Benchmarks & Client Cases

Spare Part Stock Reduction in Assembly  

The Challenge

stock-value-order-number

Problem


• High stock level of spare parts: excess number of SKUs in large volumes

• Criticality criteria of parts not clear: same management processes for all parts

• Lack of supplier service level compliance: high Lead Times and errors



Root Causes


• Complex computer system for calculation of replenishment points: lack of knowledge leads to poor utilisation of tools

• Lack of trust in available stock management information

• Limited visibility of stock reservations

The Solution

process-design-inventory-classification

• Design of a new system for classification of parts and replenishment point calculation

• Value Analysis Value Engineering to reduce the number of SKUs

• Renegotiation of supplier Lead Times and design of classification standard

• Reservation status follow-up board: visual and accessible by all team members

• Development of consignment contracts

• Standardisation of the inventory process

The Results

The project generated annual savings of £877,000.



Average Stock Value

Average Stock Value

Average stock value reduced by 26%


breadown-benefits


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