SPARE PARTS MANAGEMENT
The client is a multi-national manufacturer of aircraft, recreational vehicles, locomotives and other transportation products. They operate manufacturing sites worldwide and rely on spare parts (spares) to support their manufacturing processes and after sales product support and maintenance.
Growth of spare parts was growing exponentially based on aging aircraft and significant sales increases of aircraft. Management of spares was done by a large group of expeditors and buyers. Tools used were primarily home grown. There was no forecasting tool. There was no formal sku classification tool or replenishment system. Determination of required inventory was done manually and with less than sophisticated tools.
Several solutions were required as mentioned above. In depth business analysis had to be conducted to identify what the business requirements were. The analysis included current system capabilities, understanding current processes, labour relations’ constraints, and identifying new business requirements. Following the analysis, technical specifications for developers had to be documented. Best practices had to be established and put in place both from a process standpoint and relating to inventory management techniques.
A forecasting tool was also required. Detailed business requirements were documented and weighted by function. A list of potential vendors was created and ultimately a short list of vendors was created.
The solution included the development of tools, which included:
- Sku classification system
- Stock/non-stock indicator
- A new sku replenishment system (min/max format)
- New screens for expeditors/buyers to work with
- Demand forecasting system
The tools were built in-house in MS Access and VB. The formal business requirements were converted to technical specifications. Coordinating activities between business and the developers had to be done to ensure the business requirements were met. Sign offs by business were done at strategic points during the project.
The replenishment, classification, and stocking indicator tools were developed to the satisfaction of the client and are in place today. In terms of the forecasting tool, a clear winner was identified and the client made the decision to purchase the demand forecasting system.