4-Spare Parts Management 1

7/28/2019 4-Spare Parts Management 1

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MRO Spare Parts and StoreroomManagement

6th Discipline of World Class Maintenance Management


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Objective Of this Course :

Provide a basic understanding on

the 12 Disciplines of MaintenanceManagement

Understand the real focus of atrue & meaningful MaintenanceManagement Structure

Understand the benefits that canbe derived on having a spare partsmanagement strategy in your plant

Make sound decisions on whetheror not to stock or not to stock anitem in the storeroom

Understand the concept and

importance of having a Spare PartsManagement in place in your plant

MRO Spare Parts Management


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Spare Parts Management Modules Include :

Module 2 : Storeroom Layout andImprovement

Module 1 : Common Problems on Spare

Parts Management

Minimum requirements for a Storeroom Choices for Parts Storage Plants with Existing Storeroom

Common Problems on Spare Parts Survey on Top Problems on Spare Parts Role of Spare Parts Management Who Should Manage the Storeroom

Module 4 : Lead Time to Order

Determine if fast, slow, non-moving or obsolete

Module 3 : Inventory Control Procedures

Types of Inventories MRO Inventory Analysis and Classification Fast, Slow and Non-Moving parts Classification of Parts Held in Stock

MRO Parts Catalog and Parts Codification

Module 6 : Economic Order Quantity(EOQ)

Minimum and Maximum Purchasing Cost and Carrying Cost Economic Order Quantity Explained

Spare Parts Workshop

Reducing The Lead Time to Order

Factors To Consider whether To Stock or not To Stock or Not Decision Tree Diagram

Module 5 : To Stock or Not To Stock

Reflections On MRO Spare Partsand Storeroom Management


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COMMON PROBLEMS ONSPARE PARTS MANAGEMENT

MODULE 1


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WE ALWAYS KEEP A STOCK OF SOMETHING JUST IN CASE

BULBS/ FLORECENT

Just in case one ofthe bulbs in our

house gets busted

FUSE

Just in caseone of the fuse

gets busted

SPARE TIRE

Just in case yourcar encounter

a flat tire

GROCERIES

Food, Soap,Toothpaste, etc.,

CLOTHES

Since we use

them regularly

BATTERIES

Just in case wemight need it

someday

UNDERWEAR

For human hygiene

hence, we replace

daily

SHOES

We wear different

shoes depending

on our activities

FLASHLIGHT

Just in case the

lights went out


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But in plants and industries it is a bit more

complicated parts to keep in stock mayrange from 10,000 for a small industryto more than 150,000 for a large plant

COMMON PROBLEMS ON SPARE PARTS

Almost all industries have a storeroomto keep parts of their equipment theyneed from time to time but not all these

industries have the knowledge or knowhow to manage their storeroom andspare parts. In fact the Storeroom andSpare Parts is one of the functions onwhere maintenance can save on cost

And almost every industry have a horrible storyto tell on their storeroom that they have experience

And most of the problems we encounter on ourspare parts and storeroom are man-made. There-fore, if man himself created the problem, then lethim find ways to solve their storeroom problems

But first, let us hear the problems


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In a reactive industry spare parts are

defined as those parts available in plentywhen not needed and not available whenthey needed it most

Many organizations admit that sparepart and storeroom function is one ofthe most neglected functions in anindustry


Survey indicates that 60 to 80% ofmaintenance expenditure is accountedby spare parts consumption in industries

If a machine fails and the part is notavailable in the storeroom as expected

maintenance have 2 options. Option 1they cannibalize idle equipment and

get the part they needed orOption 2they result to emergency buying andbuy in excess and keep the part nearthem on the assumption just in case

it might fail again


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Storekeeper checkthe part. Item existsin the system but

not physically there

Storekeeper emailmanagement for then time for additional

manpower

As usual storekeeperrequest again fell on

deaf ears onmanagement

Maintenance cashadvance and buyparts outside and

keep spare w/ him

Operations call thestorekeeper againblame everything

on him

Time for storekeeperto go home but still

he extend himself forcouple of hours

Night time occursstorekeeper decide tocall it the night and

goes home

One maintenancemanage to have a

spare key andeveryone has access

to storeroom

Parts are retrieveduring nigh time butno transaction andrecords have been

done

Morning come

Storekeeper said,Big rats again in theevening and so life

goes on . . .

Equipment fails

and maintenancecheck part in the

storeroom

START HERE

Are We Not All Part of the Problem ?


