3 steps to take control of spare parts inventory
Here is the bottom line: You want to take control of spare parts inventory so you can be confident you have the parts you need, when you need them, without excess expenditure.
Well the good news is that achieving that goal is simple. Here are three steps you can implement to take control of spare parts inventory.
1: Develop a stocking policy
Boring, but true.
The first step is to develop a policy that guides decision-making on whether to stock an item and how many to stock.
The first instinct of many who start a program to take control of spare parts inventory is to begin taking things out. They find the obvious outliers and start making changes.
This feels good, but it is a false economy. It is short-term thinking that ultimately makes matters worse.
What they are doing is making changes to the inventory without making changes to the way the inventory is managed.
Creating a policy (and telling everyone about it) is the necessary first step because it guides all actions that follow.
2: Develop a simple system for measuring progress and reporting to the right people.
I know, right; still boring.
When someone says, “Hey, here’s an idea: Before setting out on a mission to take control of spare parts inventory, why not develop a simple system for measuring progress and reporting to the right people.”
Hardly the dynamic answer the vice president was looking for.
Well, most companies do something. But most of them don’t do it very well, or very completely. Or they make it way too complicated. Or they generate numbers and don’t report them to the right people. Or, worst of all, they don’t take corrective action when the numbers tell them to.
3: Stop cherry-picking ideas
One way to ensure ongoing problems with your spare parts inventory is to take a “latest bright idea” approach to addressing the issue.
Here’s how that works: Someone decides they need to focus on fast-moving items. When that doesn’t work, six months later, it’s slow-moving items. When that doesn’t work, it is critical items. And so on.
Companies keep chasing their tails when trying to take control of spare parts inventory because a simple approach that works appears to be, well, too simple.
Simple but not easy
At its core, spare parts inventory management is simple, but not easy. Sometimes it seems too simple and people go looking for complications. In doing so they miss out on achieving their goals. That is the “not easy” part. Spare parts inventory management requires the discipline of simplicity but with that there is a need for rigor in execution. Do the simple things well and all else will follow. By implementing these three steps you will start to take control of your spare parts inventory. NP