There are many economical inventory management tools on the market. Limit access to inventory lists to those staff located at the Emergency Operations Center. Theres nothing more frustrating to maintenance professionals than not finding the spare part they need in inventory to repair a critical machine. The latter only keeps track of products that are now sold to customers. Keep your equipment and facilities operational for your customers. These cookies do not store any personal information. Keep your assets running and manage checklists across all of your locations. The best inventory management software for your business depends on various factors, including your budget, business type and specific features like mobile apps and cloud backup. Specific rack sections must be established for these items. 4. 7 Spare Parts Inventory Management Best Practices If you stock all products in your own facility, your inventory controls and processes are handled internally. The software provides insights to help departments avoid over-investing in rarely used materials. Usually, these locations are small metal shelving units. This is very important if we hope to get items replaced under warranties. To maintain optimal inventory levels, you need robust systems to accurately track and maintain control of your inventory levels. Just take them as needed and the vendor will monitor their quantities on-hand and replenish them. Contains spam, fake content or potential malware, S2.2 - documenting and recording information. To help support our reporting work, and to continue our ability to provide this content for free to our readers, we receive compensation from the companies that advertise on the Forbes Advisor site. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Take the time to check inventory and order all restocks yourself. Take appropriate action with the purchaser to get the items shipped out ASAP. Notably, they maintain accurate counts of the number of materials/replacement parts available, their location, and their association with specific work orders. The above advice is a 30,000 foot view of what is needed to be done to set up a world-class maintenance spare parts inventory system. Inventory management systems range from surprisingly simple to exceedingly complex. To get the best possible experience please use the latest version of Chrome, Firefox, Safari, or Microsoft Edge to view this website. Even a few hours of downtime can wreak havoc on your production schedule. This preliminary assessment will provide a baseline to build initial inventory counts. Who supervises the storeroom clerks? But it will make life easier, more efficient and accurate for everyone that works with or purchases the spare parts that keep production online. These managers and engineers will work with the purchasing supervisor to get the changes made. If you don't know what you're losing, you don't know what you could be earning. The Costs of Not Maintaining a Well-Stocked Spare Parts Inventory One of the main costs of not maintaining a well-stocked spare parts inventory is the constant need to order and rush-deliver spare parts. Why is inventory management in the supply chain important? Who is responsible for maintaining the inventory stock in the pharmacy? Inventory management is the umbrella term for the procedures and processes that affect ordering, receiving, storing, tracking and accounting for all of the goods a business sells. Lock the storerooms. Additionally, equipment such as vertical lift modules for spare parts provide strict security. Changing locations is the responsibility of the storeroom clerk and he/she will make the physical and the correct computer changes. You may encounter items in some storage locations that are not inventoried stock items. Its that simple. In Part 1 of this article, I discussed first steps to control and manage your maintenance spare parts inventory. Inventory Management Defined: What it is and How it Works - Shopify Smart inventory management techniques can increase a businesss profitability and cash flow. Barcode Scanning: Instead of searching for SKUs, quickly add parts to work orders with barcode scanning functionality. Heres a seven-step approach to creating an inventory management plan with procedures, controls and tools tailored to your businesss unique needs. Inaccurate inventory records also lead to stock-outs, market changes, and over-purchasing. Maintenance inventory management software, on the other hand, is essentially one part of a CMMS. Physical, hands-on inventory counts spot errors that even the best technology cant catch. Once the machinery overhaul is completed, there may be unused parts which have future use and should be inventoried. Do you know when specific items sell faster or drop off? Prioritizing your inventory helps you understand necessary ordering and manufacturing frequencies to meet your customers needs. Where possible, centralize and consolidate satellite parts inventory into your main parts warehouse. Do specific items sell according to seasons? This means knowing this skill may be an asset for career advancement if you are in one of these occupations. SKUs generally use a combination of letters and numbers which are arranged to deliver key details about an item at a glance. From there, the product travels to suppliers or distributors, which purchase the products from the manufacturer with the intent of distributing them either directly to the customer or, more often, to retailers. Other businesses overstock items just in case, causing cash flow issues. The second practice to help assist in this objective is to install security camera systems and begin utilizing badge access to entry and exit points. For non-inventoried items, attach a 3" x 5" paper tag to the item that lists the item name, where used, WO and PO number, storage location and name of person who ordered it. The separation of this function prevents an information mistakes to the vendors. You should understand these items complete sales cycles including how many you sell in a week or a month and closely monitor them. With everyone scrambling for stock right now (including your competitors), it's more important than ever to build and nurture strong relationships with your suppliers. The 80/20 productivity rule of thumb states that 80% of your profits come from 20% of your efforts. Also, utilizing barcodes and scanning functionality in conjunction with the system will greatly enhance the efficiency of the processes in the parts warehouse and improve on inventory accuracy. This can lead to increased expenses, such as rush shipping fees and expedited processing costs. Its worth repeating, spare parts management is often a thankless task but when you consider the lost revenue and logistical nightmares extended downtime can present, its much easier to get motivated to implement this necessary evil. A few hundred dollars worth of inventory can prevent thousands or more in lost or delayed revenue that can come as the result of unplanned downtime. For a small business or solopreneur, supply chain and inventory management procedures easily meld together. Categorizing your inventory into priority groups can help you understand your ideal ordering quantities and frequencies. You wont have to transfer data from one system to another and risk inaccurate inventory counts. PDF chapter 23 Inventory management - Management Sciences for Health VMI items do not need to be scanned out of the storeroom. You also may want to install security cameras to monitor entry and exit points for added protection. Use CMMS parts listings to standardize spare parts as much as possible across all plant equipment; Make sure purchasing enters all new items into the CMMS for new spares needed when new equipment is brought into the plant. Please allow a few minutes for this process to complete. Schedule repeatable tasks for your assets with ease. With these six tips in mind, it is our hope that inventory management will become a bit less of a burden for you, and much more of a value driver. Any business that sells products must manage goods properly to survive. Stock check-in must be accurate, too, since errors directly impact your product QOH data and lead to over-ordering, false backorders and unsold stock. Please confirm you want to block this member. Experts suggest segregating your inventory into A, B and C groups. Be prepared to switch partners or deal with uncertain stock levels and the possibility of running out of inventory. Several studies have shown the availability of spare parts significantly impacts efforts to restore production. This applies to inventory and non-inventory items. Whether you stock goods yourself, use a fulfillment partner or focus on dropship vendors, keeping close tabs on inventory data is vital to inventory management. Receive incoming shipments, check for damaged items, check the packing slip against the PO to see if we received what we ordered and update the CMMS. For this, spreadsheets and inventory management systems are invaluable tools. Inventory management is the system you use to order, store, organize and move inventory through the supply chain. A key element of a spare parts inventory control system is introducing a parts counter a single, controlled point of access to the inventory room. Maintenance managers and plant engineers have overall responsibility to keep the plant machines operating. The shipping reasons could be wrong items shipped in for a PO, items damaged in shipments and items being shipped out for repair or warranty replacement. This is simply a formalized set of processes, designed to help your team achieve optimal performance in key areas including: Order management. This is especially important with perishable foods and goods with expiration dates, such as cosmetics.
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