EFFECTIVE SPARE PARTS MANAGEMENT - exicon.website

1 15th INTERNATIONAL OPERATIONS & MAINTENANCE CONFERENCE IN THE ARAB COUNTRIESUNDER THE THEME: SMART MAINTENANCE CONICIDE WITH THE 15TH ARAB MAINTENANCE EXHIBITIONTOM HLAD KLogioEFFECTIVE SPARE PARTS MANAGEMENT21)Go for preventive maintenance!2)Eliminate process problems3)Segment your SPARE PARTS portfolio4)Evaluate SPARE PARTS criticality5) SPARE PARTS MANAGEMENT starts with good forecasting6)Use special methods for intermittent demand items7)Consider the whole life cycle of your equipment8)Implement a good information system for SPARE PARTS and maintenance inventory managementEight rules for efficient SPM3Go for preventive maintenance4 STANDARD PLANNEDPLANNEDMAINTENANCECORRECTIVE(REPA IRS)UNPLANNEDPREDICTIVEPROACTIVEDEFFERED CORRECTIVEPLANNED PROCUREMENTINVENTORY MANAGEMENTGo for preventive maintenance!80% 20%?5 Preventiveorcorrrective?Numberofpreventi vevscorrectivetasksDonwtimescausedby failuremaintenanceTotalmaintenancecost6 Eliminate process problems7 SPARE PARTS PROCESS8 EliminateprocessproblemsSP NEED IDENTIFICATIONNo direct responsibilityof maintenance engineers/technicians for their items and SPARE PARTS FOR ORDERRFO created by someone else, not the technician who step of RFO may not be necessary in the are ordersapproved?

2 Whoapproves?Approvingin IS workflow or by signing a paper copy?Orboth?ApprovingbothRFO and thenissued orderagain?Too many approvers, complicated procedure and on high levels of information available to procurement, poor SPARE PARTS identification the buyer hardly knows what should be bought, additional communication with maintenance technician is or incomplete procurement specification in the SPARE part issues in case of sudden SPARE PARTS are not consumed in of external material even in case the part is on RETURNS AND REFURBISHED SPARE PARTSR efurbished PARTS return to warehouse while new are price of refurbished items is much higher (or lower) than the non-realistic value of items on or impossible returns of PARTS issued but not control of PARTS dismantled from the maintained object (the information system has no information about these).RECEPTIONP roblems with missing (undelivered) documentation for the received material (certificates, declarations).

3 Lostspare PARTS documentation only paper-based identification of SPARE PARTS in the to finditems count discrepancies, physical stock different from information system value of stock in the information NDHowdo youstorebearings?Sklad NDHowdo youstorebearings?16 Whereare thespares? An examplefroma largecarmaker020,000,00040,000,00060,000 ,00080,000,000100,000,000120,000,000140, 000,000160,000,000180,000,000200,000,000 0117301894018980289402898048630489304897 0749407498081800888108936089840989009896 1288412896134901349413498137581486314894 148981P4931P4971P8961P9431P9992189421898 2249822898234992389624893299903089239892 3989752999 Sparepartsinventoryvalue[?]FoundryPresss hopMachining, enginesCental warehouseWeldinglinesWarehousesA-Z17 SPARE PARTS PROCESSW hoisresponsibleforsparesstock?Who/howoft enapproves?Procurementspecificationmissi ngInsufficientsparesidentificationAre returnsto warehouseallowed?

4 18 Sparepartsprocess benchmarkingInternalbestpractice19 ComparisonofinventoryturnoverPLANT 1 PLANT 2 PLANT 3 PLANT your SPARE PARTS portfolio21 Service level x locked-in capitalInventoryvalue90 %95 %98 % 99 % 100 %?Servicelevel/ availabilityWhatitemsare reallyimportant?Whatitemsare reallyimportant?Dominant categoriesC and D are typicalforsparesOn-hand inventoryvalueConsumedquantity22 ABC analysis on hand inventory valueValueofavailableinventory23 ABC analysis consumedquantityIn spareparts, C and D categoriestypicallyprevailQuantity24 Sparepartsinventoriessegmentation consumptionfrequency(in quantity)25 SPARE PARTS inventories segmentation consumption frequency (in value)26 WHEN?HOW MANY?WHEN?HOW MANY?Strategic segmentation of SPARE partsCONSIDER CONSIGNATIONCONSIDER CONSIGNATIONCONSIDER CONSIGNATIONCONSIDER CONSIGNATIONBUYBUYBUYBUYCONSIDER CONSIGNATIONCONSIGNATIONBUY BACKBUYTYPE OF FORECASTCONSUMPTION FREQUENCY27 Exampleofbuybackapplication20 pieces were purchased for turnaround in 2010for M CZK, but these SPARE PARTS were not used during the turnaround and will be stored until thenextturnaround in in this case can save 9 M CZK (360k EUR) on storage and locked-in capital costBetween shutdowns28 FSN and VED classificationVEDFSNFast-movingSlow-movi ngNon-movingVitalEssentialDesirable2930 Evaluate SPARE PARTS criticalityEffectsoffailureProductionlos sesLinksto assetregister, criticalassets(RCM)

