Spare Parts Categorisation and Replenishment

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What is it all about?

In day-to-day business massive amounts of spare parts replenishment orders must be processed within limited capacity and budget constraints. How do you re-order effectively and efficiently?

The replenishment orders not only relate to stock items, there are also numerous uncoded non-stock requests which are time consuming to process. Further, delayed deliveries need to be expedited and an infinite number of ad hoc requests also require attention.

The large volume of these requests makes it essential to know how to prioritise workloads, while concurrently determining the importance and urgency of requests. Assessing prioritised lists of requests by making use of a systematic approach in deciding whether or not to order is the next step in the process. What follows is making smart decisions about the quantity, timing and placement of orders. Learners are asked to consider whether these are once off requests or could the purchase requisition be consolidated into a single purchase order. Learners gain insight into identifying symptoms of poor performance – and what they can do to mitigate them.

This course provides learners with the tools they need to apply a systematic and economical approach to the spare parts ordering process so that re-ordering becomes effective and efficient.

Who should attend?

Operational material planners
Store clerks
Store managers and buyers

What makes it different?

At the end of the course the learners will:

understand how to prioritise their workload
apply a management by exception approach (only assess when necessary)
apply smart decisions for purchase requisitions
understand the basics of demand and lead time patterns and inventory control parameters
recognise ineffective / sub-optimal inventory control parameters
understand how to initiate actions with other disciplines to sustain good performance.

Course outline

Prioritise purchase requisitions

Given the substantial volume of purchase requisitions
which have to be assessed, we need to understand
what to do first. In this module we teach smart but
simple analysis techniques such as Pareto analysis
and smart ordering. Learners gain an understanding
of how to arrange their purchase requisitions into a
sequential prioritised list. Purchase requisitions
affecting overall performance can then be attended to
first.

Assess purchase requisitions

In this module learners are given practical tools to
help them identify how to assess purchase
requisitions. Questions such as the following are
answered:

How do we start the purchase requisition
assessment process?
What simple checks should be performed, for
example: is there approval to buy the spare part; is
a duplicate available?
What does management by exception mean?
What typical interpretation tools can I use?

Make smart decisions

In this module learners are taken through the final
decision-making process and learn how to make
smart decisions. Learners are shown how to
determine whether they should:

accept the quantity on the purchase requisition
and create a purchase order
delete the purchase requisition
change the quantity on the purchase requisition
change the status of the purchase requisition to on-hold while carrying out further investigation.

The principle of lot sizing theory is delved into and
learners are taught how to evaluate previous ordering
decisions for effectiveness.

Sustain performance

After dealing with the purchase requisition, the question becomes: how can we sustain performance in the future?

Learners review scenarios in a practical way by investigating, for example, that the purchase requisition was generated by the system based on incorrect parameters. In this instance inventory parameters must be changed to prevent reoccurrence.

Symptoms of bad performance should be connected to relevant resource to improve performance in a structural way (eg initiating an action such as selecting new suppliers or to (re)calculate minimum / maximum levels).

Assessment

The assessment is in the form of a practical assessment
where learners receive a number of purchase requisitions
and use the knowledge gained to answer questions and
complete required processes.