Nature of Slow Moving Items
As stated earlier, slow moving materials are those which are not regularly demanded and their movement off the shelf is very occasional, say once in six months or so. Examples of slow moving materials can be — spare parts and some special purpose materials for projects required only for a certain kind of project activity. Inventory models valid for fast moving models are not applicable for slow moving items due to lack of regular demand pattern. Generally slow moving items are quite expensive and therefore one has to first decide whether to keep them all in stock and if to keep them in stock then in what quantity further difficulty of slow moving parts is that initial over-buying decision could take years to remedy the situation due to rarely occurring demands.
Some Inventory Policies for Slow Moving Spares
We shall illustrate our approach to manage the inventory of slow moving items with spares inventory problem as a substantial percentage of spares come under the slow moving categories. Some of the strategies that could be possibly adopted for efficient inventory management of slow moving spares are as follows:
- If spares are required only at pre-specified time such as at the time of major scheduled maintenance for replacement, then it is better not to stock them but to place procurement order sufficiently well in advance, keeping lead times in mind, so that these arrive just in time when these are needed.
- If the part gives adequate warning of impending break down, then also the best policy is to place an order the moment we get the warning. Adequate warning refers to the case when the lead time required is less than the warning time. This shows that major improvements in slow moving inventory are possible by cutting down the lead times.
- For inadequate warning spares we must keep the stock. Generally maximum stock level will be 1 or 2 and the (S-1, S) or one-for-one ordering policy is very useful. This means placing an order for one spare when one is consumed.
