In any business, the safety stock is paramount since it mitigates a business against running out of stock. Running out of stock can be detrimental to a business since it would mean loss of client confidence and it can be translated as being unreliable. Stock outs can be as a result of suppliers running out of stock or the raw materials not being enough to sustain the market demand. Therefore, safety stock is the amount of stock kept by the business to take care of the excessive demand from the customers or shortage of supply from the suppliers. This way, a business can be considered reliable by its customers. In the essay below, we will focus on the importance of considering the level of protection desired for spare part quantities. Such importance should be based on the role each spare part plays in production. This is because some spare parts may be crucial to a machine but they do not have to be readily available since their lack cannot stop production. On the other hand, some parts must always be in stock since without them, the plant cannot work and this will lead to stoppage of production. This is important since it helps in increasing efficiency, reduction of carriage costs and it is also useful in minimizing performance disruptions. The necessary spare part quantities, therefore, should be available when required since it required. What is unique about spare part management is that it requires extra costs since it helps in maximizing the customer experience. Therefore, having a great spare part protection plan and management system is recommended to enhance the operations of a business.
Identifying the sources of the stock outs is also critical in determining the level of protection needed for spare part quantities. This is because a company has to invest in the purchase of the spare parts so as to learn where the shortage is coming from. Stock outs mostly come from delays in supplies or poor arrangement that may lead to a false impression of a stock out. Therefore, one should be able to identify the reasons for the stock out. This comes with understanding how much spare part consumption is there and predicting the expected returns from the same. If a company is able to understand the sources of stock outs and manage them effectively, customer satisfaction levels will go up since they are sure that their problems will be fixed at the required time and hour of need. In identifying stock outs, one needs an efficient forecasting system to predict the life cycle of a spare part in the store and also to understand why maintaining such an equipment is either cheap or expensive. This means that the logistics officer will have to engage departmental heads and customers to understand their respective demands and how they affect the supply. This, in turn, will prevent unnecessary down-times that may come with the breaking down of a spare part yet it is out of stock. Efficient fix-time rates will also improve client confidence in the spare part management system.
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When logistics officers are determining the spare part quantities, they should take into consideration the operational requirements. The calls for different levels of protection since some spare parts have more value when compared to others. This is because high value spare parts require more protection than ordinary spare parts. A logistics officer can therefore establish which spare parts are most critical depending on the demand and the pricing. This helps in arranging the stock in a secure manner and this facilitates accountability. It will also be instrumental in assisting plant operators to reduce costs and maintain the required efficiency while ensuring that the operations are smooth. For example, companies should give more emphasis in maintaining and protecting rotatable spares since they are crucial to the movement of machines. Therefore, engines should always be given priority in maintenance since their inactivity can lead to loss of money due to halted production (Kazemi Zanjani & Nourelfath, 2014) . Considering the level of protection in spare part quantity is also essential since it helps an organization avoid spending much money on what may be already in stock. When a company has a lot of spare parts in stock, it makes the finance department hold a lot of funds back and this creates the risk of the money getting lost and the spare parts going unused ("7 Things to Consider for Successful Spare Parts Management - Sigma Thermal", 2018) . Having an efficient system that is able to balance the inventory in the shelves and that which is in the stores is critical since it helps in freeing up capital that can be used to handle other services or be invested elsewhere. Companies should therefore put up various technologies that help in electronically managing inventory and reducing cases of fraud while determining the value of each asset accurately. Some of the items that should not be constantly in stock are the spare parts such as gaskets which are discarded after replacement. This is because they will fill up a store and at the same time open up avenues for fraud since keeping them after replacement can create the impression that the company is still well equipped with such consumables. This, in turn, will ensure that the store only has the highly prioritized spare parts put in place as reserves to avoid down-times and outsourcing which may be an extra cost for a business.
On account of the above points, it would suffice to conclude that safety stock should be well protected to avoid cases of unreliability. It is also important to note that safety stock is necessary since it insulates the business from running out of stock and losing customers as a result. Each business should have priority spare parts that it should ensure it does not runout off in their reserves. Stocking spare parts should not be viewed as an extra cost since efficient spare part management brings about improved and consistent performance. To avoid extra costs that come with storage of spare parts which are not in use, a business should identify rotatable, repairable and consumable spare parts and realize that keeping consumables is a waste of resource. However, they should maximize on equipping themselves with engine spare parts to tackle the constant breakdowns these machines experience.
References
7 Things to Consider for Successful Spare Parts Management - Sigma Thermal. (2018). Retrieved from https://www.sigmathermal.com/spare-parts-management/
EmeraldInsight. (2018). Retrieved from https://www.emeraldinsight.com/doi/abs/10.1108/13552510710829452?fullSc=1&journalCode=jqme
Kazemi Zanjani, M., & Nourelfath, M. (2014). Integrated spare parts logistics and operations planning for maintenance service providers. International Journal Of Production Economics , 158 , 44-53. doi: 10.1016/j.ijpe.2014.07.012
Kian, R., Bektaş, T., & Ouelhadj, D. (2018). Optimal spare parts management for vessel maintenance scheduling. Annals Of Operations Research . doi: 10.1007/s10479-018-2907-y
