Spare Change

It’s time to put to rest some concerns that many people have about spare-part stockrooms.

Many companies have questions regarding the value of spending time on setting up effective stockrooms and training personnel how to use and maintain them. Here is a look at what can be called a world-class stockroom.

The stockroom job is by far the largest task when setting up a successful computerized maintenance management system (CMMS). All the cleaning, purging, organization and labelling — not to mention the confusion trying to find parts during the transition — really is worth the effort. But in many locations, you’ll see stores managers that have gone through half-hearted attempts of trying to make it work, but never seem to have finished the project.

One thing is certain — it is impossible to have a fully functioning CMMS without having an accurate inventory of spare parts. You need details of part descriptions, locations and quantities on hand that are accurate.

Many first-time implementers of a CMMS don’t understand the effect that doing this will have on the reliability of the information in the system, or how it will affect other functions in the program.

First of all, without organizing the stores, it will be impossible to use the inventory auto-ordering feature of the program and will render the purchasing tools of the program nearly useless.

Parts that have poor descriptions will be very difficult to associate to equipment and issuing parts to work orders will be painful. Developing material lists for work orders will result in the wrong parts on the list and insufficient quantities on hand.

In short, the CMMS will not be much help without an inventory list that is accurate, and a stockroom that is organized and maintained.

Another benefit of a world-class storeroom is that reports that can be generated from the CMMS to help manage inventory. Various reports can be generated, including:

*Stock Outs — These are parts that you needed but the stock was zero on hand. How many of these do you have? It costs money every time this happens. Think about the production time lost.

*Inventory turnovers — This shows how many times a part was used. The report helps you decide whether or not to keep the part on hand and how many you need. Again, it’s about having parts on hand when you need them.

*Percent of inactive inventory — Some places have parts on their shelves that have been there for years. They may be obsolete, the incorrect parts, or already used or unusable. They take up valuable space and waste money.

The next step is to examine the stockroom.

The before and after pictures accompanying this article may remind you of what you have now, and should paint a pretty good picture of where you would like to go. These pictures come from companies that decided to have a world-class stockroom. They made this decision for a few simple reasons:

1. To eliminate used and obsolete parts

2. To maintain the usability of parts

3. To ensure the proper levels of stock and critical parts

4. To reduce wait times and eliminate scavenger hunts for parts

5. To eliminate the cost of rush part orders

6. To reduce stock levels

7. To develop spare-part lists for all equipment

8. To create a proper stores layout, which results in a more beneficial flow of everyday tasks

9. To ensure stockkeeping tasks can be preformed with ease.

It can take months to create a stockroom that looks like these pictures. It will definitely take time, labour, money and a total commitment. Without these elements, your chances of succeeding are slim and you’ll end up with one of those halfway stores setups — half completed, half not done, and no one really caring.

If you decide to spend the time and money, what do you get for your efforts?

Here are the payoffs we have seen over the past few years that make it all worthwhile.

* Inventory accuracy improvements, by as much as 95%.

* Reduction in maintenance personnel looking for parts to do repairs, from 20 minutes or longer, down to less than two minutes.

* Reduction in unnecessary maintenance purchases, by as much as 25%.

It is important to involve the maintenance staff with the transformation of the stockroom. If they are part of the process, they are more likely to do their part to keep the stores in an organized condition.

Their knowledge is also valuable in the identification and documentation of the parts, as well as the association of the parts to specific equipment.

Their morale may be hard to measure, however the attitude of craftspeople is quite noticeable when they know they are a valuable part of the finished storeroom — and most importantly, when they are able to quickly find the parts they require.

With these types of results, I’m sure you can see that the cost savings can be substantial. The reduction in downtime by having parts on hand and being able to find them quickly is enormous.

If you’re wondering about the added value of spending time learning how to develop a world-class stockroom and of spending your own resources to make it happen, then I hope this information helps you decide what course of action to take. The payoff is big and quick, and the returns grow year after year.

That sounds like a good long-term investment to me.

Peter Phillips of Trailwalk Holdings, a CMMS consulting and training company based in Nova Scotia, can be reached at 902-798-3601 or by e-mail at peter@trailwalk.ca.