Spare Parts Management & Decision System
Engineering Spare Parts system to provide objective analysis on stocking levels
Very often, the Engineering Stores, incorporating the spare parts for supporting the manufacturing processes for a plant, are treated as a black hole where nobody really understands who makes decisions on the spare parts that should be stocked and how many should be held any any one time. Very often, upon completion of a new installation project, the vendor will provide a recommended list of spares and the associated quantities. Engineers can be quite slow to challenge the content or question the logic used to create the list because nobody wants to take responsibility for the possibility of a stock out.
We were tasked by a large Medical Device Manufacturer to come up with a process for calculating an objective estimate of the cost of stocking or not stocking a part. The logic was then applied to the full contents of the Store to see discrepancies in the actual stocking figures.
The system compares the estimated cost of stocking the part to the estimated cost of not stocking the part. The decision to purchase or not, and the quantity to purchase, is based solely on this comparison, hence an objective outcome. The cost of stocking the part takes into account, among other things:
- The initial purchase cost
- The building storage cost (e.g. space/ light/ heat etc.)
- The management cost (e.g. cycle counting etc.)
- The cost of obsolescence (becomes obsolete before being used)
The cost of not stocking the part takes into account, among other things:
- The downtime cost of lost production
- Downtime mitigated by back-up sets
- Downtime mitigated by pre-warning of failure (e.g. inspection regimes/ expected failure modes etc.)
Spare Parts Management & Decision System
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