrators often do well in one or two areas and from that convince themselves everything is OK. You will have lots to do to improve, so you must decide where to prioritize your improvement efforts.
LEVEL 2 – Band-Aider: As the name suggests a Band-Aider spends time applying corrective fixes to problems and issues that arise but not sufficient time and effort to implementing a lasting repair. Users generally have a low level of trust in the system and it almost goes without saying that they will not be engaged or accountable for their decisions affecting inventory levels. You need to begin building trust in the system by implementing some lasting changes that address the frustrations of your users. This should provide the springboard to lift you to higher performance.
LEVEL 1 – Firefighter: This is the lowest rung, so let’s be honest here: You have a lot of work to do, not just to reach the best practice but also to establish some control over your spare parts inventory. Start by working on storeroom administration and control, then policy and procedures, then inventory management process.You may be spending most of your time, energy and money expediting emergency orders, so you will need to ensure you get the right level of management support to allocate the time and resources get some momentum in your drive to best practice.
Identifying your position on our stages of excellence is the easy part. The real work starts when you decide you are going to develop your systems to move up the ladder.