The RET improves provisioning to dispose obsolete stock

Job Salters , Business Controller at the RET: “The provisioning model of Gordian gave the RET insights to manage obsolete stock and to facilitate stock disposal.”


Provision based on the probability of obsolete parts

Aanpak - Lorum ipsum

The RET is the main public transport operator of Rotterdam. The maintenance department is responsible for carrying out preventive and corrective maintenance activities for trams, subways and buses. Spare parts are kept in stock in order to carry out the maintenance jobs. The Logistics department suffers from (predominantly) expensive parts that have become obsolete. Depreciating the value of spares is only allowed to a limited extent, which means that disposing the parts involves taking the unforeseen costs.

Gordian implemented a provisioning model at the RET that complies to international laws and regulations. The model assumes that the longer a stock item has not been used, the bigger the risk to become obsolete. Therefore, the provision is built up based on a percentage of the working capital depending on the amount of months of stock on hand and the amount of months without any demand.


The RET continued independently

Resultaat - Lorum ipsum

Gordian delivered an Excel product including work instructions. According to the RET the new model is simpler, more conservative and thereby facilitates disposing obsolete stocks in a better way. The next step is to minimize obsolete stock. This requires a good assortment policy. This will be addressed in 2020.

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