A parts list is essential for any plant to maintain its productivity as having the right items in the inventory can help the millwrights to replace the items in case of a failure or planners to plan a maintenance job without having any unnecessary delays. However, companies are so busy in their daily activities that they often tend to overlook their parts list and their inventory often gets overstocked.
1. Save costs, save money
In figure 1, we have an example of a parts list at a client where two different OEMs for two different assets used the same 1 7/16-inch ball bearing. The client, however, has classified the bearings as two different items in their list. Hence, when the time comes to reorder, the client will have to place two orders with two different suppliers.
There are two consequences for this. One, this can result in overstocking of the bearings. Two, this can also lead to an increase in costs as different suppliers usually means different prices for purchasing and for delivery fees.
CMMS P/N | OEM P/N | OEM | MFR P/N | MFR Name | VN P/N | VN Name | Description |
---|---|---|---|---|---|---|---|
AB C0001 | DOEB 1-7/16 | JOHN DOE INDUSTRY LTD | XYZ001-7/16 | XYZ BEARINGS | DOEB 1-7/16 | DOE AUTOMATION INC | BEARING, BALL, 1-7/16 IN |
AB C0834 | ROE_BALL-BRG_1-7/16 | ROE CORPORATION | XYZ001-7/16 | XYZ BEARINGS | 274_BALL_1-7/16 | R SUPPLIERS | BEARING, BALL, 1-7/16 IN |
This is an example of a parts list that has not been consolidated. Parts consolidation is to check for any duplication of the items and classify them under one item. Coming back to the example, a proper consolidation would be to delete one of the items from the list and classify them under one item like shown in figure 2.
The information regarding the OEM and Vendor and their part numbers from the duplicate item has been retained in the consolidated part in case of necessity. Consolidating the parts also leads to the consolidation of their quantities and eliminates any additional purchase that can be avoided.
CMMS P/N | OEM P/N | OEM | MFR P/N | MFR Name | VN P/N | VN Name | Description | Additional AL Xref P/N | Additional Xref |
---|---|---|---|---|---|---|---|---|---|
AB C0001 | DOEB 1-7/16 | JOHN DOE INDUSTRY LTD | XYZ001-7/16 | XYZ BEARINGS | DOEB 1-7/16 | DOE AUTOMATION INC | BEARING, BALL, 1-7/16 IN | ROE_BALL-BRG_1-7/16 274_BALL_1-7/16 | ROE CORPORATION R SUPPLIERS |
Going a step further, it is possible to further consolidate the list by consolidating the vendors or suppliers. In our example, it is wise to check for the bearings at a local or even an existent supplier for the client. Having a local or existing supplier that can supply the bearings can significantly save costs.
Local suppliers would not cost much on a delivery fee and usually be able to deliver faster. An existing supplier can potentially offer a discount due to the existing working relationships or cost less in delivery due to bundling of multiples orders together. This leads to a faster inventory turnover at a lower cost.
Parts consolidation also means removing any items that are usually static or are installed for supports and hence are less likely to wear out as often such as a plate or items that are usually available at a local hardware store such as screws, bolts, washer etc. These items are redundancy and would just lead to an increase in purchasing and carrying costs.
2. Does it end here?
Once the parts list has been consolidated it is over, right? Wrong.
Let’s go back to the example of the bearings. Suppose after a couple of years, the client decided to replace the old 1 7/16-inch bearings with new 2-inch bearings owing to some design changes. That would mean the consolidated parts list is no longer valid as it contains the old bearings which are no longer usable at their plant.
Therefore, we need to update the list by adding the new bearings and archiving the old ones in order to retain its records. Having no record of the new bearings on the consolidated list the client will not be ordering them in their next batch of orders.
So, when the new bearings run out of stock and a failure occurs, the production is halted, and the client would then have to first order the bearings and then wait till they have been delivered to resume operations. Each hour the operations are halted adds to the loss of revenue to the client.
Another possible scenario is that the 2-inch bearings are already used at the plant and hence already in the consolidated list and only some of the old 1 7/16-inch bearings are being replaced with the new ones.
In this scenario, the quantities of the respective bearings need to be modified. Further modifications in the consolidated list can come up if the company has determined that some items are very reliable and do not fail as much after multiple years of operation and hence decided to decrease the amount to stock.
Or there has been a change in suppliers due to multiple reasons such as damaged working relationships, existing supplier closed business, new supplier available at a lower cost or with a more reliable product.
Therefore, parts consolidation is not a one and done process. It is a continuous iteration that needs to be evaluated and updated whenever there has been any change. Missing out on an update can lead to disaster consequences.
3. Cannot be overlooked
Parts consolidation is a crucial aspect of inventory management and cannot be neglected. Whether it’s for newly installed assets or changes to existing assets, a proper consolidated list with up-to-date information can ensure lower inventory cost and avoids any potential loss in plant’s production and consequently to its’ revenue.
Farhan Saif Khan
Reliability engineer – Laurentide Controls
fsaifkhan@laurentide.com