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Manufacture Discontinued Assets: Do Not Hoard, Label!

POSTED BY: Ashley Little on 12.11.2014

labeling manufacture discontinued assetsIn the CO (central office) world, as well as elsewhere in the utility and telecommunications universe, there will always be specific pieces of equipment that are considered “critical”—that is, vital to operations and maintaining uninterrupted service. These VIP assets maintain a special place in warehouses and CO facilities—and in inventories. We have already detailed a few criteria for determining what assets are crucial enough to warrant must-have status, but one of those designations, manufacture discontinued assets or MFDs, can present a tricky situation for organizations.

Periodically, manufacturers will discontinue or no longer support pieces of equipment. This immediately makes that asset a hot commodity. With no more to be had, using, repairing, and keeping as many as possible of these soon-to-be extinct items on hand becomes a top priority. Typically all goes well, until someone conducts a thorough inventory.

Inventories are by nature designed to organize assets, remove unneeded equipment from a company’s books and clean up—and clean out—storage facilities. Safety stock levels dictate how many of a certain item is needed as backup, but do not automatically cover special situations where surplus “excess” is legitimately needed. Because it is the job of the person or company conducting the inventory to remove duplicate items, MFDs can be unintentionally caught up in the purge.

In our experience, companies know this, and upon notification of from the manufacturer that an asset is to be discontinued, some will hoard and hide their MFDs in anticipation of inventory. There is, however, a better way.

Labeling assets as MFD during inventory—rather than hiding or hoarding them—is a simple fix that offers a few benefits:

 

Labeling assets as MFD lets you know what you really have and makes it accessible when you really need it.

Rather than simply guessing how many of a critical and discontinued asset is on hand, labeling those items as MFD and making them visible, quantifiable and searchable in inventory makes a lot of sense. Clearly defining most-critical items means never worrying there may not be another one available in the event of a malfunction. It also offers a company warning when stock is getting dangerously low and an alternative must be identified.

 

Labeling assets as MFD justifies the financial impact of not taking excess spares off the books.

In addition to basic organizational benefits, inventories can also reduce a company’s financial burden by taking unused equipment out of warehouses (freeing space), and off the books (freeing capital). When a company hoards a large number of one asset, the typical reaction during inventory will be to reduce the number of spares of that item. Labeling an asset as MFD justifies the excess—and the financial impact of keeping more equipment than typically necessary on shelves.

 

Labeling assets as MFD keeps recordkeeping true and accurate.

One main point of conducting a thorough inventory is to account for all assets, determine if they need to be in inventory and discharge those that are not needed. If a company is hiding equipment, the act undermines the integrity of the inventory itself. Rather than leaving items “out”, simply labeling them as MFD keeps the process honest and the results accurate.

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Topics: Telecommunications Asset Management

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