8 Criteria for Creating Optimal Inside Plant Inventory Safety Levels

Posted by Ashley Little on October 14, 2014

plugs_eight_criteriaIn the telecom industry, some equipment is critical to maintaining normal operations. Inside a good deal of that equipment, circuitry packs called “plugs or plug-ins” make up the puzzle pieces that connect our calls and make communication possible.

Ensuring that enough of each type of plug is available, working and easily found in an organization’s inventory can mean the difference between a normal operational day, or an interruption of service.With regard to vital equipment like this, one would think that more is more, correct?

Unfortunately, this is not the case. Simply amassing unchecked multiples of items is not the best course of action for a few reasons.

First, excess multiple, working items called spares, take up valuable space in warehouses and on trucks; space that could be better put to use or liquidated, if empty. Secondly, telecoms pay taxes on every item in inventory, meaning keeping too many important—and often high dollar—assets hanging around but not in service is not cost-effective. Finally, the more a company keeps in inventory, the more complicated and time-consuming keeping up with each item becomes. Having to wade through slammed-full shelves to find the correct piece helps no one.

To combat these issues, telecommunications companies use a number of methods to calculate and then set inventory safety levels, sometimes called min/max levels, with a goal of maintaining just enough critical plugs, but not too many. We have discussed ways to set general safety stock levels before. We have compiled a list of eight things to consider when calculating optimal levels when it comes specifically to “plugs."

Check the bandwidth

The greater the bandwidth supported by the plug, the more critical it becomes to operations. Bandwidth is defined by the number of ports and port speed associated with the plug, so make note when determining how many to keep on hand.

Consider redundancy

Think about the failsafe measures built into the plug itself, or if there are redundant assets ready to pick up the slack during a failure. If a good amount of backup is available, you may not need to stock as many of the item.

Note the plug’s function

Be sure to know the function of the plug, including the plug’s ACN.1, FRC and ECN designations to determine its specific utility and determine criticality.

Make sure it is still made

Finding out an item has been discontinued by its manufacturer is not something your company wants as a surprise. Checking to see if a plug has been MFD (manufacturer discontinued) will ensure you can stock up. Further, noting items as MFD in inventory is also helpful, as it explains quickly why excesses of a certain type of plug are necessary.

Know the plug’s failure rate

Not all assets are created equally. Knowing the failure rate of an item can help a company decide to maintain a higher safety stock level for a certain problem-prone asset, or a lower level for more reliable equipment.

Think about labor cost

Some very large plugs called “blades” are unwieldy and can take a good amount of time and labor to move around. Considering the effort and time it will take to replace these large items should go into determining how many to keep in reserve.

Consider capacity

The larger the capacity of a plug, the more critical it becomes. Keeping a close eye on optimal levels of vital assets is important to keeping things running seamlessly.

Know who is shipping and when

Knowing how long it takes to replace a plug in inventory should also go into figuring how many to keep in stock. Long supplier lead-time? Perhaps a few more than typical of that item should be kept on hand.

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