8 Ways to control inventory related costs
How do you control inventory related costs? You control them through effective asset management. Effective asset management is about ensuring you have the processes in place to cost effectively limit downtime and keep your production equipment running smoothly when needed. When systems go down, you need to get them back running quickly to limit the impact on the customer.
Delays sourcing spare parts can have a significant effect on system downtime if parts are not readily available. Therefore, effective inventory control can have a significant impact limiting downtime and protecting cash flow, freeing up capital and minimizing borrowing costs. CMMS software can help you keep your inventory related costs under control in 8 ways:
1. Parts tracking
Time spent walking through storerooms and manually checking to see if a part is available on a shelf is a waste of time and money. Searching for lost parts can be a bigger waste of time. This tool will let you automatically track stock levels so technicians and engineers can check online to see if a part is available rather than physically check the storeroom. If the part is available, they’ll know exactly where to go to pick it up. Accurate tracking also prevents duplicate ordering when the technician didn’t look in the right place.
2. Optimized stock levels
Fiix can help you determine the stock levels that meet asset availability requirements while limiting the inventory carrying costs. You can also use Fiix to identify those high need stock items so they can be stored locally. Fine-tuning minimum levels and reorder quantities based on supplier lead-time and part criticality can optimize stock levels. By optimizing minimum levels and reordering quantities, you are effectively employing “Just In Time Delivery” in your organization.
Fiix software automatically notifies logistics personnel when parts fall below minimum levels. It takes the guesswork out of reordering which reduces the chances of a stock out. Parts ordering can be conducted through the purchasing section of the CMMS, meaning all maintenance related activities can be calculated at year end from one system.
4. Manage inventory at multiple locations
Fiix lets organizations track parts and supplies in multiple storage locations at multiple sites. Technicians at one site can check to see if a part is available at another site without having to pick up the phone and contact the right person. If supplier lead times are slow, or the part is obsolete, it could be quicker to ship the part from another site than trying to source from a supplier.
5. Eliminate obsolete parts
Fiix lets you track parts that have not moved for an extended period that could be surplus to requirements and could to be returned for a supplier rebate. This helps you minimize the amount of capital tied up in underused parts and materials.
6. Real time reporting
Fiix allows for real time reporting on inventory levels, value of stock on hand, purchase order history and outstanding purchase orders. Simply click through to the reports section to our suite of caned inventory control reports.
7. Identifying stocking opportunities
The CMMS can also help you identify parts and supplies that are not stocked on site but are used on a regular basis. There may be an opportunity to improve system availability and limit emergency parts shipments by stocking the part on-site.
8. Single integrated system
Many large organizations manage their assets in a CMMS while managing their spare parts in a separate ERP system. If your CMMS comes with an inventory module, is there a need to purchase an expensive ERP system to keep track of MRO inventory? David Berger of Plant Services points out the missed opportunities of not using your CMMS to track spare parts in this article. By using a single CMMS system for asset management and inventory control, you cut those additional costs associated with acquiring a separate ERP system, integrating it with the CMMS and training staff on two disparate systems.
Many organizations sign up for CMMS software to track PM’s and work orders but a CMMS can also help you track your spare parts and control inventory related costs. This post has outlined 8 ways you can use your CMMS to effectively control inventory costs. Why not make inventory management a critical part of your asset management strategy today?