One of the most frustrating situations for repair professionals is identifying a maintenance task but not having the inventoried parts necessary to execute it. This is the manufacturing equivalent of going to the gas station to fill up your car but leaving your wallet at home. Not only is the situation frustrating, your machinery still isn’t getting the attention it needs to keep running flawlessly.
Inventory strategy is a hotly debated topic. What’s the best way to maintain proper inventory, while tying up the lowest possible cost in tangible assets, without putting yourself in a position of shortage? Every company has its own inventory management philosophy and approach to lead time reduction. Here are a few of the most prominent:
- Stock for planned maintenance. If your philosophy is one that’s strictly proactive, stocking parts based on planned maintenance gives you control over exactly the parts you’ll need. Being able to map out planned maintenance puts concrete costs in front of your inventory ledger, while inherently trimming the fat of superfluous parts. The downside here is that you can’t plan for all maintenance, which means costly rush orders when reactive maintenance arises.
- Vendor-managed inventory (VMI). For operations with vast inventories of replacement parts, inventory cost may be too high. Developing a supplier partnership may be the solution for getting the parts you need, when you need them, at an affordable cost. While partner-managed inventories eliminate many of the core inventory headaches, opting for this solution means having faith in a proven partner to handle the supply for your demand.
- Automated inventory ordering. A common “set it and forget it” approach to inventory management is threshold setting. When a specific part drops below a certain inventory level, it’s automatically reordered. This is a great way to control total on-hand inventory and cap costs, but it can result in erratic spending depending on how frequently parts are used and what thresholds they’re set at.
- Outsourced repairs and maintenance. In a similar vein to partner-managed inventories, outsourcing a select portion of your repairs can both reduce the inventory you have on hand and improve repair turnaround. Repair specialists will usually stock essential parts, saving you the trouble of paying for them on short turnaround.
- Simplified supply chain. Why get parts from five vendors when you could get everything you need from a single distributor? Consolidating your supply chain and simplifying it can mean reducing lead times for parts and can enable bulk ordering of multiple parts with a quicker turnaround.
Any combination of these approaches can help reduce lead times for critical parts, while also controlling inventory costs. Inventory managers simply need to remember that being too conservative will lead to larger demand for repair parts as machinery succumbs to duress, whereas being too liberal with inventory management comes at a much higher cost due to having tangible parts on hand.
Finding a middle ground isn’t always easy, but more than a few proven philosophies are aimed at creating balance. Each manufacturer should adopt strategies that support in-house demand and reduce lead times when ordering.