Responsibly disposing of the part
• Recording the disposal as required
In an organization of any reasonable size and complexity, this list of activities will involve a wide range of personnel over a long period of time. Many of these people will never know each other. Even those who work at the same company at the same time may never meet. They will never discuss their actions relating to a spare part and their role in its journey. And so this seemingly simple task of procuring and managing a spare part is not only more complex than many people realize; it also involves the coordination of the decision making and actions of people who will never meet.
That is why I have written this book. While there are many good books on inventory management in general and some on spare parts in particular, to the best of my knowledge there are none that deal with the entire life cycle. Even my own book, Smart Inventory Solutions,2 deals primarily with spare parts inventory optimization as the core content.
The aim of this book is, therefore, to address the key issues confronting people during the life cycle of spare parts inventory management, from establishing a systemsystem for management, to physical ml management, to final disposal. For the sake of both readability and (relative) brevity, this book does not address every conceivable issue, policy, or process. For example, while bills of material (BOMs) are mentioned, there is no discussion on their creation (and in any case BOMs are primarily a maintenance tool). Nor does this book address issues such as software creation and selection, accounting, maintenance, logistics support analysis, or spare parts interchangeability records, except as required when they directly impact spare parts decision making. No doubt that this will disappoint some readers.
As with “I: Pencil,” there is no mastermind that oversees the entire spare parts management process, and so perhaps this is not only why the process fails so often but also why those failures are not so readily recognized by those involved in the system. For example, here are just a few of the common ways in which the system fails:
• Not recognizing the need to stock an item until it is too late
• Not planning for the use of a part
• Purchasing more than really required
• Purchasing sooner or later than required
• Storing in a manner that reduces the item’s functional life
• Not disposing of the item when it’s no longer required
• Not controlling and recording movements so that records are correct
• Using software that drives inappropriate decisions
Each of these failures will be noticed at some point by somebody that is part of the process but not often before the failure becomes an additional expense for the company. And it is even rarer, because of the “silo” approach of spare parts management, that any one person will see the pattern of these failures and understand the cumulative effect on a company.
This book is my attempt to address these issues by providing you, the reader, with some know-how and insight into the key processes that form the spare parts inventory management life cycle.
Where do I start? This was the thought going through my mind as I looked at the pile of junk that represented the spare parts supply for the factory for which I was now responsible. As the newly appointed plant engineer for a plastics packaging producer in Melbourne, Australia, I had quite a number of issues to address, and I knew that “fixing” maintenance at this site meant that the spare parts management needed urgent attention.
This wasn’t my first visit to this site, and I knew exactly what I had walked into because my appointment was actually a transfer from a sister site in Sydney. As the maintenance engineer in Sydney, I was a customer of the storeroom function. As the plant engineer in Melbourne, I was now the custodian. In addition to maintenance and engineering, I was now responsible for spare parts management, and that included the pile of junk in the corner.
In Sydney I had successfully transformed the maintenance function from an old-style “craft-based” approach to a more modern “scientific” approach that these days would be referred to as reliability-centered maintenance (RCM). (Note that this was the mid-to-late 1980s and the term RCM, while known in some industries, was not as widely used in those days.) The result of this transformation was a significant improvement in uptime, which in a business that operates 24/7 is like putting money in the bank. Subsequently I was asked to move to Melbourne and transform that plant also. Looking at that pile of junk in the corner, I was wondering just what I had got myself into.
As it turned out, it was this situation that provided for me the fundamental understanding of operations management, maintenance, and spare parts that became the foundation for much of my career—and that enabled me, nearly 30 years later, to write this book.
Fixing maintenance at the Melbourne plant required me to gain an understanding, and oversee the management, of all aspects of spare parts inventory management, including:
1. The establishment of a spare parts management system
2. The create and stocking phase
3. The operational phase
4. The management of obsolescence and disposal
These are the four key aspects of spare parts management that span the spare parts life cycle. They are also fundamental to the idea of “Sparesology.”
Sparesology® is a term I coined as a shortcut for the discipline of optimizing the physical, financial, process, and human resource management of spare parts. Sparesology is more than just inventory optimization. Sparesology requires an understanding of the complete ecosystem within which spare parts are managed, and it seeks to ensure that all factors influencing spare parts management outcomes work in concert to achieve an organization’s goals. It is this background, philosophy, and perspective that has informed the structure of this book.
The Structure of This Book
This book is set out in four parts, in an order that reflects the process required during the spare parts management life cycle. These are:
Part 1: “The Spare Parts Management System”
Part 2: “Create and Stock”
Part 3: “Operations”
Part 4: “Obsolescence and Disposal”
This structure is shown diagrammatically in Figure I.1.
Figure I.1
Part 1: The Spare Parts Management System
The spare parts management system guides the activity and decision making throughout the life cycle of the spare parts held in inventory. It is vital that the
