Poor Use of Spares Classes
Spares Management - The Issues
We asked one of our consultants, Dave Thompson, if we could use the benefit of his experience to produce a series of blogs where we actually look at the main issues faced by Spares Managers and how these issues can be addressed.
Of course, Dave happily agreed. Here we have the second of these blogs which tackles the issue of the poor use of spares classes.
Spares Issues Part 2 | Spares Classes
The poor use of spares classes.
There are several spares classification systems used to manage spares effectively. These may be classified as:
Classes to segment the type of spares
Classes used to segment cost attributes
ABC and XYZ
The most common cost classification is the ABC class and is based on the Annual Issue Value, e.g. Unit Cost x Average Annual Demand Rate. Most inventory management systems provides for this data field.
The XYZ is similar to the ABC, but is based on the Stock Holding Value and is used to categorise spares with the greatest stock holding.
The main issues with the ABC classification are:
Not populated at all
Populated incorrectly, such as for Criticality, Stock Checking Frequency
Main issues with the XYZ classification.
Most inventory management systems do not have a data field for this value, therefore, it is rarely used. This analysis is best carried out externally to the inventory management system.
The Result of These Issues
The above issues can result in:
A lack of focus on those items offering the greatest cost reduction, therefore the cost reduction opportunities are overlooked
“A” class items should be used by Purchasing to focus on secure discounts, while A items should be a trigger for maintenance to conduct a reliability study to increase Mean Time Before Failures (MTBF).
Identifying issues
Use of spares classes can form part of a structured master data audit.
How to fix the issues
These classes can be derived outside of the system in MS Excel and bulk uploaded to the system.
If you require support with your spares management processes, get in touch with us to instigate a free, no obligation conversation with one of our spares experts.
You might also be interested in reading…
optimising spare parts and inventory
In our white paper - Optimising Spare Parts and Inventory, we discuss some of the areas that can be addressed to help reduce stock levels and ensure that you only stock the right parts leading to reduced stock-holding savings in expenditure and reduced downtime of equipment.
The areas we cover in this white paper are:
Duplication of spare parts
Standardisation of spare parts
Rationalisation of spare parts
Bad practices
Strategies and priorities
We have included a number of case studies and also the offer to review of your parts data - free of charge!
Download our white paper now to start optimising your spare parts and inventory management systems.