Spare Parts Optimization

The goal of Spare Parts Optimization is to maximize Operational Availability whilst minimizing Life Cycle Costs.

With this in mind, one of our customers recently asked:

The budgets of our customers are being continually slashed, yet they still want and need the same level of spare parts support. Is there a way of using Spares Calculator to help them spend their money more wisely so that they get the best spare parts ranging and scaling package within their budget?

This is a good question and the answer is obviously yes, but you need to be careful that you don’t end up being pressurized into promising unrealistic service levels. Here are some ideas that might help you achieve the same levels of risk at a reduced cost.

Spare Parts Logistic Parameters

Here is a list of the key spare parts logistic parameters:

  • Units in Service
  • Daily Operating Hours
  • MTBF (Mean Time Between Failure)
  • NFF Ratio (No Fault Found Ratio)
  • Repair Turn Around Time
  • Unit Cost

Now let us consider how we can tune each of the key logistic parameter to maximise our Operational Availability and minimize our Life Cycle Costs.

Units in Service

The Units in Service are controlled by the customer and as a supplier you have no control over this parameter.

Daily Operating Hours

The Daily Operating Hours is another parameter that is controlled by the customer and as a supplier you have no control over this parameter.

MTBF (Mean Time Between Failure)

Consider the MTBF parameter. Unless you redesign the equipment this figure is fixed.

NFF Ratio (No Fault Found Ratio)

In theory it is possible to improve upon this the NFF Ratio by introducing local filtering equipment and by providing additional maintenance training. You could use Spares Calculator to compare the additional training and test equipment costs to the spare parts cost savings.

Repair Turn-Around-Time

The Repair Turn-Around-Time can have a massive impact on the required quantity of spare parts and it might be possible to offer some kind of expedited repair policy in extreme circumstances. This is sometimes called a crisis resupply policy. In this situation you would need to produce two risk calculations. The first in the normal mode of operation and the second in the crisis state.

Unit Cost

The Unit Cost is a no brainer and it would be an insult to the reader’s intelligence to state that reducing the unit cost would reduce the overall Life Cycle Cost.

Summary

In summary, there are few parameters that you can control when optimizing your spare parts inventory. The operational parameters are fixed by the client. The supplier can influence the NFF ratio, the Repair Turn-Around-Time and the Unit Price. It’s just a matter of trading-off the cost of various logistic scenarios.