Cost Reduction Management Through Spare Parts Optimization

To manage the spare-parts stock in asset intensive industries, or any other where their unavailability has a significant production loss risk, some practices and methods are frequently proposed so the great quantity of unused items in stock can be reduced, in order to meet the financial perspectives that pretend to decrease the value of spare-parts in stock.

Traditionally, given the abundancy of studies about raw material and finished product inventory, these practices have been replicated to spare-parts inventory, which belong to another context and don’t end up with the expected result. That’s why, to get better results, the tasks selected have been aimed at determining optimal stock quantities based only on consumption.

The spare-parts inventory management based on the Risk and Reliability aligned Spare Parts -RARC- methodology goes beyond determining restock parameters and mathematical models. Because of this, it’s important that administrators of inventory, maintenance, reliability, and supply processes know, identify and apply systemically modern management practices suggested or required by the models proposed in the different ISO standards. These practices are:

• Risk management (assessment and treatment) of not having spare-parts,
• Supply management with its strategies, times and costs,
• Identification and definition of the inventory process as business process, and
• The business factors that enable a good management, such as change management and document management