Many facilities are challenged with striking the proper balance between the number of spare parts to be held in inventory and the number of spares not to be held.

On one hand, downtime can be significantly reduced if all spares needed for a repair are immediately available. While having a high number of spares ensures downtime is reduced, this practice will be costly.

On the other hand, if spares are not readily available, the wait time can cause production loss and may even jeopardize your facility’s regulatory compliance. Your plant’s reliability depends upon effectively managing spare parts inventory to reduce maintenance costs and mitigate the risk associated with asset failure.

Why Optimize Spare Parts?

Facilities annually invest a great deal of money in purchasing and stocking spare parts. This inventory is built to create confidence that a spare will be available when needed. However, the cost of carrying material, especially when some spares have shelf lives and require their own maintenance, is a large expense—particularly when your spare parts stocking strategy often means relying on manufacturer or vendor recommendations.

Vendors are not stakeholders in the running of your facility and will oftentimes provide a list of spare part recommendations based solely on the equipment package they sold you, without taking into consideration whether or not that piece of equipment is critical or non-critical.

A spare parts analysis will make sure that you’re sparing the right parts by focusing on:

  • Which spares are required for critical equipment.
  • Which spares are high-demand parts (fast movers that you don’t want to order every week).
  • Which spares are required for completely non-critical equipment (i.e. don’t need to be stocked because you can wait for delivery).

When you choose to optimize spare parts, you are ensuring that your investment in spares is well spent.

How to Optimize Spare Parts

To efficiently optimize your spare parts inventory, a considerable amount of development work is required.

  1. Begin by identifying all parts that can be used by each piece of equipment. This includes both parts that are stocked and parts that are not.
  2. Next, conduct an audit of the existing inventory system to determine which parts are already included and which parts must be incorporated into the inventory system.
  3. After the audit, you need to develop a link between the equipment hierarchy and the spare parts inventory to ensure that each part in the inventory system is associated with the various pieces of equipment that can use that part.
  4. Lastly, develop a risk-based demand model on equipment to determine which spare parts (and how many) should be stocked based on safety, environmental, and economic factors.

Return on Investment Achieved by Optimizing Spare Parts

Optimizing your spare parts inventory means that you are putting your inventory investment where you should, when you should, without incurring future risks. It eliminates unnecessary waste in your inventory system and significantly reduces holding costs (carrying inventory and warehousing), loss of function costs that can occur during storage, and costs due to potential obsolescence as asset technology improves and renders a part obsolete.

An optimized spare parts inventory builds a level of credibility that is tangible and sustainable over time, honing your facility’s competitive edge and producing positive bottom line results. Utilizing optimization technologies and best practices to improve management of spare parts consistently produces measurable benefits and drives greater operational efficiencies.

Ultimately, mitigating risk, meeting production requirements, maintaining high safety standards, and managing costs should not be competing goals, and optimizing spare parts inventory will help you to find the balance between them.