Effective spare parts inventory management is critical for any maintenance strategy. It allows organizations to remain at peak performance, meet consumer demands, and improve productivity and asset longevity by reducing repair and maintenance time. And the key is ensuring the parts maintenance technicians need are always ready and available when needed. Let&#;s learn how.
What is parts inventory management?
Parts inventory management is the process organizations use to keep track of their parts inventory, whether to meet maintenance or consumer purchasing demands. This process should be well planned and make it easy for manufacturing and maintenance teams to quickly and easily find the necessary parts to make repairs, manufacture products, and complete their tasks.
Why is good parts inventory management important?
An effective parts inventory management strategy is an important part of manufacturing and maintenance management.
Proactive maintenance activities often require parts&#;like cartridges, lightbulbs, belts, gears, and more&#;to be replaced on a regular schedule to improve asset longevity and reduce the frequency of breakdowns. Manufacturing equipment and machinery with multiple parts may require occasional replacement parts to remain functional and meet quality control standards.
A disorganized or low inventory of spare parts makes it difficult to keep up with important maintenance tasks and customer demand, impacting productivity and asset performance.
Spare parts inventory management best practices
It&#;s not enough to have a storage room, a handwritten list, or even spreadsheets of available parts. Maintenance and manufacturing teams should have a well-organized plan in place to manage and utilize spare parts as needed.
Organizations should adhere to the following best practices to create the most advantageous spare parts management system.
Systematically identify and organize all parts
The first step in implementing any parts inventory management system is to identify and organize all parts currently in your organization&#;s inventory. After you&#;ve identified all existing parts, you can begin creating a logical organization system.
Take a top-down approach in the storage room. Organize shelves and bins and make sure each part&#;s location is intuitive and has a purpose. For instance, more frequently used parts can be placed on a lower shelf near the storage room entrance, where employees can access them quickly. Also, consider separating product parts from spare parts used in maintenance activities.
Once all parts are organized and identified, create a list (ideally digital) to keep track of inventory usage and make it easier to order parts as needed.
Optimize and manage the Bill of Materials (BOM)
Companies use a bill of materials to itemize their spare parts, raw materials, and any other necessary components for manufacturing a product or maintaining important assets. The BOM should lay out usage instructions for each part&#;i.e., how frequently the part is used, how often it needs replacing, and how many of each part should be in the inventory at all times.
It is critical that companies optimize their BOMs by ensuring all information is accurate and up to date, and then continue managing the BOM to ensure it stays that way.
Develop Standard Operating Procedures (SOPs)
Standard operating procedures help maintain consistency when many people perform similar duties or access the same parts and assets. SOPs in parts inventory management will inform employees how to update inventory lists as parts are used, order new parts, review the BOM, organize the storage room, and more.
These SOPs will streamline parts inventory management, making these processes second nature and contributing to operational efficiency within your organization.
Adopt and enforce security measures
Use security measures to better track inventory levels. Consider limiting access to your spare parts inventory to essential personnel (those who need access to it), and use barcode scanning features to track the parts and their locations.
Many companies adopt a parts counter to ensure only those who need access to the parts can use them. These security measures help prevent missing parts and ensure inventory accuracy.
Centralize parts storage
While it&#;s important to keep limited access to spare parts inventory, it is still wise to keep parts storage centralized within the facility for parts department employees. Replacement parts should be easily accessible and quick to find when needed.
Adopt proper inventory control measures
Inventory control involves tracking inventory levels and ensuring spare parts are available when needed. Consider adopting a cloud-based inventory control system that allows you to monitor parts online.
Such systems typically have automated processes that allow employees to scan parts while updating inventory lists simultaneously.
Embrace proactive maintenance strategies
Proactive maintenance strategies, like preventive maintenance, allow organizations to address issues before they arise, including managing spare parts. Proactive maintenance in inventory management might take the form of the following tasks:
Ensuring critical parts are always in stock
Keeping parts organized
Updating the BOM regularly
Use data to forecast demands and account for lead times
Usage data and a lead time reference can help organizations forecast demand for parts, both in production and for maintenance purposes. Predictive maintenance, using data sensors and monitors, offers a proactive solution to stay ahead of maintenance demands and prevent unplanned downtime.
