Carrying a spare part within the facility’s storeroom seems like a simple strategy not requiring much thought. But a second look at internal stocking options reveals there is much to consider in setting optimal stocking levels. Several strategies need to be considered.

The use of free issue stock, vending machines, and vendor managed inventory are potential strategies that control cost, reduce transaction work load, and reduce consumption, while ensuring spare parts availability.

Once the decision has been made to stock a spare part, it is a fairly complex process to set the proper min/max levels, the proper order quantities, and ensure that total lead times are accurate and reviewed regularly. There are many factors to consider here and it needs to be a cross-functional collaboration between finance, maintenance, operations, procurement, and stores along with an approval process in which maintenance, operations, and the person(s) ultimately responsible for operational and financial success of the facility are involved and in general agreement.

At PCA, we recommend that this be accomplished through a formal Request for Additions, Reductions, and Deletion (R.A.R.D.) process. In this process, maintenance (or operations) identifies the part and includes a detail description of specifications. Maintenance, often the maintenance planner, will then recommend the stocking level and expected replacement intervals. Procurement is responsible for vendor identification and selection, although maintenance can often provide valuable input. Procurement is responsible for pricing, lead time, and issuing purchase orders.

A formal process supported by a specific form that requires all the above information to be filled-out is usually needed. Having the form electronically available on a facility share site is desirable. Once all the required information is filled-out, the form is then sent through a formal approval process.

One thing to remember and beware… there are many EAM/CMMS applications that will calculate average vendor lead time based on delivery history. Using this calculation only assures that your part will be late 50% of the time!