Spare parts inventory management in warehouse: a lean approach

Inventory management plays a vital role in attaining the desired service level and prevents excess capital from being tied up in the form of dead stock. This paper presents a framework to effectively determine the items subject to obsolescence in an automotive spare parts warehouse. The inventory management techniques are applied to minimize the costs and a framework is proposed based on ABC-XYZ and FSN analysis to prioritize the spare parts based on their criticality. Further, the importance of items in the warehouse is carried out to eliminate the dead stock. The ABC classification findings reveal that A-class items accounted for 10.39% and hold the highest inventory value grouping. XYZ classification concludes that much priority should be given to the management of 52.7% of items under the Z category as the demand trend of these items is highly fluctuating. The N category items have no demand in recent times and need immediate attention, thereby preventing further unnecessary procurement. Thus, based on the ABC-XYZ and FSN analysis, the non-critical items, i.e., the non-moving items having fluctuating demand, are sorted out.