SPARE PARTS MANAGEMENT A PROFIT MAKING CONCEPT
- Presentated By Rakesh Singh
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What is Materials Management?
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Materials management is that coordinated function, objective of which is to provide optimum service of material at minimum cost. It covers efficient management of material in all its aspects such as, planning, indenting, procurement, store keeping , material handling, distribution inventory control ,disposal of obsolete/scrap material.
“Inventory” may be defined as usable but idle resource. If resource is some physical and tangible object such as materials, then it is generally termed as stock. Thus stock or inventory are synonymous terms through inventory has wider implications.
Source
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Input
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Usage or output
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Tap
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Cistern
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Drain Plug
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Definition of Spare Part
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“Spare part means a part or sub-assembly or assembly for substitution i.e. ready to replace identical or similar part or sub assembly or assembly, if it becomes faulty or worn out and includes as accessory or attachment in the same regard”
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One of the important function of materials management is, inventory control. For effective inventory control , it is necessary to have good management of spare parts.
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A) Production Inventories
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D) M RO Inventories
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B) Work in Process
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C) Finished goods inventories
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1) Raw Materials
2) Bought out Components
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1) Consumables
2) Spare Part
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1) Packaging Materials
2) Finished Goods
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Types of Inventory
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Semi-finished products
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Classification of Spare Parts.
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(A) Accordingly to Usage :
i) Regularly used spare parts: Ball bearing, gasket, oil seal etc.
ii) Irregularly used spare parts: Gears, compressor unit etc.
(B) Accordingly to Functional characteristics.
i) Insurance and capital spares:
Spares have build in stability hence probability of its failure is very low during life time .
ii) Rotable spares:
Spares which are repaired and stored for re-use and can easily be interchanged.
iii) Overhauling spares:
Spares which are used on a planned and scheduled basis after pre-determined number of hours of working.
iv) Maintenance Spares:
The spare parts which are regularly consumed during use or operation of machines or vehicles.
Need for scientific management of spare Parts
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Keeping machines in good repair requires timely replacement of defective or worn out parts, older the machine the importance of spare parts goes up.
Factors which call for scientific spare parts management are as under:
1. Random & unpredictable pattern of failure.
2. Long lead time required for procurement.
3. High rate of obsolescence.
4. Non availability and improper information system.
5. Uneconomical to manufacture as demand is small.
6. High rate of stock out cost.
Characteristics of Spare Parts Demand
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(A) Criticality: It is important to provide a good supply of spares for critical parts.
(B) Failures types
i) Wear & corrosion.
i) Accidental Failure.
ii) Consequential damage.
(C) Required Usage: Some parts need replacement frequently but some parts have long life.
(D) Cost of Spare Parts: High value- Critical, Low value- Non Critical, High Value-Non Critical low value -Critical.
(E) Spare Parts Availability: Indigenous /Imported
Operating Policies
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The spare parts management policy should take the form of general rules for spare provisioning and should cover six main type of decision:
(A) Form: as spare machine, as spare assemblies and as spare parts.
(B) Source: There are three main “Sources” which are
(i) Repair: Welding, strapping or brazing of cracked castings.
(ii) Make: Making of Gaskets, o rings, studs etc.
(iii)Buy: from OEM or agent.
(C) Whether to stock: It’s decision matter that which items to stock and which to order on demand. The prime purpose of stocking is to reduce lead time & stop cost.
(D) Standardization: The process of standardization logically leads to simplification or variety reduction.
(E) Ordering Methods: Auto indenting, order on demand etc.
(F) The spares budget: The actual expenditure on spare parts and the actual investment in stocks, will depend on the policy decisions described above. The budget & policy can't be making independently.
Techniques for Spare Parts Controlling
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A) Item Reducing Techniques
i) Standardization / Variety Reduction
ii) Codification
B) Quantity Reducing Techniques
C) Reduction of “Lead Times”.
i) Manufacturers spare stock
ii)Mode of transport iii)Credits
D) Preventive Maintenance
Example of V Belts Standardization
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Departmental Responsibility for Spare Parts Management
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Maintenance Department
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1. Preventive maintenance (P&M).
2. Standardization.
3. Generate New, alternative sources of spares supply, such as repair, make.
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Production Dept.
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1. Regular watch on equipment & parts.
2. Stabilize operations.
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1. Develop sources of supply.
2. Provide estimated procurement lead time data for control of inventories.
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Purchase Dept.
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Inventory Control
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1. Provide historical data.
2. Preventive maintenance of stock items
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Profit Making Concept
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Conclusion
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The spare parts management can be a profit center for the organizations. If, we can manage inventory scientifically by increasing inventory turn over ratio and applying spare part control techniques.
