Spare Parts Inventory Management

Properly managing spare parts inventory can result in considerable savings for a company. First off, physical stocking of parts can be reduced by properly accounting for existing inventory and setting proper stocking levels and replenishment actions. Secondly, having the proper spare part available when required will greatly reduce production downtime and equipment availability.

Spare parts inventory (MRO Spares) control is very different from product inventory control. Production inventory is all about having raw materials available when needed from approved vendors to meet production schedules. In the perfect world, production inventory is only stocked when needed for the schedule. In the case of spare parts, there are two situations; parts needed to support PM or project schedules and parts needed to deal with unplanned equipment failures.

Identifying What Should be Stocked

The first step in controlling spare parts inventory is to determine what parts should be stocked and at what levels. These calculations take into account expected failure rates of parts, availability and lead times for parts and the impact on production schedules if a part is needed and not in stock. Recommended spare parts stocking levels from equipment vendors can be used, as well as your facility’s history of usage rates, to determine what needs to be stocked. Economic Reorder Calculations can then be used to determine how best to set your reorder levels.

Linking Parts to Equipment

Parts lists are invaluable in daily operations of maintenance organizations and storeroom management. Maintenance personnel need to know quickly the availability of spare parts when needed, and storeroom managers need to know where parts are used to help determine stocking levels.

Stocked vs Non-Stocked Inventory

GP MaTe supports the identification of both stocked and non-stocked inventory items. In the case of stocked items, when needed, the item can be found on the shelf, and when used, replenishment calculations are triggered to determine if the item needs to be reordered.

For a non-stock item, the procurement information is maintained by the system, including preferred and alternative vendors, their part numbers and pricing is available to quickly support the ordering of a part when needed.

Physical Inventory vs Cycle Counting

Controlling one’s inventory requires periodic verification that the stock on the shelf matches the information in the EAMS. Human errors occur where parts are misidentified when issued or returned or parts are taken in emergencies and are not properly accounted. GP MaTe supports two approaches to keeping stock information up to date.

A Physical inventory is typically taken once a year, where all inventory is counted and compared to the EAMS information.

A more useful approach however is to use GP MaTe to schedule Cycle Counts. With cycle counts, you can schedule weekly count lists of select locations or items to be performed by the storeroom personnel when they are not busy with other activities. In this way, you can break down the large, once a year task into 52 smaller tasks. You can also identify different count schedules for more critical spares, so that high priced, critical components can be counted every three months instead of once a year.

Usage Rates and Stock-Outs

GP MaTe will track all usage of spare parts, stocked and non-stocked. This information is invaluable in making better stocking decisions. In addition, GP MaTe will flag stock out situations, which occur when a part is needed but is not available, so future stocking decisions can be adjusted if warranted.