After reading this article you will learn about the management of spare parts for equipments.
Machines worth crores of rupees are idle for want of spares, on the other hand huge stores are lying which perhaps may not be used. Thousands of crores of rupees are locked in obsolete items. This emphasize the need of paying more attention on management of spares.
Improvement in the capacity utilization and cost reduction can be achieved by better spare parts management. Studies have indicated that 40 % of the total working capital is tied in spares inventory and out of this about 25 % is obsolete in terms of value.
The objective of Spare Parts Management is to provide right parts at right time and at right cost. “A spare part can be defined as, ‘part identical to the part of a machine which needs replacement due to wear and tear during the operating life of equipment.’
Spare Parts’ Problems:
1. Requirements of spares are uncertain in quantity and in time.
2. It is uneconomical to manufacture the spare parts as only small number is required.
3. When the manufacturer of the original equipment changes its models, then it is difficult to procure the spares for that equipment.
4. The range of spare parts is very large.
5. Cost of spares becoming obsolete is very high.
6. Excessive buildup of inventory.
7. Due to large range of spare parts, identification of spare parts is a real problem.
8. It is difficult to decide as, how much to stock.
9. Lead time for procurement of spares vary too much, ranging from few minutes to several months depending upon source of availability. This problem is major whenever equipment is an imported one.
10. When equipment’s are purchased from different countries with different specifications, then large stock of spare parts has to be kept.
Categorisation of Spares:
Spare parts are generally classified as:
(i) Maintenance spares,
(ii) Rotable spares,
(iii) Insurance spares,
(iv) Over hauling spares, and
(v) Commissioning spares.
(i) Maintenance Spares:
These are those which are consumed regularly like, belt, bearings, oil seals etc. These spares should be stocked after building a data based on the consumption pattern.
(ii) Rotable Spare:
Costly parts like, engine, pump and motors etc. are not usually scrapped. When become defective then they are changed in the equipment and removed one is overhauled and kept as reserve for replacement in future. This rotation process gives the name as Rotable spares.
(iii) Insurance Spares:
These are generally vital parts, which are normally not required to be changed as it has life equal or more than that of the equipment/machine itself. But to cater for emergency failures, one standby is required to be kept.
(iv) Overhauling Spares:
These spares are required to carry out regular overhauls of the equipment, in order to give a new lease of life to it.
Codification of Spares:
Identification of spares is a major problem due to very wide range and very large number of spare parts is required to be maintained as inventory. Due to faulty numbering and misleading nomenclature and use of supplier’s part number and trade names, the part available in store is not located and the item is again purchased causing duplicacy increasing inventory and resulting the parts becoming obsolete.
Rationalised codification helps to avoid these problems and enables easy identification. Some items like, bearings, belt, fasteners etc. although purchased with different part numbers and nomenclature are actually same and are interchangeable. Therefore if the common code for all bearings or all fasteners or all belts is used, it may serve the purpose from a functional point of view.
The codes used for the spare parts may be numerical, alphabets or both. The digits may vary from 7 to 12. These digits are split into groups. Each group of digits indicates the classification e.g., hardware, tools, electrical spares, machinery spares, bearings, belts etc.
Standardisation of Spares:
Standardisation is helpful to optimise on the number of spare parts and thereby reduces the stock level. For the same value of business, standardisation reduces the number of items to be procured and which leads to reduction of cost.
The standardisation is also advantageous due to the interchangeability of parts. New equipment’s should be purchased keeping this factor in mind which reduces the investment on the spare parts. For example, if ten equipment’s of ten different manufacturers are purchased, then it might be necessary to keep ten sets of spares for repairs.
While, if all the ten equipment’s of same type are purchased from one manufacturer, then 2 or 3 sets of the spare parts will be sufficient, which means reduction in inventory.
Reliability of Spares:
Reliability is the probability of an equipment performing its purpose adequately for the period of time intended under the operating conditions. The determination of reliability value is a highly mathematical process. This helps is analysing spare part’s failure.
Failure of a spare part may be due to the following reasons:
(i) Due to wear and corrosion, which causes the parts to degrade slowly.
(ii) Due to sudden failure wherein some parts fail at random in an unpredictable way.
(iii) Due to accident failure, which are caused due to human failure.
In order to examine and compare various failures following details are required to be collected:
Frequency of failures, usage rate, environmental condition, warranty claims, operator’s efficiency, fault diagnosis etc.
Inspection of Spares:
Inspection of spares means to check the part with the stipulated reliability and specifications on dimensions and metal characteristics, at the time of accepting the spare in the store. Although the manufacturer also carry out inspection before dispatching them to the user.
