Operating assets should have constant visibility on what equipment is held in stock, and confidence that the information in their inventory list is up to date and accurate in order to adhere to a streamlined and cost effective maintenance management regime.
However, this isn’t always possible. During day-to-day operations, the spares inventory is subject to rapid change, and when this change is not managed and maintained correctly, it can lead to unnecessary expenditure.
This can be caused by purchasing and storing parts that may already be in the warehouse, delayed access to critical spares and wasting time searching for parts that are unavailable. All of this can lead to increased risk of equipment outage or extended periods of downtime.
Our consultants have worked closely with clients to cleanse, enrich and maintain an optimized spares inventory based on risk, cost and probability calculations - a critical element to efficient asset management, but not a simple and straightforward task to complete and sustain.
To kick start your journey to achieving inventory excellence, our Materials Manager, Iain Wood, has identified and shared some key considerations and quick wins that should be considered.
1. Conduct a high risk cost analysis on the top 10 critical equipment
"Access to spares required for maintenance or contingency of high critical equipment can incur extreme penalties for a business, including loss of production, reputational damage and safety related incidents, if they are not available when you need them.
"In a perfect world, a risk, cost and likelihood analysis to determine the min/max holding for critical spares should be completed on all high critical equipment, but many companies do not have the luxury of time or budget to allocate to this exercise.
"Due to the significance of benefits associated with having immediate access to production critical spares, we would recommend prioritizing the analysis of the top 10 equipment types within this category in order to gain the most return on investment (ROI) and reduce the impacts associated with equipment outage of such critical assets."
2. Enrich the Data
"We often see poorly populated or missing data in our clients' spares inventory list. The reasons for this range from lack of time to input and update information, to insufficient understanding of the minimum requirements for information that needs to be inputted.
"Developing a minimum data standard, ruleset and process is one way to help overcome the effects associated with insufficient data. This standard will define the information which must be populated for all equipment in the warehouse. In having a clear set of compulsory data input requirements, it will drive the inventory updater to populate meaningful information that ensures:
- Equipment can be located quickly and efficiently
- The exact amount of equipment being held is known
- There is a clear understanding of the storage requirements
"Although a data cleansing and enriching exercise cannot be considered as a quick win, the development of a standard is key, and something that can be applied to the work management process going forward, that will contribute to good quality reliable data in your spares inventory."
3. Split Roles and Responsibilities
"Warehouse technicians are often responsible for an extensive task list associated with “housekeeping”. These generally comprise of verification checks, preservation maintenance, pre-operational preparation of spares, restocking of consumables, packing of tools, etc.
"In addition to this, warehouse technicians are usually responsible for updating the spares inventory, which is a full time job on its own and usually falls by the wayside due to other critical tasks being prioritized.
"Therefore, having a fully dedicated and trained warehouse coordinator, whose sole role is to update and maintain the inventory list, will be extremely beneficial to your team. Not only will this provide you with a focused approach to ensuring you have an up to date inventory, but it will also enable the warehouse technicians to focus on what they were employed to do."
"Having an optimized, cleansed and data-rich inventory will allow you to:
- Reduce risk and impacts associated with equipment downtime through efficient access to critical spares
- Enable spares to be sourced quickly and efficiently from the warehouses
- Reduce the value of your spares holding, by removing excessive part ordering and gaining capital back into your business
"There is no doubt that the development of an optimized spares management process takes dedication, discipline and effort. However, we must remember that even small changes will make an impact and put you one step closer to achieving efficient asset and maintenance management."