5 DeliverytimeRepairabilityNumberofitemsin useMaintenanceplanningPart lifespanFailureprobabilityFailurecharact eristicsFailureanticipationPrice% costofcapitalCostofinventoryholdingFailu reprobabilityImpactsofsparepart unavailabilityLeadtimeandotherparameters Evaluatesparepartscriticality31 = 10 000 EUR x 10%100 EUR / day100 days1 per 2 years1 000 EUR5 000 EURKEEP ON STOCK<Criticality calculationINVENTORY HOLDINGUNAVAILABILITYLEAD TIMEFAILURE RATE32 CriticalityassessmentphasesEconomicalass essmentTechnicianHold on stockPotentiallycriticalpartDo not stockAdvancedmethodsto set optimallevelsCriticalityassessmentTechni cianConsumeSellorScrapOptimum SP stock33 Applicationforcriticalityassessment34 Login a heslo35 Postupn hodnocen kriti nosti 36373839 SparepartscriticalityanalysisresultCriti calityscoreSpare PARTS items4041 SPARE PARTS MANAGEMENT starts with good forecastingQuantitative methods x Common senseQuantitativemethodsCommonsenseMAKE EFFICIENT!

6 MAXIMIZE!42 Quantitative methods x Common senseQuantitativemethodsCommonsenseUnexp lained/ RandomUncertaintyoffutureconsumptionMaxi mizeMake efficientMinimize43 Forecastingstep-by-stepVisualisationofti meseriesFor better understanding of the time seriesCalculationofaccuracyAbsolute and relative errors, evaluation on testing seasonCalculation of forecasts using all available methodsSelectionofthebestmethodBest accuracyand reliability132444 Whatforecastingmethod is best for SPARE PARTS ?1%1%2%3%5%9%79%Konstantn modelRegresn modelHoltovo exp. vyrovn n Jednoduch n Klouzav pr m rWintersForecasting nen mo n ConstantmodelRegressionmodelHolt s averageWintersForecasting impossible????4546 Use special forecasting methods for intermittent demand itemsT denn spot eby NDHistorie t denn ch spot eb (t dny)413173001234811825272632 SPARE PARTS intermittent demandWeekly consumption history (weeks)Weeklyspare part consumption (pieces)QUESTION: What reorder level should be set in order to ensure required availability of a SPARE part?

7 47T denn spot eby NDHistorie t denn ch spot eb (t dny)413173001234811825272632 BootstrappingBootstrapping = random sampling from history of consumption for lead-time period issampled from historySample 1: Consumption in6 weeks = 5 pcsWeeklySP consumptionWeekly consumption history (weeks)Example: SP lead time is 6 weeks48 BootstrappingVzorek 2: Spot eba za 6 t dn = 0 ksT denn spot eby NDHistorie t denn ch spot eb (t dny)413173001234811825272632 Sample2: Consumption in6 weeks = 0 pcsWeekly consumption history (weeks) SPARE part consumption (pieces)49 BootstrappingVzorek 3: Spot eba za 6 t dn = 12 ksT denn spot eby NDHistorie t denn ch spot eb (t dny)413173001234811825272632 Sample3: Consumption in6 weeks = 12 pcsWeekly consumption history (weeks)WeeklySP consumption50 BootstrappingVzorek 4: Spot eba za 6 t dn = 2 ksT denn spot eby NDHistorie t denn ch spot eb (t dny)413173001234811825272632 Sample4: Consumption in6 weeks = 2pcsWeekly consumption history (weeks)WeeklySP consumpiton51 etnosti spot eb v jednotliv ch intervalech (ze simulace)Spot eba b hem LT intervaly (ks)05101560 000030 000 Kumulativn pravd podobnost spot eby100 %Example of 100 000 simulations of SP consumptionTarget: SP availability (Service level) = 99%OPTIMUM inventory = 9 PCSC onsumption during leadtime(pcs)Cummulativeprobability of consumptionFrequenciesofconsumption(from simulation)52 Bootstrappingapplication a case availabilityOriginalinventory: 17 000 EUR(49 pcs)Sparepart lead-time: 32 daysRecommendedinventory29 pcs10 000 EURS avings7 000 EURI ntermittentdemand53 Bootstrapping in sparepartsmanagement informationsystem54 Minimum level2 pcs55 Life cycle thinking.

8 Consider the whole life cycle of your assetsPROCUREMENTMAINTENANCERENOVATIONCO STPROFIT?PROFITMAINTENANCE CREATES VALUE!ASSET LIFE CYCLE56 Assetlifecycle(Kari Komonen, EFNMS EAMC)INVESTMENTUTILIZATION$$57 PROCUREMENTMAINTENANCERENOVATIONCOSTPROF IT?PROFITMAINTENANCE CREATES VALUE!ASSET LIFE CYCLEPROFIT5859 Efficient SPARE PARTS MANAGEMENT ConclusionsEfficient SPARE PARTS MANAGEMENT 8 rulesPreventivemaintenanceSmoothSP processesSegment yourSP portfolioAssesscriticalityGoodforecastin gSpecialmethodsforintermittentdemanditem sLifecyclethinkingGoodinformationsystem6 0 Goodinformation system for SPARE PARTS managementQuantitativemethodsCommonsense UncertaintyMaximize!Make efficient!Minimize!ForecastingInventoryl evelsOrderingInput of technicians and procurementCriticality analysisForecastaccuracyand reliability61 Efficient SPARE PARTS ManagementMAINTENANCE VOLUMESPARE PARTS INVENTORYMAINTENANCE VOLUMESPARE PARTS INVENTORY62 ThankyouTomas , Czech