The impact of not holding a required spare part can be massive. Downtime costs often far outweigh the purchase and holding costs of spares and this can lead to holding far more of some spares than is really required. As a result accountants will often target this as an area of easy cost savings.
If you want to keep the accountants off your back and maintain control of your spares holdings it is important to regularly review your inventory and eliminate excess spare parts holdings. To do this most effectively inventory reviews need to focus on much more than just data analytics. The real drivers of excess inventory lay in the processes and decision making that influences your inventory levels. Therefore, you need to conduct regular management process, obsolete and excess inventory reviews using a robust and predefined approach. Predefining the approach for conducting a review sets the standard for this activity and provides far greater continuity in reviews over time. This will enable you to maintain control over inventory reviews rather than having them done to you.
Phillip Slater is a leading authority on materials and spare parts management. He is a qualified engineer, an experienced operations and maintenance manager, a seasoned management consultant, and the author of four operations management books, including Smart Inventory Solutions, now in its second edition. www.PhillipSlater.com