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Storeroom & Spare Parts - What good looks like, part 4

by Angel Custodio

Part 4 Inventory Control –

In the previous articles we have covered master data (Part 1), Storeroom organization (Part 2) and (Storeroom Operation (Part 3)). As we continue with this series, please notice that ALL areas are important to obtain a storeroom that will provide the parts needed at the lowest inventory cost possible with quality and low premature failure.   In this article, we are going to talk about Inventory Control.

 

In most places, Inventory Control is usually controlling the entrance to the store with a padlock and chain or a card reader. And yes, controlling the amount of persons entering the storeroom is important, much as other areas.

In Best Practices, inventory control consists of guaranteeing that a part identified as available in the storeroom is:

  • Present
  • Properly identified
  • In the correct bin location
  • In good condition (not used or broken)
  • Clean, free of dust
  • Stored in the proper environment
  • Not defective, substandard or malfunctioning
  • Complies with all specifications

In addition, Inventory Control deals with inventory levels (max, min, re-order point, requisitions). These will be discussed in another article.

 

Physical security of the storerooms

Access to the stores spare parts area needs to be controlled. When store attendants are present, they should decide who has access to the storeroom. Typically, maintenance planners, supervisors and schedulers should have complete access to the storeroom. Trades access should be as needed and allowed by store attendant.

For unattended shifts, establish a process defining who has access and how to remove parts. This can be as simple as being escorted by security, area supervisor or group leader and writing down what was removed in a log. Or it can have access control using cards and barcode scanner. Both need to have a well-documented process, people trained, and many BIG signs indicating the process. The key for success is training and DICIPLINE.

In some locations, the store has “free issue” areas that consisted of nuts and bolts, rags and others. These areas should be separated from the main store.

I have seen storerooms with an Inventory Record Accuracy (IRA) of 98.5% in a 15K item numbers inventory.  How was that accomplished? The process was documented, the maintenance and lead operators were trained, signs were placed all around the shop as a reminder of the process of removing a part, and two cameras were installed.

Inventory Record Accuracy (IRA) aka Cycle Count

The term cycle count refers to an accounting procedure. This procedure verifies that the amount of parts indicated in the CMMS equals the amount on hand.

IDCON INC uses the term Inventory Record Accuracy (IRA). Our method involves a reliability approach for this accounting procedure.  Inventory Record Accuracy:

  • Quantity accuracy
  • Is the part in the correct location?
  • Is the bin labeled?
  • Is there a label on the part?
  • What is the part condition?
    • Complete (not missing components)
    • New or rebuild
    • Physical condition

If ALL conditions are met, the record is accurate.

When a person looks up a part in a CMMS or parts catalogue, and it is available (>0), the IRA method gives that person the assurance that the amount of parts indicated is correct, parts are identified, in a specific bin and ready to use. In short there are no surprises.

 

What to count and when?

Internal company procedures focus on and count the highest price items. This accounts for the items that represent 80% of the total inventory cost. Usually, high cost items are well known and when used, everybody knows it. In another words, the cycle count on these items hit 100% or very close.

IDCON recommends that you first identify all items using their current part usage as a guide. Parts can be:

Fast movers – Parts that have been issued during the last 6 months (< 6mo): These parts usually have a low purchase price and are used in many areas around the plant. They are usually 10% of the parts. IDCON recommends counting them 100% 3 times per year.

Slow movers – Parts that have been issued greater than 6 months and less than 2 years (>6mo and <2yrs): These parts are usually power transmission parts (bearings, seals, etc.) and are part of fixed time maintenance or a condition maintenance inspection. 100% 2 times per year

Very slow movers or non-movers – Parts that have never been used or not issued for the last 2 years: These parts are usually high price tickets such as transmissions, large HP motors, agitators, desiccant wheels, etc. They can be recently added for new equipment in the plant. 100% once per year.

The time frame of each category can be calibrated according to plant requirements. A spreadsheet using some macros can help you keep track of the counts.

Notice that a slow or very slow mover part can become a fast mover with just one transaction. This method frequently counts what’s being used and keeps tab on other items.

I welcome your questions and comments on this article.  You can contact me at a.custodio@idcon.com.  Are you looking for training in Best Practices in Materials and Spare Parts Management or need assistance optimizing your stores?  Contact us!