In Spare Parts Purchasing and Controlling

1. With standardisation, the buyer, the vendor and the inspector are in common terms. So, disputes and controversies are eliminated and litigations are avoided.

2. Quality assurance through standards strikes a balance and guarantees economical buying.

3. Buying on brand names limits the choice of suppliers. But with standardisation, the purchase to brands is not necessary, so it extends the sources of supply and cuts across proprietary rights. Arrival of new vendors obviously reduces prices.

4. It also helps in improved availability.

5. Standardisation helps in saving time and effort in screening of vendors.

6. Further, it helps the organisation in reduction of negotiation burden before purchase while reduction in inspection costs after purchase.

7. Standardisation is best tool to reduce the variety of spare parts of similar or same type. Lesser spare parts inventory is more conducive to better planning and more accurate forecasting.

8. Better control over spare part inventory and a better spare part turnover ratio (annual requirements divided by average inventory).

9. Standardisation reduces the number of items, thence less inventory holding leading to less carrying costs. The control is better and easy if number is less.

10. Losses due to obsolescence and surplus can be better controlled.

11. In stores management of spares,

• Lesser number of items required to be stocked in smaller quantities,
• Quicker deliveries,
• Lower lead time,
• Needs smaller storage accommodation.
• Capital cost on warehousing becomes less.