An essential aspect of many businesses is parts inventory management. Reducing excess inventory is important, but only if you’re still able to fulfill any possible needs for spare parts. When this balancing act is done carefully, the costs involved in maintaining a supply chain will be reduced. Good parts inventory management also creates a better way to handle unplanned issues – product failure, damaged parts, customer returns, and more.

The Industrial Maintenance & Plant Operation magazine states in an article that, “Despite the fact that an inventory of spare parts costs a good amount of money, accountants classify your inventory as an asset, and some spare parts have been increasing in cost faster than inflation, they are still not a great investment. Some parts become obsolete before we can use them, some parts get damaged, and some even go bad.”

So what are the keys to effective parts inventory management?

Having More Than One Process

More than one process needs to be in place to handle different types of parts. There are critical parts that are absolutely necessary for an item to operate and there are consumable parts that are not essential to making a product work and are often replaced. Critical parts and consumer parts should be handled differently. Your company should have a process in place that provides the correct parts when and where they’re needed. When this runs smoothly, production and product repair will be easy, quick, and efficient.

Accurately Estimating Demand Cycles

A demand cycle is the amount of time that a specific product is in use. Accurate estimations of a demand cycle for your products will help you stock the correct amount of parts. Knowing that, for example, a new cell phone will be very popular until its next incarnation is released means knowing when to start stocking fewer old smart phone parts and more new smart phone parts. Understanding this cycle will help you keep your parts inventory low while also making sure you don’t run out of parts when you need them.

Having Organized Inventory

You can only manage your parts inventory effectively if you’re organized. Do you know where your parts are? Are all your parts together or are they scattered around your warehouse? Which of your products do you use most often? If you don’t know, you don’t have an accurate representation of your inventory, which will lead to too few or too many parts.

If you would like to know more about effective parts inventory management we can help – contact Acumen today to get more information.