Spare Parts Management: Partner with procurement
Why isn’t procurement treated as a partner in spare-parts management?
hen it comes to the management of spare parts used for maintenance and operations support, the procurement team is often treated as an outsider, a service provider, rather than a partner in ensuring the objective of maintaining operational capacity is achieved. In my experience, this approach is a drag on both efficiency and effectiveness, often resulting in the waste of both time and money.
Consider if any of these situations sound familiar:
• A vendor makes an offer of a discount if the company buys a bulk quantity of an item. The procurement person sees the item is used regularly and considers this a good deal to save on the unit cost of the item. At the same time, the maintenance team plans to discontinue use of the item, as it knows it is about to be superseded. The bulk items arrive in the storeroom, resulting in an overstock of that item, and the next day (or week or month) the maintenance team create a new item to replace the item just purchased. In the end, the bulk purchase is wasted and the items are never used.
• There is a plant outage and the required part is not in the storeroom because it was never created as an inventory item. The maintenance supervisor puts the procurement team under pressure to source the item ASAP. They drop everything, identify the part, find a vendor and pay exorbitant costs to expedite delivery. Meanwhile, a maintenance team member recalls they have a spare in a “squirrel store” in the corner of the workshop. The plant is repaired and production commences. But no one tells the procurement person who spends the whole day finding and sourcing the part. When he calls the maintenance supervisor to say that the part is on the way she tells him not to worry because they found one, but thanks anyway. How do you think that the procurement person will react next time there is an emergency?
• An inventory item is created with a unit of measure (UOM) listed as “boxes.” A purchase requisition is raised to buy more items, but the originator mistakenly thinks that the UOM is individual units and so inadvertently requests many more than they need. Not knowing how or where the item is to be used, the procurement person places the order. When the item is delivered and there is 10, 20 or 100 times the expected quantity, the blame game begins. The excess items then languish unneeded or the procurement team spends more time and energy arranging the return of the unused items.
What each of these examples has in common is that in each case everyone thought they were doing the right thing. The only missing element was the inclusion of procurement as a partner in the spare parts process and with that improved knowledge and communication.
Think about this for your own organization, isn’t it time that procurement was treated as a partner in spare-parts management?