Establishing a comprehensive lead time reference is a necessary component of parts procurement. Companies should plan for critical parts that have longer lead times. Ensuring access to reliable local suppliers who can deliver purchase orders on demand can significantly improve inventory management strategies.
Calculate risk
Every asset has a potential risk of unplanned downtime. For a proactive inventory management strategy, calculate the risk for each asset and stock up on parts for equipment that is more likely to fail.
Two critical metrics can help you here: Mean Time To Repair (MTTR) and Mean Time Between Failure (MTBF). Calculating these metrics can help you better anticipate when an asset will fail so maintenance teams can replace parts before a breakdown occurs.
Use a CMMS
Maintenance and parts inventory management software is an important step that industrial and manufacturing companies should work towards implementing. That&#;s where a Computerized Maintenance Management System (CMMS) comes into play.
The capabilities of this solution help organizations like yours keep up with inventory demand:
Automated
work order management
Centralized access to inventory lists
Cloud-based inventory management
Data reports on parts usage
KF-SMT contains other products and information you need, so please check it out.
Notifications when parts need replaced
Stay competitive by investing in a CMMS for your organization.
Invest in automation
Inventory management is a great area to invest in automation. Automated solutions can assist with work orders, inventory tracking, maintenance reports, ordering parts, and more. The best part is, this kind of automation doesn&#;t replace human jobs; it streamlines them.
Automated solutions, often found within CMMS capabilities, make maintenance and manufacturing tasks easier, assist in avoiding overstocking, reduce risk of human error, and improve operational efficiency.
Train employees
Employ training for any new inventory management practices you implement, and engage in training regularly. It is essential that all personnel are on the same page to ensure consistency and effective implementation of any inventory management strategies.
Start digitizing your inventory management strategy
Limble CMMS offers solutions to help companies convert their parts inventory management to a digital platform. Our solution enables automation, advanced communication, and seamless integrations with systems that you use every day.
Contact us to learn more, or get started with our free demo today.
Managing spare part inventory has never been more crucial.
Post-pandemic, we are still reeling from supply-chain vulnerabilities in companies worldwide. As reported by Deloitte, businesses must cast wider partnership nets to meet increasing consumer demands for quick deliveries moving forward.
Supply managers can&#;t always expect to receive what they need when they need it and from a single supplier without delays. But spare part inventory management has recently come to the forefront of manufacturing conversations for another reason.
U.S. and European lawmakers are increasingly pressuring manufacturers to simplify their product repair processes. As reported by The New York Times, the &#;right to repair&#; movement would &#;require companies to make their parts, tools, and information available to consumers and repair shops to keep devices from ending up in the scrap heap.&#;
Spare parts inventory management is crucial because replacing parts accounts for a significant component of product life-cycle costs. According to Spare Parts Inventory Management: A Literature Review, the value of spare parts annually consumed by a piece of equipment amounts to nearly 2.5 percent of its original purchasing price.
For these reasons, we&#;re sharing our best tips for streamlining spare parts inventory management. We&#;ll also discuss how spare parts inventory management software simplifies the process.
Even before the pandemic and the &#;right to repair,&#; businesses sought new ways to reduce operating expenses. Global events have made it more difficult for organizations to stock up on spare parts, making it harder to cut costs.
With this in mind, maintenance managers need to set up systems to effectively monitor parts&#; usage, optimize parts&#; spending, and develop maintenance repair hierarchies. Before we delve into that, let&#;s make sure we&#;re on the same page about what we mean by &#;spare part inventory.&#;
&#;The key to automated, predictive, and prescriptive operations . . . lies in the interconnectivity of digital tools, physical infrastructure, and their underlying data streams.&#;
Deloitte
Spare part inventory refers to a list of stock items that maintenance technicians use to replace failed equipment parts. Manufacturing facilities keep spare part supplies&#;like belts, motors, gears, and grease&#;on hand so they can fix equipment failures in minutes as opposed to days, weeks, or months.
However, spare part inventory also can include small items like printer cartridges, batteries, and light bulbs. Maintenance departments or general operational departments typically store spare parts in stockrooms on location.
