Spare Parts Inventory Management

Spare Parts Inventory Management
Unitec Faculty and Technology
Spare Parts Inventory Management
Student Name:
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Spare Parts Inventory Management
Table of Contents
REVIEW OF CURRENT PRACTICE OF THE FLEET SPARE PART DEPARTMENT...........3
Space Storage and Inventory........................................................................................................3
Lack of Maintenance of Spare Part..............................................................................................4
Poorly Managed Spare Part Management....................................................................................4
Unstructured BOM (Bill of Materials).........................................................................................4
Lack of security............................................................................................................................5
A poor inventory control system..................................................................................................5
Complicated work order process:................................................................................................5
OBSERVATION ON FLEET SPARE PART DEPARTMENT.....................................................6
Space Storage and Inventory........................................................................................................6
Lack of Maintenance of Spare Part..............................................................................................6
Poorly Managed Spare Part Management....................................................................................6
BOM (Bill of Materials)..............................................................................................................7
Security Measures........................................................................................................................7
Inventory control system..............................................................................................................7
Work order process......................................................................................................................8
ANALYZE PRACTICE..................................................................................................................9
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Spare Parts Inventory Management
RECOMMENDED CHANGES....................................................................................................11
Setting up a comprehensive and advanced database:.................................................................11
Implement a proper vehicle replacement cycle:........................................................................12
Having a clear standard policy:..................................................................................................12
Training the employees:.............................................................................................................13
Effective future planning:..........................................................................................................13
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Spare Parts Inventory Management
REVIEW OF CURRENT PRACTICE OF THE FLEET SPARE PART
DEPARTMENT
Spare Part Department is considered as one of the most important integral
parts of the organizations, and it requires a proper systematic approach to
handle the challenges which affect the productivity of the fleet departed
(Teixeira, Lopes,& Figueiredo, 2018). The department is the backbone of the
company and therefore, responsible for the timely delivering the services or
inventory products to solve the breakdown of the company’s vehicle. The
importance of the spare part department cannot be underlooked as it
directly affects the operations of the organizations.
The reviewing of the current practice of the Spare Part Department requires
critical as well as analytical skills to have a proper understanding of the
current situations, to prepare an effective strategy(Cottrell, 2017). While
going through the current practices of the organizations, varied aspects are
identified, which were adversely affecting the company growth. The analysis
was being made on the three centres of the organizations which experiences
a substantial financial loss (Flynn, 2016). The analysis revealed the following
practices, which were affecting the spare part department progress.
Space Storage and Inventory
The organization was holding excess inventory without any proper
warehouse system as well as, was not even using the serial number to track
down the spare parts. The parts were randomly placed without any category
sorting. The lack of knowledge regarding the frequency usage of the
products was recognized. The organization doesn't allocate a specific
location for specific parts. Therefore, wasting a lot of time for carrying the
spare parts from the place of storage to the workshop where maintenance
work is being carried out (Boyd & Rajasekharan, 2019). The company has
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Spare Parts Inventory Management
focused on the initial layout of the warehouse but fails to review their
layouts. There are some items in the inventory which are not moving and
holding the places unnecessarily. As a result, new items also cannot be kept.
There is no system in the inventory to identify unnecessary items and
remove them to make space in the inventory for new items.
Lack of Maintenance of Spare Part
Maintenance of Spare Part is essential, as slightly reluctance in the
maintaining will have adverse effects on the fleet department, the company
(Cai et al., 2017). The spare part department was not maintaining the spare
parts properly as the parts were lying without considering the factors, which
impacts on the life and quality of the parts. As major spare parts are made
up of iron ore were iron alloy and were prone to rust, corrosion, and thus no
proper precaution was made to protect the parts. The organization does not
have a separate section for repairing the damage or rusted spare parts
(Kedar, Mujumdar, Patil & Niturkar, 2017), which were kept at the corner of
the workshop. There are no sections of employees who will look after the
maintenance of the spare parts in the inventory. In the organization, there
are lots of spare parts like this, that are lied in the corner of the warehouse,
not in working condition. Lack of maintenance has made those part unable to
work.
Poorly Managed Spare Part Management
The management in any of the company plays a significant role in handling
the issues and assisting the company for smooth operations. The
organizations did not have a proper operating strategy as well as facing
problems while eliminating the nagging issue of stock out. It focuses on
reactive events and thus built its management accordingly (Madurapperuma,
Ebert, Gamage & Kuruppuarachchi, 2018, February). It ignored the predictive
strategy and thus facing a lot of problems due to this ignorance. They were
not able to differentiate between the reactive and predictive approach as in
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Spare Parts Inventory Management
the spare part department; the reactive strategy would not be appropriate as
it finds its application during a crisis.
Unstructured BOM (Bill of Materials)
Maintaining the bills of materials are very important for the parts inventory.
In the organization, the spare part department was not keeping the bills of
the materials structurally (Sirichakwal & Conner, 2016). They were not aware
of the importance of keeping the records of bills updated. The employees
were not serious about this piece of work. The important bills were kept open
as the paper copies in a bunch of physical files. There was no computerized
database system in the warehouse to keep records (Herron & Mohammed,
2016). There was no advanced technology to keep important data. The floor
was full of unprofessional employees who have no idea about the
needfulness of keeping the bills of materials.
Lack of security
Security of the spare parts inventory is very much needed for an
organization to avoid unnecessary losses. This warehouse of spare parts had
a shallow level of protection. All employees can access the floor. Each part of
the floor is open to all. Employees from other departments of the
organization can quickly come and access the data (Kosicka, Kozłowski &
Mazurkiewicz, 2017, September). There is no one to have a look at these
factors. There are three security guards outside the main entrance of the
department, but they do not work efficiently, and this is not possible for
them to look after every part of the spare parts inventory (Messerli, 2016).
There is no CCTV camera in the department. The core security system of the
whole organization is moderate and in the spare part department there is
lack of securities observed such as having no employee observation system
and no system of tracking the products and keeping records. As a result, the
organization cannot identify any lost or stolen spare parts. Some cases of
stealing and lost parts also have been happened in the inventory.
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