Inspection at both these ends, i.e. by the supplier and by the user prevents sub-standard items to be used on the equipment and thereby affecting the reliability.
Manufacturers do carry out stage wise inspection during the course of manufacture of spare parts and then supply them under warranty guarantee clauses or accompanied by test certificates.
Depending upon the type of items and their use, following non-destructive tests can be carried out:
(a) Hardness testers—for testing hardness of materials e.g. in case of shafts, blades, knives etc.
(b) Electric spark testers—for checking the quality of linings.
(c) Radiography—for detection of flow in castings, welding’s etc.
(d) Bearing testers—for various types of bearings.
Spare Parts Planning:
The object of spare parts planning is to obtain optimum results i.e. maximum availability with minimum total cost. Spare parts requirement and its purchase must be planned in a systematic way based on the factors described here, so that inventory is not blocked more than that desired to meet the required service level.
Factors Governing Spare Parts Planning:
(i) Usage rate and equipment life:
Usage rate is defined as the requirement of spares to meet failures in a given period of time. It has been observed that, the variation is very low in case of spares with high usage rate (fast moving spares), and the variation is large in case of spares with low usage (slow moving spares). Thus the planning of slow moving parts is more problematic.
The usage rate of a spare also depends upon the age of equipment. It is therefore necessary to consider the present stage at which the equipment is to operate.
During initial stage the equipment has more failure rate (this stage is known as Burn in stage), while during main operating life the equipment has minimum failure rate (this stage is known as normal stage) and this is the useful life of the equipment having maximum efficiency and reliability.
During last stage of the life, known as wear-out stage, equipment again has high failure rate. Therefore during this stage equipment requires replacement of worn out spares.
The idea of stores is to keep the material in the stores so as to utilise an item immediately, whenever it is required.
But this does not mean that unlimited number of all the items are stored thereby blocking the money. Therefore a decision should be out of two situations i.e. the cost of not having a spare when required (stock-out cost), and the cost of having a spare when not required (Inventory Carrying Cost).
(iii) Service Level:
Service level is the percentage of demand that can be immediately met from the readily available stock. This means that the security against stock-out will be high for desired higher service level and vice-versa.
The service level depends upon one’s estimate of future, and on the risks one is willing to take for stock-out. Main cause of the increase in inventory of spares is to play safe to avoid any stock-out.
(iv) Standardisation of Equipment and Components:
Standardisation of equipment reduces to a great extent the number of spare parts in stock. Standardisation of machine components such as bearings, motors, pumps, self-starters, pumps etc., also reduces their requirement for stock.
(v) Preventive Maintenance Procedure:
The purpose of preventive maintenance is to discover failure, wear, erosion etc. before the situation is critical and before a sudden breakdown takes place. This will give a time interval between the moment the failure is discovered and the day the parts are really required.
Absence of proper codification is one of the reasons for unnecessary spare part held in the stores. If one spare part is used in two or more equipment, then due to defective codification the same can be stored with different codes at different places, resulting in excessive stock holding.
(vii) Location of the Project:
A project far from spare parts market and communication etc. is in a less favourable position. In such circumstances spare parts storage will be more to cater for the requirement during lead time.
(viii) Lead time for Procurement:
Lead time for procurement and number of spare parts required in this period plays an important role in spare parts planning.
(ix) Category of Spare Parts:
For the purpose of planning, spore parts will fall into the following categories:
(a) Regularly used spare parts:
These parts have very limited life as compared to the life of equipment, and are replaced several times, during the period the equipment is in operation. Examples of such parts are filters, bearings, gears, V-belts etc. Stock of these parts will be consumed sooner or later. However from economical point of view, their requirement should be evaluated carefully.
(b) Irregularly used spare parts:
These parts are supposed to have a life time in most cases as the same, or longer than the life time of machine itself. When the machine is scraped, the parts in the machine may still be in a satisfactory condition.
(c) Non-moving spare parts:
There are a number of parts which do not show any movement for a number of years. These may be either insurance spares or obsolete spares. Wrong policies or improper analysis at the time of procurement of spares or procurement of initial spares (spares purchased with the machine) may also contribute to heavy lock up of capital. In case the spare parts do not show any movement for 3 years, then it should be critically examined about its future requirement.
(d) Overhaul Spares:
In most equipments overhauling is required after operation of certain part of its life which is generally about 5000 hours. Although it may vary depending upon the preventive maintenance, operation and working conditions. It is necessary to visualise the spares requirement well in advance.
