Advantages of a Satellite Stocking Program

In many manufacturing plants, a parts room occupies considerable space, uses non-value-added staff and takes employees away from their jobs to get the supplies they need. Is there a more-efficient setup? Some plants are switching to satellite stocking programs to be more nimble and cost effective.

Centralized vs. Satellite Stocking

Traditionally, if workers need new gloves or a machine part, they take the old ones to a parts room where a clerk exchanges them for new ones. With a centralized setup, the parts room is stocked with everything needed throughout the plant and is staffed full-time during all shifts.

Conversely, with a satellite stocking program, department managers and supervisors are in charge of parts for their shifts. Here's how this setup works:

• Each department has a locked parts cabinet.
• At the beginning of the first shift, the department manager reviews the inventory control sheet, writes up an order for supplies and turns it in to the parts clerk. The goal is to have everything needed for all shifts that day. With a well-organized system, the manager should spend no more than 10 to 15 minutes each day ordering parts.
• The parts clerk fills and delivers orders for each department. From that point on, the parts room is closed for the day.

If a machine part breaks, the employee takes it to the department manager or shift supervisor who unlocks the parts cabinet, exchanges the part and notes it on the inventory control sheet. If the part isn't stocked in a department cabinet and the parts room is closed, a maintenance worker with a key lets the supervisor into the parts room.

Benefits of Satellite Stocking

The principle saving from a satellite stocking program comes from the elimination of parts room jobs. In smaller plants, the parts room can be closed once parts are delivered. In larger plants, it may be necessary to leave it open for all shifts, but staff numbers can be reduced.

Employees spend more time fulfilling their duties when parts are stocked in each department. The time savings can be considerable, depending on the distance to a centralized parts room and the number of trips employees make.

Finally, with its new scaled-down function, the space allotted to the parts room can be significantly reduced. There's also the potential benefit of tightening inventory control when department managers and shift supervisors take charge.

Right for Your Factory?

Contact your CPA to discuss the pros and cons of implementing a satellite stocking program in your plant. If you decide to switch over to this new model, your CPA can help managers understand how to stock parts for each department and get your new-and-improved parts and supplies program running smoothly.