In this article, we will cover exactly what parts inventory is and its importance. We will also share our simple 10-step process to manage your spare parts inventory. Read on to learn more.
Parts inventory refers to the stock of spare parts and components kept on hand by businesses to ensure uninterrupted operations, maintenance, and repairs. It involves managing these items effectively to minimize downtime, optimize costs, and meet demand.
Example: An automotive repair shop has a parts inventory that includes 20 units of Bosch oil filters and 15 sets of Brembo P30001 brake pads to ensure that vehicle models can be serviced immediately without delays caused by having to order parts.
Parts inventory is important for a number of reasons, some of the most common reasons include:
Having a well-managed parts inventory ensures that essential components are readily available to reduce equipment downtime and improve productivity. It allows businesses to meet customer demands promptly and enhance service quality and competitiveness.
Proper parts inventory management helps in optimizing storage costs and avoiding overstocking or understocking situations. By analyzing usage trends and patterns, businesses can make informed decisions on order quantities and timings to reduce wastage and save costs.
A parts inventory stocked with essential items ensures quick and efficient service that leads to higher customer satisfaction. Customers benefit from reduced waiting times and reliable service which fosters loyalty and positive word-of-mouth referrals.
Through monitoring and analyzing parts inventory, businesses gain insights into usage patterns and demand trends. This data is crucial for making informed decisions on procurement, stocking levels, and identifying opportunities for optimization.
Adequate parts inventory acts as a buffer against supply chain disruptions to ensure business continuity. By having essential parts on hand, companies can mitigate the risks associated with supplier delays, transportation issues, or unexpected demand surges.
Maintaining a parts inventory helps businesses adhere to quality and safety standards and ensure that only certified and compliant components are used. It aids in traceability and accountability which is essential for audits and quality assurance processes.
Use our 10 step process to manage your spare parts inventory effectively. Simply follow the steps below:
Create a detailed catalog of every spare part including specifics like part numbers, manufacturers, and usage rates to ensure each item is easily identifiable and traceable. Employ barcoding or RFID systems for real-time tracking.
Example: JetService Aviation has cataloged 45 units of Pratt & Whitney PW4000 fan blades as PW4FB-45 and 60 units of Honeywell 131-9A APU as HW9A-60 with barcodes for real-time tracking and easy accessibility.
Set minimum stock levels for each spare part based on historical usage data and forecasted demand to ensure critical parts are always available and to avoid overstocking.
Example: AutoPro maintains at least 25 units of Bosch 3323 oil filters and 40 units of Raybestos SP1356XP brake pads to cater to the immediate needs from historical repair data and usage rates.
Incorporate regular audits to validate the accuracy of the inventory. Identify discrepancies and update the records to reflect the actual stock levels and conditions.
Example: Every month, IndustrialTech audits its 150 units of Siemens 6ES7322-1BH01-0AA0 PLC modules and 100 units of ABB Tmax T7 circuit breakers to ensure accuracy and update records for real-time tracking.
Utilize technology to automate the reordering process when stock levels reach the predetermined minimum to ensure a consistent supply without manual intervention.
Example: When stock for the Caterpillar 1R-0750 fuel filters at HeavyMachines Inc. drops to 20 units, an automated system places an order for 50 more units to replenish the stock based on preset levels.
Regularly analyze usage patterns and data to forecast future demand and allow for strategic planning and optimization of the spare parts inventory.
Example: PowerPlant Co. reviews the annual usage of 500 units of GE BWR fuel rods and predicts a 20% increase in demand. They then adjust procurement and stock levels accordingly.
Develop and maintain relationships with multiple vendors to ensure a reliable supply chain, quality assurance, and competitive pricing for spare parts.
Example: AutoMaster Garage consistently sources its 30 monthly units of NGK (96588) R7438-9 spark plugs and 50 units of Mann-Filter C 3698/3-2 air filters from three trusted vendors to ensure supply reliability and cost efficiency.
Incorporate predictive maintenance to anticipate the need for spare parts based on equipment performance data and analytics to enable proactive inventory management.
Example: AeroFleet Airlines utilizes data analytics to predict the replacement cycle of Rolls-Royce Trent 1000 engine components to ensure that at least 10 units of high-pressure turbine blades are in stock ahead of scheduled maintenance.
Upgrade storage facilities to optimize space to ensure the preservation of parts quality and facilitate easy retrieval, counting, and restocking of items.
Example: MarineOps stores its 200 units of Johnson 09-812B-1 impellers and 100 units of Sierra 18-9781 lower unit gear lube in climate-controlled facilities with automated retrieval systems for efficient inventory management.
Invest in training for inventory personnel on effective management practices, technology usage, and parts handling to enhance efficiency and accuracy.
Example: AutoRepair Hub ensures its staff is proficient in using the automated system to track the 70 units of Moog K80026 Ball Joint and 80 units of Bosch BE923H Blue Disc Brake Pads through regular training sessions.
Continuously optimize the parts inventory by leveraging data insights, analytics, and feedback to enhance forecasting, procurement, storage, and replenishment processes.
Example: TechFactory analyzes its quarterly usage data of 120 units of Intel Core i9-9900K processors and 300 units of Kingston KVR21N15D8/8 RAMs. They also adjust procurement schedules and storage layouts for optimized inventory turnover.
AutoCare Solutions is a renowned automobile service and repair business that wants to optimize its spare parts inventory. Here’s how they implemented our simple 10 step process:
AutoCare Solutions catalogs every item in their parts inventory, like 30 units of Fram PH6607 oil filters and 25 units of Wagner BD125654 brake discs with specific labels and barcodes for easy identification and real-time tracking.
Based on historical data, AutoCare sets minimum stock levels: 20 units for Fram PH6607 oil filters and 15 units for Wagner BD125654 brake discs to meet instant customer demands while avoiding overstocking.
AutoCare’s inventory team conducts monthly audits. In one instance, they noticed a discrepancy and adjusted the records to show 28 units of Fram PH6607 oil filters and 22 units of Wagner BD125654 brake discs to reflect actual stock.
An automated reordering system at AutoCare is triggered when the Fram PH6607 oil filters fall below 20 units. The system automatically places an order for an additional 25 units to replenish the stock.
AutoCare reviews usage patterns and predicts that the demand for Wagner BD125654 brake discs will rise by 15% in the winter. They adjust their stock levels to accommodate the anticipated increase in demand.
AutoCare maintains relationships with vendors like PartsCo and MotorSpares to ensure a consistent supply of quality parts like ACDelco 41-993 spark plugs and Gates K060841 serpentine belts at competitive prices.
With predictive maintenance, AutoCare anticipates the need for 40 units of Bosch 3323 oil filters ahead of the busy summer season to align inventory with anticipated demand and reduce lead times.
AutoCare has upgraded its storage to hold 50 units of Duralast 49-DL batteries efficiently with climate controls ensuring optimal preservation and an automated system for easy retrieval and stock counting.
Inventory staff at AutoCare are regularly trained to ensure they effectively use the inventory system and handle the 60 units of NGK (6953) BKR5E-11 V-Power Spark Plug with proficiency and accuracy.
AutoCare adjusts its procurement and storage processes using insights derived from data analytics. After reviewing patterns, they reduced the order quantity for Delphi FG0053 Fuel Pumps to 15 units which aligns with actual demand trends.
We hope that you now have a better understanding of what parts inventory is and how to effectively manage your spare parts inventory.
If you enjoyed this article, you might also like our article on opening inventory or our article on inventory organization.
