1. Parts Management Best Practices Joyce Mitchell

2. Parts Management Best Practices 1.Determine the Correct Part # 2.Locate The Part In The Store Room 3.Maintain An Accurate Inventory 4.Establish Effective Stocking Levels 5.Institute Accountability 6.Manage Vendor Relations 7.Identify And Dispose Of Obsolete Parts 8.Develop Written Procedures 9.Enforce Security 10.Manage For Performance

3. Part Issue Search by Equipment #

4. Search or Query Equipment Applet

5. Search By Part Usage Code

6. Add Cross Reference Numbers

7. Work Order Cross Reference Search

8. 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.

9. Standardize Your Format **

10. 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”

11. Storeroom Layout Example

12. Inventory Sorted by Location

13. 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

14. 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

15. 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

16. 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

17. 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)

18. 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

19. 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

20. 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?)

21. Adjustment Procedure Example Store room staff2.2. Review Part History to identify reason for error. Correct Inventory variances as soon as possible. No item should continue to be incorrect for longer than two days after first identified. If investigation takes longer than two days to correct, adjust the item so that the inventory is accurate. An offsetting entry can later be made once the reason is found. 3.3. Determine that an adjustment is necessary. Use adjustment only when no correctable reason for the variance can be found. (Refer to reasons for possible causes for variances.)

22. 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.

23. 9. Enforce Security Maintain system security by assigning individual user ID’s and sensible permissions Secure the stores area, if possible. Limit access. Publicize zero theft tolerance policy

24. 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

25. 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

26. Parts Management Best Practices Other Suggestions? Questions? Comments?