Due to an increase in the reliability of a part or an improvement of the repair vendor performance, certain spare parts might not be required any more at a certain point of time. Instead of keeping such units and incurring the overheads associated with the holding cost, units can be loaned out or even sold. However, it is important to determine the risk associated with reducing inventory to prevent an unnecessary drop in the Service Level performance.
The Overstock Analysis function comprises continuous monitoring of the number of units in the repair cycle and reports part numbers that are overstocked. The User can then conduct an analysis to determine the risk of reducing the default inventory allocation. For any part number for which a reduction will still allow to maintain its associated Service Level performance above the committed service level, overstocked units can be tagged and considered for loaning out, sales, or replacement against subsequent incoming unserviceable units which can then be put on hold for repair until the inventory level has dropped to the reduced default allocation level.