To optimize
inventory
To ensure parts availability
Inventory control being
a significant function, regular analyzing at planned
intervals is in turn a tedious job without computerization.
Deciding the right forecasting methods and identifying
of service, stocking and buying levels to avoid stock-out
may be done using SPOT – Spare parts Optimization
Tool. Objective of SPOT is to compute performance
measures and costs, resulting in answers for the two
fundamental question of inventory function…
When to replenish stock?
How much to obtain?
SPOT is a Visual basic and MS-office
based efficient analytical tool for optimizing inventory
and defining norms for spares.
Features
A set of selective inventory control
policies is available in SPOT for categorizing different
materials. The policies are derived by a 3D illustration;
driven by criticality, demand rate and cost. The range
of value and movement, are organized by Pareto’s
concepts.
The Quantity and replenishment time are calculated using
different scientific equations like Standard deviation,
Economic order quantity and Poisson distribution with
respect to the policies.
Safety or buffer stock and lead-time requirement are
built-in as per service level needs.
The gap between existing and derived order points &
quantities are analyzed and reports are generated.
Purchasing and level monitoring policies are recommended.
In addition to these policy suggestions, the excess
cost is interpreted using analytical concepts and calculations.
The moving & non-moving surplus stock and Write-off
items are identified and listed.
SPOT is a user-friendly analysis tool, developed in
Visual basic and MS-Access.
Benefits
The benefits
of analyzing inventory system through SPOT are listed
below
Improves inventory accuracy substantially
Enhances service level
Optimize the Inventory
Reduces ordering- and carrying-cost
Improves turnover ratio
Reduces Inventory cost by 5 –
20%
SPOT analysis tool generates reports
on the following
Service level comparison
ABC / HML / XYZ analysis
Movement analysis
Re-order points and quantity illustration
Cost benefit analysis
Turnover ratio
Insurance spare with base
stock
Conclusion
Modern materials management strategies
aim at lower to nil stock levels, balancing ordering
and holding costs, covering stock-out risks. Spare parts
management is different from other materials as the
demand is unpredictable. Continuous monitoring and re-fixing
of the levels can achieve spare parts availability avoiding
under- or over-stocking. SPOT paves the way to speed-up
this spare parts controlling process.
