the appropriate course of management. Having done that, it ought to be possible to at least state the basis of the future usage of a part—whether that is condition monitoring, time-based replacement, random failure, or some other approach.
By identifying the basis of the forecast, it can then be reviewed for reasonableness or even currency. Yet this connection is rarely made in practice, and the “guess” becomes the basis of the stock holding. The result is that the inventory ends up being overstocked.
The same can be said of the engagement of operations, the involvement of procurement, and the input from finance, where an unchallenged assumption (a guess) results in overstocking.
Why is this so? Well, one answer is that it is easy (or is that lazy?) to not work through all the available information and to use a guess that is disguised as know-how as the proxy for information. A better answer might be that as long as the spare parts warehouse is overstocked, everyone can get away with this approach because it is easier to spend the company’s money on excessive parts holdings than it is to work on developing a more accurate or reasonable stock-holding requirement. It is usually when you tighten up on the wasted expenditure on spare parts, that the failures of the rest of the management system really come to light. By removing the excessive stock, the other systems lose their buffer for relying on guesswork.
There is another old saying along the lines that identifying a problem is half the solution. In this case it might be that identifying (and admitting) that the basis of the estimate for the future use of a part might be really just a guess then helps lead to a better solution. So if the basis of a stocking decision is unknown, or is really just a guess, then be clear and honest about that. Then you can get on with filling in the real data gaps and solving the real problem.
1.6 The Big Picture—Putting Spare Parts Management in Context
Now that the characteristics that define MRO and spare parts inventory are understood, let’s put management of that inventory into the context of the big picture. To do this, consider the reason that spare parts are held—to support the maintenance requirements of your plant and equipment. Once this is understood, it makes sense that understanding the maintenance and operations support activities will help with spare parts planning, and this flows on to stocking levels. (This is discussed further in Section 3.3, “Reliability-Centered Spares.”) Therefore, it makes sense that in order to better understand spare parts management, you need to also understand the basics of maintenance management. The following is not intended to be an exhaustive explanation of maintenance activities but should be sufficient to put spare parts management into context with maintenance.
A Simple Model of Maintenance Activities
Figure 1.2 is a simple model of maintenance activities. At the center of the model is “operational results.” This is the goal for everyone in the company and is about driving your plant and equipment to achieve your production plans. It is not just about minimizing downtime. Surrounding the goal of operational results are four activities that are at the heart of maintenance—they support the achievement of the company’s operational results.
Figure 1.2 A simple model of maintenance activities
Technical
In Figure 1.2, “technical” refers to the technical and reliability engineering aspects of maintenance. Think of this as identifying the work that needs to be done and determining how the goals will be achieved—that is, which strategies and techniques will be applied. Key aspects of this include:
• Identifying which assets are to be maintained. This might also be broken down into the subassemblies and parts level.
• Identifying the potential failure modes of those assets, subassemblies, and parts. Understanding this helps to determine the maintenance management policy that will best address that failure mode and keep the plant running.
• Determining criticality, which helps determine the priority of tasks that are subsequently planned.
• Identifying the appropriate maintenance management policy, which means determining what approach to take for maintenance given the detail set out in the above points. Some options include:
In terms of spare parts inventory management, understanding the maintenance management policy and the chosen technical aspects of the approach to maintenance will help inform spare parts management through understanding how the demand signal for spare parts is generated.
For example, with equipment that is subject to fixed-interval maintenance, the timing of parts requirements should be known well in advance of the need for those parts. Even with condition-based maintenance, the time between potential failure and functional failure may be able to be estimated, at least at a ballpark level, and therefore the time horizon for needing the spare parts is also able to be estimated.
Planning and Scheduling
This activity is about organizing the work. That is, who will do the work, when will it be done, how will it be done, and what tools and spares will be needed. This is the function that generates the job lists (sometimes called work orders) that instruct the maintenance team on what needs to be done and when. These job lists should also include details of the parts required (sometimes referred to as a bill of materials, or BOM).
Planning and scheduling is often the place that spare parts management breaks down, because there is an assumption that parts will be available rather than an actual check of parts availability. In a well-managed system, it is planning and
