Sparesfinder – they’ll help you, er, find your spares. Which is very good (part 1)

You get some software firms whose name is mysterious – Emptoris or Ariba come to mind. Some you feel it must mean something but you’re not quite sure what – Trade Extensions perhaps? Others seem designed to be forgotten (we won’t name names here. We’ve forgotten anyway...)!

But sometimes you get one that makes it pretty clear what they’re about, even if it doesn’t exactly sound like the most glamorous business in the world – and that would include today’s subject, Sparesfinder, a UK based but very internationally focused company.

Actually, in some ways their name doesn’t do them justice, as they are more interesting than you might first think, but when it comes down to it, “finding spares” is a large part of their capability and purpose.  Indeed, their business is built on one of those beautifully simple yet powerful ideas, that starts with a basic concept but leads on into some surprisingly impressive benefits.

Organisations in manufacturing principally, but also utilities, construction, or capital projects hold inventory or stock. Much of that stock is made up of thousands, or even tens of thousands of individual parts – not all technically “spares”, as some could be manufacturing components for instance. But basically they have lots of physical “things”, and those things are probably in the case of a large organisation stored in multiple warehouses, stockrooms and facilities, possibly in many different locations or countries.

And  this leads to problems that we suspect will be familiar to anyone who has worked in this sort of environment. The classification and recording of these items will almost certainly be inconsistent, so a 5 cm left handed widget will be recorded in one stock system as “5cm LHW” and in another as a “Left-H Widget 5”. Different providers of essentially the same product may have different designations or product codes for the item, as will the various internal systems.

So the data complexity and lack of consistency / cleanliness causes a number of issues for those organisations, including:

  • Over-stocking; holding more stock of a particular item because we don’t realise that three different line items are actually the same – so our one month’s stock of three separate items is actually three month’s stock of a single item.
  • Additional purchase cost – we buy more because we don’t realise that we already have the item we want in stock.
  • Inability to check for stock across multiple locations – in an emergency for instance, asking our facilities around the world “do you have a 5cm LHW in stock” may get the (incorrect) response of “no”.
  • Consequent efficiency reductions such as production interruptions as we wait unnecessarily for stock to arrive.
  • Loss of procurement leverage with suppliers, because of a poor understanding of what we are buying from them, common items, or possibility of substitution to achieve more leverage (if I don’t realise for instance that other suppliers produce the same item).

So these issues cover both P&L and balance sheet issues – and working capital is very relevant to many organisations at the moment. Clearly, as we move into uncertain times economically, managing stock levels is a vital way of minimising cash requirements. This is an area that many procurement people don’t focus on too closely in my experience – yet this is an example of where we can add real value.

Anyway, these are the issues and problems that Sparesfinder set out to address and solve through their data management solutions. And we’ll explain more about them and how they operate in part 2 of this short series.

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