Maintenance inventory management using the ABC system
So you have this big MRO spares inventory. And you know you should be doing a physical count so you know what you have and where they are. But, where do you start. It’s been years since you really looked at it.
One way you can start is to use the ABC classification system. This system breaks your spares down into three categories, A, B and C. The A parts are insurance spares. They are usually about 20% of your line items and represent about 80% of inventory value. B items are routine spares, about 30% of line items and 15% of value. And C items are consumables and pre-expended bin stock. About 50% of line items and 5% of value.
One of the values of this categorization is in physical inventory. You can set up a system so you inventory A items once per year (they have low turnover), B items twice per year and C items (high turnover) 4 times per year.
For example, for A items, divide the number of A items by 52 weeks in a year. Then make up a PM work order for the storekeeper to count that many items each week. Divide the B items by 104, and the C items by 208. Count that many items each week. By the end of the year, you will have done a complete physical inventory of your spare parts.
If you haven’t done an inventory in while and don’t have an ABC system in place, it can still help. Just estimate the number of each category based on the percentages above. Then send the WO out with blanks for that many items. Have the storekeeper write in the inventory numbers of each item she counts along with the count. Then make sure that information gets captured and entered into the inventory program. The storekeeper will make the decision what category each part goes into, using usage data if available. If no data is available, she’s use best judgment. Again, by the3 end of the year you’ll have a working system. And you’ll do it in little chunks without a major manpower effort.
Do you have issues maintaining a good inventory? How have you approached it?
Take a look at our papers and articles on reliability and maintenance
Machinery Reliability and Maintenance papers.