The problem of spare parts management can be approached systematically and scientifically only if the mutual dependence of the policies and practices governing operations, maintenance and logistics is fully recognized at all levels. Although the term ‘logistics’ in its global sense includes the sense signifying only the inventory management function, because, in most fair-sized organizations, it is distinct from the maintenance functions.
The starting point for a systematic approach to spares management is, therefore, a usage or operational directive in broad outline, formulated initially at the time of the introduction of the equipment updated from time to time as changes are made in usage of the equipment.
The directive should invariably be drawn up in consultation with the maintenance and logistics personnel, in the light of the design and maintenance characteristics of the equipment on the one hand and the spare parts provisioning considerations on the other. Similarly, whenever usage plans have to be changed, the Maintenance and Logistics Personnel must be consulted because of the implications to them of the intended change.
In short, a disciplined approach to operations, maintenance and inventory management is essential if equipment are to be exploited for full and effective performance.
Requirement of spare parts for equipment arises on account of one or more of the following occurrences : -
Determination of the requirement of spare parts must, therefore, be based on a precise knowledge of the types of maintenance / overhaul routines and the behaviour of the equipment in operation to obtain an idea of the probable failure, breakdowns, etc.
The list of spares to be procured initially at the time of the introduction of the equipment must be based on a critical study of the technical literature about the equipment and a judicious technical appreciation of the manufacturers’ recommendations for maintenance and spares.
The precise definition of the ‘initial’ period of dependent on a number of factors are :
Broadly, the initial spares should include the following :-
For consumption during regular maintenance routines that will fall due during the ‘initial’ period.
For most equipment, it is a good policy to include in the initial spares those required for the first overhaul may not fall due within the ‘initial’ period. This provides a comprehensive range of spares to keep the equipment operational even if some random failures/breakdowns were to develop or accidental damage were to occur during the period.
Approaches to determine the quantities in each of the groups of spares indicated above are discussed in the succeeding paragraphs.
Once initial spares have acquired and the equipment goes into operation, it is necessary to keep the inventory under regular review for replenishment purposes. An important input for the review is maintenance experience. After all, the initial spares were obtained largely on the basis of technical judgement. An information system that makes available to the logistics group relevant maintenance information is a pre-requisite to successful periodic replenishment of inventory.
In most organizations, large numbers of the same equipment are not held and, therefore, the consumption of spares is invariably in small quantities. There would be relatively fewer items in the spare parts inventory which can be classified as fast moving, unlike in the general stores inventory. Thus the applicability of inventory control method like EOQ method, or its variant, the (S,s) method, would be doubtful for spare parts. The periodic replenishment method appears to be quite adequate and, therefore advisable. Also, as consumption of items is in relatively small quantities, depending on maintenance routines and equipment behaviours, an annual replenishment cycle can be considered to be quite sufficient.
An annual review of the stock of complete equipment / major assemblies is necessary to identify any depletion in the spares cover initially provided under insurance and total replacement quantities. If items have had to be replaced due to ir-repairable damage, breakdown or failure, a comprehensive review of the stock must be undertaken after a thorough consideration of all relevant factors like the remaining life of the equipment, stock in hand, etc. Replenishment quantities so identified need to be indented.
Minor sub assemblies and other parts which are regularly consumed during the maintenance routines and upkeep of the equipment need to be annually replenished, based on the consumption pattern experienced for each item. An approach which takes into account both the cost and criticality of the item and which is based on a statistical consideration of past consumption data is discussed in the succeeding paragraphs.
There are some equipment and major assemblies which have periodically to be laid up for a considerable time for elaborate overhaul routines. It may not be feasible to hold up production or operation till the item is returned after overhaul. In such cases, fresh one from stock has to be issued and the one in use removed to the workshop for overhaul, after which it is returned to stock.
The classification of items into ABC categories accordingly to their annual usage cost is well known. However, when dealing with spares, it is also considered essential to classify them according to their criticality in use. The criticality categories used are Vital (V), Essential (E) and Desirable (D). An item will, therefore, bear the twin category label; AV, AE, BD, BV, etc.
Depending on its classification as above, it is essential to know what level of assurance it is to be stocked. Level of assurance, expressed as a percentage say, 90% indicates that in 90 cases out of 100, the item will be available in stock for issue on demand. It is easy to see that the higher the level of assurance specified, the higher the inventory level to be maintained, with all its attendant costs. For various cost-cum-criticality categories of spares, the levels of assurance can be specified as under :
|
V |
E |
D |
A |
50% |
Low |
Low |
B |
70% |
50% |
Low |
C |
95% |
70% |
50% |
Dept. A Practical Categorisation.
In practice, however, the more detailed the classification, the more elaborate becomes inventory control decision rules. In practice, therefore, it becomes advisable to simplify working by classifying inventory into as few categories as possible. Only two groupings are recommended:
It will be noticed that items recommended lower assurance levels in accordance with Gen. Apte’s formulation will be stocked at a slightly higher level of assurance in the above dispensation. This may have to be accepted rather than introduce very elaborate decision rules, which would entail loose and diffuse control spread over an extensive staff.
Insurance spares are irregularly consumed spares. With a high reliability of performance. These are of high value and are not required for routine maintenance but would cause a lengthy shutdown of vital equipment or the entire plant in case they are not available besides would cause high stock out cost.
Whether to buy an expensive assembly or the complete equipment as insurance spare is indeed a difficult question to answer. The probability of its being required is usually very low; yet if it is not readily available when required, the lost in production / sales / goodwill is so heavy as to be forbidding.
It is normal for many organizations to order one set of insurance spare part along with the equipment itself for all critical equipments where lead time of procurement is long and repairing of the damaged part locally not possible. Before ordering, it is necessary to examine the cost/benefit of the following three alternatives.
Before adopting the policy of one spare for each equipment, which if extended can give a standby factory, a selective approach is to be adopted. Otherwise, many of the spares which would not be used during the operating life of the machine get accumulated in the store when the machine is finally scraped.
A sound information system or a data base is very essential for forecasting requirement of spares, planning the procurement, controlling the consumption of spares, keeping check on inventories and thereby keeping down the overall cost of spares management. It provides the basis for decision concerning planning and controlling functions.
Various types of information essential to fulfil the above requirements are :
The system would start with maintaining the stock ledger, incorporating the receipts, issued and stock on hand at any time. Based on whether the reorder level system or periodic review system is used, the initiation of purchase requisition would be made. Purchase orders must be entered into the system so that follow up can be initiated.
While the issues and receipts are being recorded, information regarding department and equipments needing the same part shall be fed into the system so that usage history data can be build to enable projection of demand. The schematic operation of the system is indicated below:-
The system should also provide to generate a number of monthly, quarterly and annual reports. These reports could help top management as well as spare parts executives in planning and controlling operations of spare parts management. The reports can give comparison of performance with previous month or year.
The periodical reports needed for Management control are :