Why would anyone hold on to surplus parts if there is almost no chance that they will be used?
Except for nearly new parts and some genuinely specialist items, it's unusual to realise more than a few percent of an inventory's value on disposal, so no one wants inventory instead of money in the bank. Neither will surplus stock be worth more tomorrow: what's certain is that these are depreciating assets.
Perhaps it is because of uncertainty: what if we disposed of the stock and then they were needed one day? And if we don't want to scrap them, what other options are there?
Uncertainty, and the possibility of making a wrong decision about excess stock, can be an excuse for doing nothing while its value decays away to nothing.
By evaluating the risks and payback of every option in economic terms, MRO Analytics puts information in your hands that can help you make the right decision today.
- Is there somewhere in the organisation that needs the surplus items now?
- How many are really needed?
- How many will we need next year? In five years' time?
- Is it better to dispose of excess stock, or just run down the inventory as parts are used?
- Is it better to run down slow-moving stocks or to sell them now?
- What risks are we really taking by managing the stocks at a lower level?
- Would the decision be the same if the maintenance requirements changed, if the equipment utilisation changed, or if the plant's life were extended?
When you make the decision, you can be confident that it is transparent and defensible.