Parts Management Best Practices

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Parts Management Best Practices

• Joyce Mitchell

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Parts Management Best Practices

• Determine the Correct Part
• Locate The Part In The Store Room
• Maintain An Accurate Inventory
• Establish Effective Stocking Levels
• Institute Accountability
• Manage Vendor Relations
• Identify And Dispose Of Obsolete Parts
• Develop Written Procedures
• Enforce Security
• Manage For Performance

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Part Issue Search by Equipment
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Search or Query Equipment Applet
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Search By Part Usage Code
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Add Cross Reference Numbers
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Work Order Cross Reference Search
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Standard Format-Example Only

• ALWAYS USE CAPS FOR ALL ENTRIES IN FASTER. It is
  easier to read and insures consistency.
• Part First three characters should represent
  the manufacturer of the item, followed by the
  part number. Determine how to address non-alpha
  or numeric characters.
• Description 1 The most important thing to
  remember is that the format MUST be consistent!
  Primary Identifier, Secondary further
  description. Also try to reduce space wasters,
  such as commas or dashes, unless necessary.

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Standardize Your Format
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2. Locate The Part In The Store Room

• All stock parts should have a primary Location
  and, if needed, a secondary
• Shelves, drawers, wall and other storage areas
  should be labeled with a location
• How is the Store Room Organized part number,
  description, category, demand, size
• Non-stock and shop supplies segregated from stock
  inventory and labeled as such.
• Have a defined space for Receiving, Returns,
  Warranty, Parts awaiting Technician
• Discourage limit the habit of maintaining used
  parts or private store rooms

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Storeroom Layout Example
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Inventory Sorted by Location
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3. Maintain An Accurate Inventory

• Verify count on all incoming shipments (Barcode
  will print correct of labels)
• Count inventory prior to every re-order
• Daily inspection for empty shelves
• Establish valid Max Issue quantities
• Make an adjustment when a discrepancy is found
• Perform a physical inventory count at regularly
  defined intervals

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Possible Variance Reasons

• Received wrong part number or quantity
• Issued the wrong part or entered the wrong part
• Entered the wrong issue quantity or unit of issue
• Issue not input to FASTER or input to FASTER
  not given to Tech
• Counted the inventory wrong or entered wrong
  count
• All stock not counted, were some stored
  elsewhere?
• Package quantity inaccurate
• Parts were lost. Check on the shelf behind or
  nearby.
• Parts were stolen.
• if part is frequently issued in conjunction with
  another part, run a parts issued report for both
  parts and see if one is missing

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4. Establish Effective Stocking Levels

• Set the appropriate max/mins (demand, lead
  time, space, packaging, price breaks)
• Run Parts Order Recommendation report (3206)
  daily
• Run Parts Inventory Movement Report (3222)
• Investigate reason for a stock out
• Establish reasonable order frequency
• Review downtime reports for WO status Awaiting
  Stock or Non-Stock part
• Run Inventory Turns report (3229) establish a
  goal for inventory turns

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Establishing Max/Mins

• usage history, continued future demand,
  availability
• lead time, time to receive delivery from vendor
• current in-stock quantity
• Sales, price increases, product shortages
• storage space or special storage requirements
• cost to order, paperwork and labor, unit cost of
  item
• how packaged, case lots, pallets, slings
• seasonal usage
• related items that affect usage
• budgetary constraints
• shelf life
• shipping costs

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5. Institute Accountability

• Receipts Parts Received Detail report (3204)
• Issues Part Issue Report (3201) and Independent
  Issues (3217)
• Outstanding Orders Orders Not Received (3205)
• Transfers Parts Transfer report (3207)
• Returns to inventory Parts Issue report (3201)
  with show returns option
• Adjustments Parts Audit (3201) report cost/qty
  adjustment, key change, merge, order/receipt
  delete, part delete
• Variance Parts Inventory Discrepancy report
  (3227)

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6. Manage Vendor Relations

• Develop strong contract specifications or
  agreements that establish price, delivery terms
  and quality.
• Comparison Shop Document Savings
• Monitor vendor performance
• Price System will notify when price exceeds
  established percentage
• Delivery Use Order Search to monitor back orders
  to insure delivery time complies with contract
• Set up a warranty for all parts except
  consumables
• Establish good rapport

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7. Identify Dispose Of Obsolete Parts

• Run Obsolete Parts reports to identify parts with
  no use. Determine why.
• Run a Parts Issued to Equipment report to
  identify parts related to equipment you plan to
  dispose of
• Decide best method for disposal return,
  exchange, auction, garbage
• Prevent accidentally re-ordering change to
  non-stock, change status, change Store room

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8. Develop Written Procedures

• Map out process flow
• Detail the steps for each task
• Who is responsible for each function?
• How soon or how often should it be done?
• Define how it should be done.
• Establish limits (At what point should management
  be brought in?)

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Adjustment Procedure Example
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Adjustment Procedure Example

• 4.Valid reasons for an Inventory Adjustment may
  include
• Incorrect Data Input
• Loss
• Spoilage or Breakage
• Theft
• 5.If total dollar value of the adjustment is
  25.00 or less, proceed with the adjustment. If
  the total dollar exceeds 25.00, get prior
  approval from management.
• 6.Open Parts Processing and Select INVENTORY tab.
• 7.Type in Part to be corrected in both the Part
  From To fields.

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9. Enforce Security

• Maintain system security by assigning individual
  user IDs and sensible permissions
• Secure the stores area, if possible. Limit
  access.
• Publicize zero theft tolerance policy

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10. Manage For Performance

• Require strict adherence to all procedures.
• Require all safety and regulatory guidelines are
  followed
• Outline behavioral expectations for employees
  (punctuality, attendance, phone internet use,
  etc.)
• Develop a code of ethics to alleviate even the
  perception of unethical activities
• Know how much it costs to operate (salaries,
  expenses, overhead, parts loss)
• Promote proactive communication with customers.
• Discourage shop vs. stores attitude
• Share your accomplishments and successes

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Parts Management Best Practices

• How to get started . . .
• Customize These Practices For Your Operation
• Prioritize Plan How To Best Implement
• Establish Timelines For Accomplishing
• Improve And Revise

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Parts Management Best Practices

• Other Suggestions?
• Questions?
• Comments?