In this process there is possibility that some excess spares might have been procured which may not be used after opening the equipment. There may be 10 to 15% excess procurement, but this is justified when compared to time over-runs and stock-out costs.
(e) Insurance Spares:
These are those vital parts of a machine the life of which is nearly equal to that of the machine itself and are held as a standby against any break down.
(f) Maintenance Spares:
These are the spares which are regularly consumed e.g. fan belts, electric bulbs, filter elements, oil seals, bearings etc.
Procurement of Spares:
Following are the main parameters of purchasing:
(i) Right Time:
The procurement action should be taken at such time so that part is reached before it is actually required. The time can be decided after considering the total lead time.
(ii) Right Source:
While deciding a source for obtaining the spare parts, important factors to be considered are, timely supply, reliability, service facilities, price etc.
The source may be out of the following main sources:
(a) Authorised dealers’ of manufacturer of original equipment.
(b) Local dealer holding genuine spare parts.
(c) Asking small scale industry to manufacture the spare parts.
(iii) Right Price:
Price should be lowest acceptable for a fixed quality.
(iv) Right Quantity and Material:
Quality specifications should be adhered about the tolerance, etc.
(v) Right Quantity:
This should be decided by using the concepts of Economic Order Quantity. Economic batch size. It may vary for each category of spares such as maintenance, insurance, overhaul or rotable spares.
(vi) Right Contracts:
Purchase order should be clear, specific and legally sound, so that it may not lead to any problems in future.
(vii) Right Place of Delivery:
Delivery of spare parts should be taken at such place which do not require further transportation.
(viii) Right Procedure:
Formal system is required to be developed and then to be followed for purchase, ordering and post purchase system.
After Sales Service:
After sale service has great importance in the field of spare parts management. This is the most important link in the relationship between the manufacturer and the user.
Though it is essential for the manufacturer to maintain, rather to improve his image and reputation in the long run, to give full attention for the ‘After Sales Service’. Through prompt, quality and reliable service he can win the confidence of the user and gets an edge over other competitors.
The manufacturer or seller must provide the customer with full details about its equipment, its various uses, various other information about the operations, limitations, service or methods and to provide spare parts catalogue. Manufacturer must also provide servicing support through dealers servicing stations to satisfy the needs of users.
Control of Obsolete Spares:
Obsolete spares are those spare parts which are not damaged but are no longer useful. They are accumulated due to faulty planning. Since obsolescence is unavoidable, spare parts manager should try to reduce it, if cannot eliminate completely.
The obsolete spares greatly affect the inventory carrying charges. Studies have indicated that about one-third of the spares stock is non-moving in nature in most organisations.
Following are the main reasons for obsolescence:
(i) Change of technology and thereby a change in design.
(ii) Change in fashion and style may also render already purchased spares as obsolete.
(iii) Adoption of standardisation.
(iv) Not paying full attention to initial provisioning of spares. This is also possible due to inadequate experience in the operation of the plant, resulting purchase of slow-moving spares from the equipment manufacturer.
(v) Sometimes unwanted spare parts are purchased from the fear of funds lapsing.
(vi) Improper material handling or incorrect codification results the spare parts to remain surplus and will become obsolete after a few years.
(viii) Where usage is very low, at least one spare part has to be kept in store after sometimes it become obsolete.
Thus spare parts with restricted imports, longer lead time and high costs pose a big problem before management to maintain the plant or equipment in a state of high availability. Reclaiming in these circumstances is the only solution. To keep the plant or equipment in a good shape, the most efficient and cheap method is to reclaim and reuse the components after necessary repairs.
Following are the common methods followed for reconditioning or reclamation:
(i) Various welding techniques.
(ii) Metal locking.
(iii) Metal spraying
(iv) Machining oversize and then putting a liner.
(v) Repair by Eutectic welding alloy deposits on the worn out parts.
(vi) Thermit welding.
Following are the main reasons responsible for overstocking:
(i) Generally initial stock of spares is purchased on the recommendation of original equipment supplier. Sometimes these suppliers try to push their idle and slow moving stock which is normally not required.
(ii) The accountability of top engineers of the organisation is high which creates the tendency to play safe, resume, to play safe, resulting overstocking.
(iii) Defective codification causes the same spare parts to be stocked in different bins with different part numbers.
(iv) Incorrect assessment of probability of failure of various spares.
(v) Long lead times and the variations in lead time.
(vi) Due to long procedure for obtaining import license and availability of Foreign exchange, the tendency is to procure as much as possible whenever license or exchange is available.
(vii) Non-standard and many makes and models of equipment’s are responsible for more stock.