What are some good practices people have for managing the inventory levels and stock of supplies (three types of items, consumables, and spare parts)?

Those with experience in procurement can answer: Production materials are divided into raw materials for production and auxiliary materials. Generally, low-value, easily consumable items have a certain amount of inventory kept on hand, while items that are high in value, high in usage volume, or high in importance have data models established for them. These models are usually based on procurement data from the previous 3 to 5 years – when orders should be placed each year? When to place bids, etc. – By analyzing the needs of one’s own factory, it’s possible to predict procurement actions in advance and make preparations accordingly. Additionally, it’s important to maintain a database of suppliers: which ones they are, where their goods are located, what the quality is like, what the delivery times are, and what their attitude towards cooperation is like. This way, once an order is placed, there will be no confusion. As for the quantity of spare parts, this is managed through the warehouse system; records of spare parts are kept, indicating when they were stored or taken out, which department or person handled them, and how much was taken out. Minimum thresholds are set, and once these thresholds are exceeded, an order for procurement is issued. Regarding warehouses, in most corporate organizations, low-value, easily consumable items are stored in warehouses that don’t need to be integrated into the company’s main system, but their details still need to be recorded in the company’s internal records. High-value, high-volume, or highly important items, on the other hand, are tracked via a networked system to facilitate tracking of their flow and overall allocation. Warehouses are usually organized by category; some companies organize them by product type. In any case, although the general process seems similar across companies, actual implementation can vary. Any model must be adapted to the specific circumstances of each company. For example, our company used to have an old warehouse, and later a new one was built. At first, there was chaos regarding auxiliary materials and spare parts. Later, other departments started storing too many items in the new warehouse. When the management saw this, they became upset and asked if we intended to separate from the company. As a result, everything had to be reorganized, with items now organized by product type

Plans can’t keep up with changes; the consumption levels from previous years are not suitable for this year

Then it can only be estimated. Generally speaking, the three types of catalysts used in factories are not added arbitrarily; if one type of catalyst is increased, the catalysts used upstream and downstream will also increase accordingly. This leads to greater equipment wear and higher consumption of auxiliary materials. This is what results in an increase in factory production. In terms of purchasing, it means that the amount spent this month is significantly higher than in previous years

When it comes to the purchase volume of certain types of products, if one is not sure about it, it’s necessary to gather more information on the surrounding circumstances. If a bidding process is used, the exact quantity required must be determined; production meetings need to be held, and signatures from key personnel are needed before a procurement plan can be issued. If purchasing from existing suppliers is chosen, it’s important to determine whether the product is already available on the market. If so, orders can be placed with factories; for smaller quantities, reliable traders can be used to cover the shortfall. If the product is not yet available on the market, is scarce, or is a patented product, then it’s necessary to determine a specific quantity to purchase. Once the goods arrive at the factory, a consumption record should be kept, and based on daily usage, it can be estimated how many days the stock will last. With some surplus left, consultation should be held with the person in charge of production or management to decide whether to place a second order. In short, the principle behind a factory’s procurement decisions is to ensure smooth production while striving for the lowest possible cost and highest quality. Production takes precedence over everything else. Beginners should prepare at least two plans: one for normal inventory receipt, and another for dealing with situations where inventory receipt does not go as planned. If production comes to a halt, reports will be sent up the chain of command. If procurement cannot resolve the issue, then the procurement manager will step in; if that doesn’t work, it’s the industry manager’s turn, or even the CEO. In short, a series of responses will occur. Usually, when such things happen, it means the procurement team has done its job. So, it’s important to pay close attention and take extra care. Once one gets used to this, it will become easier

When it comes to procurement in factory settings, it’s important to go to the site often and take some time each day to visit there. You will benefit a lot from this – for example, in terms of process knowledge. It’s too complicated to learn from books; by going to the site, you can understand most of it quite easily. There are also many other important aspects to consider. For instance, when you start working with a catalyst manufacturer for the first time and the product is new, everyone isn’t sure about how much to use. In such cases, you should ask the workers on site how much is sufficient. By comparing this with what’s specified in the contract, you’ll have a clear idea. I once encountered a situation where the first two batches of catalysts were fine, but the third batch had some parts that were damaged. I guessed that the problem arose during handling. That is, after the catalysts arrived at the site and were being loaded, half of them were found to be damaged (not to mention any problems that might have occurred during loading or unloading). I happened to be at the site that morning, so I rushed back and criticized the supplier harshly, blaming them for delivering damaged products. I immediately asked them to take corrective action. After lunch, my supervisor came to my desk, knocked on it, and asked, “Do you know that half of the XX catalysts that arrived are damaged?” Whose goods are these? I immediately showed my supervisor the work that had already been done; his anger diminished by half right away, and he said, \"Keep working on it.\" It scared me so much that I broke into sweat. On the spot, I had to change tasks. I bought valves from a valve factory in Nantong last year; those valves kept breaking down, so I was careful and went to check them during installation. Damn it, the installers tried to cut corners – the pipes had deformed over time due to long-term use, but instead of correcting them, the installers just used hammers to fix them. Thankfully, I took pictures. Three weeks later, at the production meeting, the workshop reported that the newly purchased valves were leaking, and asked me to discuss the issue with the supplier; I showed them the photos. Thankfully, otherwise it would have been a long struggle with the supplier

Read the guidelines more – it’s hard to put it in words

There are no standards for this; it can only be determined based on the individual circumstances

Looking at the above purchases, they are all from reliable suppliers; we haven’t seen any of our company’s suppliers come to the site

For some materials, it is necessary to consider their consumption levels; for others, patterns need to be taken into account, while for still others, their importance is key.

If everyone is as responsible as you, the products purchased will definitely be of good quality