Before we move on, let&#;s address a common source of confusion: do the terms stock parts and spare parts refer to the same thing? Well, not exactly.
A spare part refers to an extra part of a machine kept for replacement or use in an emergency. Notably, businesses use spare parts solely for maintenance and repair.
A stock part refers to items kept to produce deliverables for sale. In other words, stock parts eventually leave facilities in the form of finished products.
In addition to product materials, stock parts can include personal protective equipment (PPE), packaging materials, and office supplies. While spare parts depend on maintenance activities, stock parts are contingent on planned production output.
Unfortunately, feeling torn between minimizing operating costs and keeping plentiful inventory items on hand is normal.
When faced with pressure from upper management to increase bottom lines, it&#;s not unusual for maintenance managers to go against their better judgment and keep inventory levels low across the board. But this is a bad move for several reasons.
The non-availability of spare parts can cause significant financial losses in equipment downtime, unmet production targets, expedited shipment costs, and unhappy customers. Alternatively, following inventory management best practices yields several benefits, including:
Additional benefits of spare parts inventory include improved equipment uptime, enhanced part visibility, and improved brand reputation. In the next section, we&#;ll highlight tips for running an adequate spare parts inventory management system.
Here are six steps to optimizing inventory accuracy while keeping costs low:
First, if you haven&#;t already, transition your organization from an overall reactive maintenance strategy to a proactive maintenance strategy. It&#;s not possible to completely eliminate reactive maintenance&#;machines aren&#;t made to last forever.
But reactive maintenance shouldn&#;t be the core aspect of your maintenance tasks if you seek financial optimization. The success of your spare part inventory management program depends on your ability to prevent problems before they happen.
Standard operating procedures (SOPs) help ensure workers know exactly how to repair assets according to company standards. As a maintenance manager, it&#;s your job to identify the most efficient way to fix standard equipment issues and maintain critical machinery.
Digital SOP checklists partner well with inventory control systems, making it easier to track when spare parts move from the stockroom to the shop floor.
We recommend using a mobile computerized maintenance management system (CMMS) that includes parts inventory software capabilities to streamline department initiatives. The best platforms allow maintenance technicians to catalog exactly what parts they are using to fulfill assigned work orders in real time.
Your spare parts inventory management program doesn&#;t have to be all-inclusive to be effective. It&#;s almost impossible to keep an inventory of all the spare parts you need without breaking the bank! As a manager, your goal is to stock the parts most essential to operations.
That means updating records whenever you take parts out of the stockroom and logging new purchase orders. Clearly define and categorize all spare parts according to their manufacturers, costs, and dates of purchase.
Regularly review your inventory to check for parts due to expire or excess stock. Again, user-friendly spare parts inventory management software, as shown above, can help simplify this process.
Next, get a clear understanding of lead times for ordering and receiving different parts. This can help determine which ones to stock and in what quantities.
Prioritize spare parts for critical assets instead of non-critical assets. Order parts with long lead times&#;those that take longer to ship and may force you to incur extra costs for expedited delivery&#;first.
Any realistic maintenance manager will admit that it&#;s impossible to avoid asset failures altogether. After all, old age is the leading cause of unplanned breakdowns.
But you can calculate the risk of downtime for each asset and adequately stock up for those that are high risk. The most accurate way to assess risk is to conduct a Failure Mode and Effects Analysis (FMEA).
Limit access to your spare parts inventory store. Only authorized personnel should have access to the warehouse. This will enable you to effectively monitor and track the movement of spare parts in and out of the warehouse. In addition, you may want to install security cameras at facility entry and exit points.
Lastly, make sure to train relevant personnel on properly receiving purchase orders and counting incoming inventory. This will reduce the likelihood of inaccuracies that can contribute to a false sense of security when you&#;re running low down the line!
If you haven&#;t been paying attention to your spare parts, now is the time. As recent global events have demonstrated, organizations that want to remain competitive can no longer ignore spare part inventory management.
As previously mentioned, spare part inventory management software streamlines maintenance management in a centralized location. Benefits of using CMMS inventory management software include:
With that said, the most significant advantage of using a solution such as MaintainX CMMS is the integration! Having everything you need to manage an effective, responsible, and cost-optimized maintenance department from your smartphone is a game-changer.
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