Master of science thesis in supply chain management. A perfect order rate can be improved by strict adherence to warehouse and. A team of experts is available night and day to assist our customers with all of their parts needs. Top warehouse performance kpis legacy supply chain. As plant manager, you need to know how to determine which spare parts are needed to make up an effective and comprehensive inventory system. Pdf file log26 warehouse sample warehouse management policy and procedures guidelines outline. In other cases this inventory is, hopefully, dedicated to support companies maintenance, repair and operations. However, if your spare parts are for use on equipment that your company owns or controls then this probably is the site for you. Update inventory control system and parts catalogue. Whether a maintenance and repair organization mro is internal to a larger business, or providing maintenance services to an external customer, efficient spare parts inventory management plays a critical.
For example, kpis for 2pl warehouse will be different from that of a 3pl warehouse. Key performance indicators kpi s are frequently used in general business to evaluate the success of everything from a specific department to an entire enterprise. Best kpis for heavy equipment parts and inventory departments. A high value for this kpi may lead to reduced gross profit margins but too low a value could indicate unrealised market opportunity. This kpi measures how many orders your warehouse successfully delivers without incident. Performance measurement system for warehouse activities. Spare parts inventory management shares many traits with standard inventory management, but requires an extra layer of cost consideration. The higher the figure for the kpi, the better return a dealership is getting from holding stock. Make sure that garbage and debris bins are available throughout the warehouse. Spares management system belongs to the nonqualified category, which can be viewed as the ceiling in the homm spares. Kpis are the most important metrics in your business. Recommend related parts and accessories, which may be required for a job. Among others, these measurements refer to transportation, warehouse and supply chain aspects.
Efficient spare parts management 8 rules preventive maintenance processes without problems segment your sp portfolio assess the criticality good forecasting special methods for intermittent demand items asset life cycle good information system. And help identify areas that when combined with a solid procedure and warehouse management system will have a direct effect on both overall business costs and customer satisfaction. The information was then analyzed and a performance measurement system for warehouse activities was developed. The warehouse must always have sufficient stocks to cover the leadtime for replacement stocks to avoid stockouts. A measure of the efficient utilisation of current investment in inventory. Similarly, a fg warehouse s kpis will be quite different from that of a rm warehouse. They help you answer difficult questions so you can measure the health of your retail store and determine the steps you need to take. When it comes to your parts and inventory department, there are really only four key metrics that you need to focus on to make more informed decisions. The contents of such system should cover the spares whole life, including spare parts selection, purchasing, installation, operation, maintenance, quality tracking, spares obsolete, and the like. Below, ive outlined the four most important kpis for the parts and inventory department in the heavy equipment industry. In other cases this inventory is, hopefully, dedicated to support companies maintenance, repair and. Maintenance activities often entail the need for replacement part availability in the warehouse.
Practical spare part management is the foundation for reliable plant operation and is crucial to a plant managers success. Extending the life of equipment is the sole focus of our dedicated parts staff. Warehouse kpis key performance indicators are the answer. Developing meaningful kpis the following methodology provides a guide through the process of developing clear objectives and key performance indicators kpis to support a strategy. A strategic framework for spare parts logistics 86 university of california, berkeley vol. Spare parts management is about, how spare parts handling must be systematized and structured to enable efficient inventory management that leads to improved availability and reduces the amount of capital expenditure. When defining a key performance indicator for maintenance a good test of the. Decisions in the framework are decomposed hierarchically and interfaces are described. Pdf a strategic framework for spare parts logistics. Good information system for spare parts management quantitative methods common sense.
A logistics kpi or metric is a performance measurement that is used by logistics managers to track, visualize and optimize all relevant logistic processes in an efficient way. Here is the complete list of the most important logistics kpis and metrics, that we will discuss in this. They allow you to set a benchmark for monthonmonth improvements. Spare parts inventory management training, resources, and coaching for individuals and teams. This is perhaps the most important kpi for parts and inventory because it reflects the overall efficiency of the entire supply chain. To ensure employees have the skills to quantify impact, and provide timely direction for an individuals contribution at all. The goal of this study was to carry out single and multiaspect abc analyses in spare parts warehouse. Notify service personnel when special parts or backordered parts are. A key performance indicator kpi is defined as a method to measure quantifying objectives to enable the measurement of performance. The focus of our parts and logistics organization is to provide on time, accurate and convenient service. A process model that focuses on the operational tasks within warehousing was designed. Trying to get your mower, snow plow, salt spreader or snowblower back in action. Without metrics, there really is no way to know what is and isnt working in a warehouse. Accordingly, its advisable to stock selected spare parts to avoid unnecessary production downtime caused by long lead times.
A replacement part is then automatically, if desired, ordered and delivered to your location. Maintenance spares inventory management performance. Upgrade spare parts supply chain deloitte china auto industry spare parts management benchmark survey white paper 3 market trend. Thats where your key performance indicators kpis come in. Dealership parts department, kpi, benchmark, ratio, stock policy, supply, target, sales, motor dealer, manufacturer, oem, backorder.
Exploring lean principles in automotive aftermarket for spare parts distribution. Spare parts management maintenance manual, maintmaster. It is possible to establish analogies for the kpis to the offshore wind sector. Lean practices help identify errors or inaccuracies before orders leave the warehouse. Warehousing kpis what to measure and what to improve. Maintenance, repair, and operations mro in asset intensive industries. All these activities implemented successively allow to reduce the level of excess and obsolete stock while, at the same time, optimizing the entire spare parts inventory maintained in a warehouse. Also discussed are a criticality matrix, benchmarking activities, and expected outcomes when implementing key performance measurements. Piles of trash and debris are a potential fire hazard and hinder evacuation. Spare parts planning and control for maintenance operations. Exploring lean principles in automotive aftermarket for. Spare parts are essential in ensuring proper operation of this system of maintenance by replacing parts, and so they also a ect daily services provided by equipment such as public transportation rolling stock, aircraft health care mri scanners, and military operations military equipment and weapon systems. Many warehousing kpi s tend to be focused on external performance, such as ontime shipments that directly impact customers.
Smartturn is committed to fostering a selfsustaining community of inventory and warehouse experts through knowledge sharing and learning. Whatever your motivation, we invite you to read this ebook and raise the level of operational excellence in the inventory and warehouse management innovation communities. Als advanced logistic systems abc analysis in spare parts warehouse katarzyna grondys czestochowa university of technology, poland abstract. Through optimisation of spare parts management, the accenture team has helped its client achieve improvements of various kpis. Figure 1 control pyramid of business objectives figure 2 cascaded objectives to achieve the business purpose. It describes the processes to ensure that kpis have targets and owners. How to measure warehouse key performance indicators. Key performance indicators for maintenance are selected ensuring a direct correlation between the maintenance activity and the key performance indicator measuring it. The problem of excess and obsolete inventory management. Spare parts logistics at a glance integrated global contract logistics services, including all aspects of logistics planning, control and implementation scalable standard components. Many companies, large and small, have storerooms or warehouses containing inventory ready to ship directly to customers. Learn the formulas and the priority for each kpi for mro and stores. Table 1 outlines the comparable kpis explored in the following case study.
This paper presents a framework for planning and control of the spare parts supply chain in organizations that use and maintain highvalue capital assets. Edu present prime examples however, some of the case study firms fit. Spare parts business will become the key competition area as chinas automotive market matures, the potential of the aftersales market has started to be gradually realized. In this scenario, the cost of goods is the cost for a company to deliver parts to customers, excluding administrative expenses. This study has reached its purpose to develop a performance measurement system based on scor. The average aggregate inventory value is the cost of all items on inventory.
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