The invisible hand of spare parts management
In December 1958, Leonard Read published an essay titled “I, Pencil: My Family Tree as Told to Leonard E Read.” This essay was written from the point of view of the pencil and details the complexity and range of functions and processes required to create the seemingly simple object of a pencil.
These functions and processes start with the growing and harvesting of the wood, the development of the “lead” (which is a complex process involving graphite, clay, water and other elements), through to the logistics and planning to bring everything together and then deliver the pencil to the user. The essay examines the absence of any single mastermind “forcibly dictating those countless actions,” yet the pencil comes into being and pencils have been used for hundreds of years.
The concept of the invisible hand could be applied to almost any modern item but in this context let’s think about spare parts. As with the premise of the essay, it is impossible to believe any one person has the know-how required to control or manage the entire process involved in the life cycle of a spare part.
Consider just the processes and management required to get a spare part from the wholesale distributer to a company, through to application and finally end-of-life disposal. Except in the most rudimentary organizations this is still too complex for any one person to understand all of the steps and processes involved.
In an organization of any reasonable size and complexity, these activities will involve a wide range of personnel over a long period of time. Many of these people will never know each other. Even those who work at the same company at the same time may never meet. They may never discuss their actions relating to the spare parts and their role in its journey. And so this seemingly simple task of procuring and managing a spare part is not only more complex than many people realize, it also involves the coordination of the decisions and actions of people who will never meet.
As in the essay, there is no mastermind that oversees the entire spare parts management process so perhaps this is not only why the process fails so often but also why those failures are not so readily recognized by those involved in the system.
System failures will be noticed at some point by someone who is part of the process but often not before the failure becomes an additional expense for the company. More rarely, because of the “silo” approach of spare parts management, will any one person see the pattern of these failures and understand the cumulative effect on a company.
That is why companies need to address the key issues confronting people during the life cycle of spare parts inventory management, from establishing a system for management, through to the physical management, through to final disposal. NP
This article is an edited extract from Phillip Slater’s latest book, “Spare Parts Inventory Management.” To learn more, visit PhillipSlater.com.