Procurement Methodologies to Optimize the Inventory Levels of Spare Parts
Sathish N1, S P Anbuudayasankar2, Maghara Deepan3, Narassima M S4
1S P Anbuudayasankar, Department of Mechanical, Amrita Vishwa Vidyapeetham, India.
2Sathish N, Department of Mechanical, Amrita Vishwa Vidyapeetham, India.
3Maghara Deepan, DGM Supply chain &operations – Global support centre, ELGI Equipments Ltd.
4Narassima M S, Department of Mechanical, Amrita Vishwa Vidyapeetham, India.
Manuscript received on 5 August 2019. | Revised Manuscript received on 11 August 2019. | Manuscript published on 30 September 2019. | PP: 1662-1669 | Volume-8 Issue-3 September 2019 | Retrieval Number: C4437098319/19©BEIESP | DOI: 10.35940/ijrte.C4437.098319
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Inventory is essential for the smooth running of any organization. It acts as a link between procurement and sales. Inventory constitutes of current assets/ working capital of the organization. Thus, it is very essential to have suitable control over inventories. The purpose of inventory management is to ensure availability of parts in sufficient numbers as and when required and also to minimize the accumulation. The main objective of this paper is to devise an inventory management method for spare parts management system in order to utilize the space effectively and to stabilize FIFO system which would help the company personnel to keep record of spares precisely. A three dimensional approach is performed using sales order line frequency, seasonal frequency and sales value through ABC analysis. In addition to this, four different procurement techniques are adopted viz., one bin, two bins, multi bins and zero bin. Demand variation is measured for a period of last one year and this parameter is included during the calculation of the inventory maintenance. It is evident that a large amount of money is saved without compromising the customer order fulfilment.
Keywords: Inventory management, ABC analysis, Bin system, Simulation, First In First Out (FIFO).
Scope of the Article: Software Engineering Methodologies.