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Logistics formula - when to stock subcomponents?

Logistics formula - when to stock subcomponents?

Logistics formula - when to stock subcomponents?

Quick question. There is supposedly a forumla out there that helps you determine if you should stock a subcomponent or not. ie Do I want to stock break shoes or should we just stock the whole break assembly, as an example.

The forumla, to the best of my knowledge, contains the following variables:

Cost of subcomponent
Carry cost (taxes, interest, facilities, etc.)
install time
est. use
quanity assembly cost

Supposedly one should be able to plug numbers into a formula that would let you know quickly if stocking the subcomponent would be a good/bad idea.

Ring any bells?

RE: Logistics formula - when to stock subcomponents?

Way too simple.

Add supplier dependability and availability of alternate suppliers at least.

Other than that - calculate inventory turns.  

As it is now you are mixing dollars and lead times.  They do relate but they can also be entirely separate.    

Thomas J. Walz
Carbide Processors, Inc.

Good engineering starts with a Grainger Catalog.    

RE: Logistics formula - when to stock subcomponents?

Make sure customer goodwill is in the formula somewhere.  I loathe automakers and their parts suppliers who continue to take us hostage with ridiculous practices regarding replacement parts.
Root cause on historical failures/service issues should drive how a part or assembly is handled on the spare parts end of things.
I just really appreciate (not) the idiots who decided it was better to sell an entire fuel pump assembly unitized into a neat plastic housing that contained the pump, check, valve, filter, etc, when all I really needed was a stinking check valve.  Who doesn't like to pay $500 for a $15 part, I always say!!!
Consumers are not all as stupid as corporate thinks they are!

RE: Logistics formula - when to stock subcomponents?

Thanx guys.  To be clear, a manager asked me if I could hunt down this formula.  He used it back when he was in the military.  It's supposed to be very simple.  The idea is that you plug the numbers in and if gives you a rough idea if it is even worth considering.  ie  If that subcomponent only breaks once every 5 years and it takes 10 hours to install, then it doesn't make sense to stock it.

Regarding customer satisfaction, that is part two of the forumla which is to apply the brain and a little bit of common sense to the equation.


RE: Logistics formula - when to stock subcomponents?

It must be in Army manual somewhere.  Find out his former rank and specialty, and get the training material he had to read to qualify for the job.


Mike Halloran
Pembroke Pines, FL, USA

RE: Logistics formula - when to stock subcomponents?

Remember, what applies in one context may not apply in another.

The Army will have certain assumptions about labor rate/cost burden/criticality... hard wired into that equation which may not apply in a commercial situation.

Posting guidelines FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm? (probably not aimed specifically at you)
What is Engineering anyway: FAQ1088-1484: In layman terms, what is "engineering"?

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