It is that time again, that the Netherlands will elect a new government. Over the next weeks, the news will be focused on the upcoming election. I do not want to mingle at all within all the different opinions, but I can see similarities between forming a coalition of parties and making choices about stock levels of spare parts. Perhaps this will make you wonder, so allow me to explain.
After we have voted, we are not there yet. After this the chosen parties need to decide what the composition of the new government will be. Which parties will rule? During the process of forming a coalition many opposing interests and opinions will come to the table? This can make it a quite time-consuming and inefficient process. We see something similar happening when we have to determine how many spare parts to put on stock. This is particularly difficult with hardly moving items because there are little to no data available. In those cases, we need to change the decision-making process. You cannot simply decide not to stock an item because, for example, it could be a critical item or an item that must be in stock from a safety point of view. The problem, however, is that this group of items in a service or maintenance company is quite large. In other words, determining these inventory levels is an important component in the management of spare parts. The large size of the number of materials makes viewing and discussing very time consuming. Almost like forming a coalition.
Working with opposing interests
To determine these levels, typically, a discussion is required between different departments due to conflicting interests. From a maintenance point of view, stocking seems to be the best advice, but preferably based on an objective determination. Whereas, from a financial point of view, as little stock as possible would be the advice, to only cover the critical risks. Furthermore, the planner does not want to face long delivery times when there is no stock. And as mentioned before, it might be that certain items are stocked from a safety point of view or restrictions come into play on “where” and “how” to store. By bringing all these opinions to the table one wants to avoid an unnecessarily long discussion about unverifiable opinions.
We have a solution for this within Gordian. Instead of discussing all the individual materials, we only want one discussion to develop one company-specific decision-making model. That model on its turn will determine the required stock levels without discussion. The basic idea behind this is that we divide the entire decision into different steps. For example, it is quickly resolved when we know if an item is no longer in an active asset. In addition, the determination of whether an article is critical can be rational when this is done based on a set of carefully chosen questions. In this way there is only one discussion about the model and once that is decided, we can follow the steps in the model individually. Of course, there will still be a handful of articles that we have to review together, but because this is a limited number, we can get rid of them relatively quick. This makes the whole process fast and unified.
Imagine if political parties also use such a model to form a new coalition. I am afraid that this entails more discussion than the determination of a stock level, but perhaps there is still some improvement to be made in reaching a coalition. In any case, let us hope that we will soon have a well-functioning government again, especially in these rough times!