September 19, 2019, 11:28 pm

Have you outgrown your perfect repairables management system?

The system was perfect. Everyone knew what to do when a component failed. Everyone knew how to determine where to send the part for repair. Everyone knew the system was available seven days a week. Everyone knew how to find out when the next repairable item was available. Everyone knew how to find out what was replaced during the last repair. The system was perfect... Then Bill left.

In the above example, the system, was, of course, a person. The person held all this information in their head. If your business is small enough, or a one-man show, you probably have a very efficient repairs management process using the best computer ever, the human brain. But for larger businesses, a system must be used to apply a business strategy. Total business costs must be balanced against business risk. Inventory levels must be optimised.

An effective repairables management system provides information and guides the user to a course of action.

erp 1

It will answer questions such as:

  • Who prepares the items for dispatch?
  • How do you know if the item is to be repaired or thrown away?
  • Who raises the purchase order?
  • What is the standard for the rebuild?
  • Who is the quote for repair sent to?
  • Do you repair the item straight away or hold it for repair?
  • How many repairable items do I need to stock?
  • How do we make sure the system doesn’t order another item while one is out for repair, leading to overstocking?

So the question becomes, what do we need to do to be able to answer all these questions? Let’s start to look at each of these questions and how the cost benefit equation can be optimised.

Who prepares the items for dispatch? Who cleans the repairable item?

To prepare the item for dispatch, seal any openings and remove fluids. Open compartments lead to damage and increase the cost of repairs. Leaking fluids lead to incidents.  Clean the item so that it can be transported safely and comply with any transport requirements. Nominate the responsible person for these tasks. Consider whether you want your most expensive technicians doing these functions. Can it be integrated into a warehouse function? Can a Trades assistant do this work? Write this into your business processes.

How do you know if the item is to be repaired or thrown away? Where is the repairable item sent for repair?

This is where an up to date ERP system, inventory management system or site management system should provide this information to provide guidance to those on the ground. Don’t rely on certain people having this knowledge in their head. Don’t rely on people making on the fly decisions. Hopefully your choice of repairer has been pre-determined based on cost, quality and timeliness of repair.

Who raises the purchase order? When is the purchase order raised?

Typically, suppliers don’t like working on things without work orders. Automate your system so that the purchase order will be generated when the repairable item is removed from stock. This will reduce you administrative burden.

What is the standard for the rebuild?

Do you want it restored it to a zero-life condition? Are there updates that should be incorporated into the rebuild? Updates may increase the cost, but it may improve the life, allow for better performance and reduce the risk of some of the parts used in the rebuild becoming obsolete.

Who should the quote be sent to? Who approves it?

Send the quote to someone that understands the scope and cost of the rebuild. Will it be worth repairing or should it be completely replaced? You need to challenge the scope and challenge the cost to get your optimum outcome. Give this person the authority to approve the work. Don’t waste the time of middle and upper management approving these when it adds no value.

Do you repair the item straight away or hold it for repair? If it is held for repair, where is it held?

This is where a clear strategy is required. Repairing the item straight away adds an immediate cost to the business that may be unnecessary. Delaying the repair will improve your cashflow but may increase risks to the business. Holding the item on site will add to the repair turnaround time and potentially the equipment downtime if it is required urgently. Holding the item at the repairers may come at a storage cost.

How many repairable items do I need to stock?

Excessive stock is an unnecessary cost to the business and a lack of spare parts can result in expensive downtime. Understand your critical equipment, however, don’t hold multiples of every part for the critical equipment. Use inventory optimisation tools or software to determine what stock you need.

How do we make sure the system doesn’t order another item while one is out for repair, leading to overstocking? How do we trace the item before, during and after the repair?

Once again, the set-up of the ERP system or inventory management system is critical to ensuring that the system doesn’t reorder ‘new’ repairable items. The ERP system should have a way of identifying where the item has gone for repair and at what stage of the repair it is at. It will take dedicated resources to ensure the ERP system is maintained. The effort will be rewarded.

Assetivity's multi-functional consultants, who understand and embrace both leading-edge Maintenance practices as well as Inventory Management processes, are in a unique position to assist you to truly optimise your spare parts inventory holdings.

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Paul Corrigan

Senior Consultant

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