Want to reduce stockouts, overstocks and downtime while improving reliability, cash flow and operational efficiency?
Consider one of the inventory management methods that MCE offers for maximum flexibility and efficiency, such as vendor managed inventory (or consigned inventory), customer-managed inventory, or proactive stocking agreements.
Other inventory management methods include kanban systems, RFID systems, and mobile management systems.
One option for tracking and managing your mission-critical items: implementing MCEs vendor managed inventory (VMI) and using the min/max inventory method to ensure critical parts are in stock when you need them.
What is Min Max Inventory Management?
The min/max inventory method involves setting minimum and maximum inventory stock levels for each item, triggering a reorder when inventory levels drop below the minimum.
The minimum level is decided by calculating the average consumption rate over a certain period and adding a safety margin.
The maximum level calculates the average consumption rate, lead time and storage capacity.
This straightforward method helps manufacturers ensure necessary stock is on hand when needed, without the added costs of overstocking or associated storage costs. The key to using this method successfully is knowing you have a supply partner who understands your business needs and offers reliable lead times.
Revolutionizing Operations: How MCE’s VMI Solution Transformed Aerospace and Industrial Workflows
A leading manufacturer in the aerospace and industrial markets revolutionized their operations with MCE’s VMI solution — saving time, improving safety, and cutting costs.
By introducing a centralized, color-coded bin system and real-time inventory monitoring of min/max levels, employees significantly reduced the time spent searching for parts while improving accuracy and safety standards. The program minimized inefficiencies, streamlined replenishment, and provided actionable data insights, for smarter purchasing decisions and reduced errors.
This tailored solution optimized workflows and empowered teams with improved training and min/max inventory management, ensuring seamless operations across the facility.
5 Benefits of Min Max for Effective Parts Inventory Management
Using the min/max inventory control method in a VMI program offers several business benefits:
- Reduced Stockouts and Overstocks
- Improved Cash Flow
- Enhanced Operational Efficiency
- Reduced Machine Downtime
- Improved Reliability
Reduced Stockouts and Overstocks
Min/max inventory management sets clear reorder points based on consumption and demand forecasting, so when the stock reaches a minimum level, it automatically triggers replenishment. The maximum limit acts as a ceiling, preventing replenishment past a certain quantity. The stock is always readily available, never overstocked.
Improved Cash Flow
By recording and analyzing consumption data and establishing patterns over time, businesses can adjust min/max levels to match demand, especially for seasonal business. This method prevents capital from being unnecessarily tied up in inventory or rogue purchases, allowing for better cash flow management across the business.
Enhanced Operational Efficiency
Min/max inventory management enables simplified and streamlined order replenishment, saving on costs associated with purchase orders, administrative duties and storage costs. However, there are other operational benefits as well. Establishing min/max levels reduces the need for manual inventory checks. Also, readily available inventory saves workers time and energy searching for stocked items.
Reduced Machine Downtime
Lacking critical repair or replacement parts costs thousands in lost production. When a company sets minimum and maximum inventory levels on critical machine parts, they have the parts and tools on hand to quickly replace failing components, minimizing the time equipment is down for repair. Additionally, having adequate maintenance, repair and operations (MRO) supplies on hand improves preventative maintenance programs, potentially eliminating unnecessary downtime.
Improved Reliability
Effective inventory control impacts manufacturing reliability by improving production consistency, supporting preventative maintenance programs and minimizing disruption due to equipment breakdowns. Fewer production delays, better supplier lead times, reduced defects, and enhanced quality equate to better production rates, greater customer satisfaction and higher profitability.
How MCE Sets Up an Effective Min Max Inventory System
When you establish a vendor-managed inventory (VMI) management program through MCE, we assist in the following:
- Identifying Key Components and Analyzing Data: We help you prioritize inventory parts and materials for production-critical tasks versus maintenance-critical items.
- Determining Min and Max Levels: We help you calculate the appropriate min and max levels based on demand, lead times and usage patterns. We also offer insights on adjusting levels based on historical data and forecasted needs.
- Monitoring and Adjusting Inventory Levels: Inventory purchases shouldn’t be guesswork. We use data analytics and technology to regularly review and adjust min/max levels when necessary, considering seasonality and production cycles.
- Easy and Straightforward Technology: We offer the option of using Clear Spider Software in our CMI and VMI programs, a mobile app for tracking and managing inventory. The software allows our customers and MCE reps to scan barcodes to monitor stock levels for manual part reorders. We also offer automated RFID systems for streamlined min/max bin management, which triggers an automatic reordering when a bin reaches a pre-determined level.
>> Transform Your Supply Chain: From Reactive to Proactive Inventory Management
Optimize Operations with Parts Inventory Management Programs
We simplify your supply needs.
MCE has every resource you need to keep your critical parts in stock. We partner with the best manufacturers for your industry and have inventory management programs to streamline procurement, saving time and money. We offer:
- Vendor Managed Inventory (VMI)
MCE manages customers’ inventory, including min/max levels and restocking using Clear Spider technology. VMI offers scalability to fit customer needs, working anywhere from remote areas to dedicated onsite facilities.
- Customer-Managed Inventory (CMI)
Customers manage their own inventory but benefit from using our Clear Spider technology to track inventory. This mobile app allows customers to quickly and accurately track and manage inventory for simplified ordering, even for customers in remote areas.
- Proactive Stocking Agreements
For our VMI clients, MCE can proactively reserve inventory based on max levels, past usage, and lead times to reduce out-of-stock risks. This stock is dedicated to the customer, ensuring the availability of critical components even during high-demand periods.
Solve your procurement and inventory control challenges with MCE.
We do more than sell innovative solutions for automation, engineered systems, fluid power, filtration, rotating equipment, compressed air, flow control, lubrication and instrumentation challenges.
MCE keeps your operation running smoothly by ensuring product availability and offering customized solutions with on-demand technical support, service and repair.
Ready to evaluate your current inventory practices for ways to streamline purchasing and improve operations? Reach out to MCE to schedule a FREE assessment.