Whether it’s in the public or private sectors, Inventory Management is an extremely important matter for a company.
Storing inventory has a cost. Whether it is spare parts, finished products, raw materials, or equipment, it is imperative to optimize Inventory Management.
Acquired costs added to the cost of storage and the cost of depreciation means it is not worthwhile to stock excess onhand goods unnecessarily. It is enough to have the goods you need, when you need them, and to find the right balance through the help of forecasting and scheduling tools.
Being out of stock can interrupt the company’s productivity and lead to extras costs.
On the contrary, when inventory is too full of overstock, the cost price is increased.
Tracking inventory well is profitable for the company and also means better customer and/or supplier satisfaction.
There are several techniques for optimizing inventory management :
The Replenishment Method
The order is made on a fixed date for a fixed quantity of products. This method, also called Scheduled Purchasing, allows you to plan your orders. However, it is most adapted to a constant and predictable consumption or use of products, without risking stock shortages or over-stocking.
The Re-Order or Par Levels Method
The order is placed at variable dates but it is the inventory level set at the minimum needed on-hand, that triggers the order. This minimum level of stock, called the “Reorder point”, is calculate in advance.
This method is adapted to regular use or consumption of products but entails routine and rigorous monitoring.
The Restock Method
The order is placed on a fixed date but the quantity is variable, depending on the level of the stock that is needed.
Orders are planned over time and require significant buying power and storage capabilities. You also need to be able to anticipate your needs in advance.
The Purchase-By-Requirement Method
The order is place for a variable quantity, at variable dates, on the basis of company demands and needs.
Whichever optimization method is used, it must be adapted in order to rigorously ensure the needs of the company and stock availability.
So that a Maintenance Service can function properly, it is essential to maintain stock levels of spare parts needed for maintenance and repairs. The risk of ending up with a machine at a standstill, and therefore of interrupting production, must be avoided at all costs.
Inventory management for spare parts requires attention and precision. It is important to track inventory in a reliable way with, for example, the use of barcodes. In order to do that, it is necessary to have had an analytic approach of the different maintenance indicators beforehand:
- which components must always be in stock (availability of spare parts at the time of a breakdown)?
- in what quantity (definition of the threshold point, according to minimum and maximum stock)?
- what are the delivery times?
- for what situation and in which storage areas (discontinuance and cost generated by storage, physical organization of shelving, barcodes etc.)?
- and so forth…
Stock management using a CMMS
A CMMS is a maintenance management software for a company, a state government office or an administration board. This software is efficient in many fields (equipment management, employee management, intervention requests, etc.) including inventory management (quantities, replenishment, valuation, purchase orders, multi-suppliers, history logs, etc.). It simplifies the maintenance tasks of employees and reduces their risks.
The advantages of the MAINTI4® CMMS in stock management :
With the use of MAINTI4®, stock management becomes EVEN SIMPLER and MORE EFFICIENT !
Our key strengths:
- Identification and technical data of products and parts in stock
- The barcodes’ technology, permitting traceability of items, but also allowing for better organization in storage and shelving
- A multi-store management possibility (which makes it possible to do transfers from one store to another) and multi-suppliers management
- Automatic replenishment, based on maximum or minimum quantities, and a set threshold alert that can be done in an automated way (for example, by email)
- The reservation of stock in spare parts, those specific to preventative and curative interventions, so as never have shortages
- A history of operations (entries, exits, reservations, reception of goods etc.)
- Annual mandatory physical inventory and/or cycle counts made easier
- The identification of consumption levels of different services or machines, with precise statistical monitoring
- The identification of phantom inventory, that provides better visibility of the spare parts lying latent in storage (dead stock)
- The valuation of the stock in real time and on a given date
Thanks to the MAINTI4® CMMS software, your inventory management is made easier. It is more operational, but above all more reliable. Good inventory management helps to significantly improve service rate. The return on investment (ROI) of your CMMS is a tangible reality. A study conducted by AFIM (French organization for engineers and maintenance managers) estimates that a CMMS can reduce the value of the stock from 10% to 20%, and its supply costs from 5% to 10%. The return on investment (ROI) of your CMMS is a tangible reality !