Control it before it controls you
By Brandon Battles
How do you react when you hear the word, inventory? Does it send shivers down your spine when you think of all of the headaches it can cause? Does it cause excitement as you think about the vast quantities and varieties that you can hoard? Or does it cause you to shrug your shoulders and walk away? One thing is certain inventory can cause a variety of emotions, some well founded while others not. The purpose of this article is to eliminate some of the irrational emotions concerning inventory by gaining a better understanding about the subject. To gain that understanding we will examine inventory by answering the following questions:
• Why do we have inventory?
• What factors can influence the levels of inventory?
• What are the costs associated with inventory?
• What are some techniques for managing inventory?
Why do we have inventory?
Before discussing inventory and its use in aviation, let’s recognize a more basic premise. All of us deal with inventory in our everyday lives. Consider an example from home. How many of you have a supply of food stored in the refrigerator or pantry? What else could we call that supply? That’s right we could call it inventory. In essence, we have chosen to stock a certain amount of inventory to match our demand or consumption over a certain period of time that should reduce the number of trips required to the store or supplier. A fuel tank in our car is another common type of inventory. The tank allows us to travel for an extended distance and time without having to constantly stop for fuel. We get more efficient use (availability) out of our car when we don’t spend an inordinate amount of time refueling.
Aviation and its need for inventory is not different. We carry inventory to improve the efficiency (availability) of our aircraft. Using spares as an example, we carry a part in inventory to have it available when an aircraft requires it. The part is installed and the aircraft returns to service sooner. Inventory is not just limited to spare parts but can also include such items as fuel, labor, aircraft, and ramp space.
In the perfect world, a world without inventory, we would have an item available when required for consumption. (In essence the just-in-time inventory concept) However, we do not live in a perfect world, as far as supply and demand goes, therefore we must have inventory. Inventory makes up for the inefficiencies or changes that we have in the supply and demand chain. Inventory can help us have the right item at the right time but recognize that inventory comes with a cost, which we will discuss later.
What factors can influence the levels of inventory?
If stocking the right part at the right time were easy, the need for this article would not be necessary. As a matter of fact the need for an entire discipline of management that focuses on inventory and its management would not exist. If inventory and the issues that surround it are not easy, then what are the factors that can complicate the overall objective to have the right part available at the right time? The following items touch on some of those factors.
• Probably one of the most obvious and frequently heard factors in the aviation industry is that the vendor of a part has trouble supplying the part. Stated another way the vendor has its own issues of supplying the right part at the right time. As a result you will compensate for the inefficient supply system. You will purchase the part, if able, prior to needing the part and stock the item in your inventory until required. The net effect is an increase in inventory for your organization. If there are enough parts that fit into this scenario or a few parts that have a large dollar amount, then your inventory can grow quickly.
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