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Narrator : You notice an unusual noise

in the engine and based on experience,the noise comes from a bearing that isalmost gone. You raise a notification forthe bearing to be change in order not toallow the entire unit to go down becauseif it goes down, then management mightthink that you are sabotaging the company.You provided an instruction for the bearingto be greased pending the arrival of thenew one. As long as the greased bearingis still working, no attention will be given toyour notification of a new order of bearing,and PM of the equipment. Finally as expected

machine fails and the entire plant is down andin darkness. This is a story of a diesel generatorthat had been shouting for a complete overhaul

HORRIBLE TRUE STORY CASES ON SPARE PARTS

Hmm seems likebearing needs tobe replaced

The gas generator came down on brokenfan blade. The stand by diesel generatorwas started but it could not carry the loadbecause the rings were gone and it was smoking heavily.


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Operations Manager : Why did this machine

fail and how much time will it take you to repairthis one ?

Humble Maintenance : I have raised severalemails and memos for this machine to undergoa thorough PM and overhaul but . . . . .

Narrator : Operations interrupted the humble

maintenance and said . . . . .

Operations Manager : You talk too much, I amasking you a simple question how much time willIt take you to repair this machine ?

HORRIBLE TRUE STORY CASES ON SPARE PARTS

Humble Maintenance : Give me a couple of hours

Narrator : And so the operations manager went away and you started to repair thegenerator. The unit was started but went down again after 2 hours and this time itwas because of the fan belt. You check the system for the part number and thismight be your lucky day because there were 2 belts in the system so you rush tothe store to requisition for the fan belt but the storekeeper is taking too long to findthe belt and after 30 minutes, he went back to you and said.


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Humble Maintenance :Boss, I just went to thestore to request for the belt but it was not therephysically but in the system there were 2 pieces.

HORRIBLE TRUE STORY ON SPARE PARTS

Narrator : The boss called the storeroom andtold the storekeeper to check his inventory andsystem but the storekeeper calmly said to him

Storekeeper :Sorry no more belts

Humble Maintenance :But you have 2 morebelts in the system

Storekeeper :Do not believe everything yousee on the system

Narrator :You are now under pressure, genera-

tor is still down and the entire field was in dark-ness and finally you went to your maintenancesuperintendent

Storekeeper :Give me more men and I will do as you please

Superintendent :You make some cash advance and purchase the belt outside, donot come back if you do not have the belt


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Narrator :You went outside and found an auto parts shop

and luckily they have the belt you were looking for and soyou purchase it. You went back to the plant and replacethe belts with the one you purchase and you started toreplace the belts, after an hour you started the generatorand the lights were back ones again. After completing therepair, the superintendent called you in his office. In yourmind you are thinking that your boss will praise you forsaving the day. With all the sweat anddirt you entered his office and he said

HORRIBLE TRUE STORY ON SPARE PARTS

Superintendent :Why is the physical inventory andsystem inventory do not match ?

Humble Maintenance :This should not happen if my email and memo were

approved to have the main generator for a complete PM and OverhaulSuperintendent :The problem with you is that you talk too much, I am asking youa simple question. Anyway try to make sure that this does not happen again

Narrator :And so life goes on. This is a simple story on some of the day to daypressures on the life of a humble maintenance.

You talk too

much...


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The industries seems to develop theirStoreroom on a hit and miss fashion. If theequipment would fail and if the part is un-available in the storeroom they will usuallypurchase in excess quantities & were kept

by the maintenance themselves, becausethey have lost their trust in the storeroom.


One of the main cause of interrupted maintenancework in industry is the lack of needed spare parts.In some cases, spares were not identified in ad-

vance or they ran out of stock when it was needed.Worst is that the storekeeper simply cannot locatethe parts in the storeroom since everyone haveaccess to the storeroom during peek hours

1) Disorganized storeroom & time to get parts in the storeroom eat too

much time on the maintenance

If you want to improve the housekeeping of your Storeroom, just go toa supermarket and you will have some idea on how to start with . . .


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The saying that Honesty is the Best Policy does notApply to Spare Parts and Storeroom. The storekeepershould be in control on what comes in and goes out ofhis storeroom. In short, in Spare Parts, you need toapply the golden rule which is TRUST NO ONE


This is one of the reasons why the physicalinventory and system do not match.

2) Everyone access to the storeroom during peak

hours because their storeroom is from 9 to 5 pm

Management and Decision Makers

must understand that if their opera-tions is 24 hours or 3 shifts then thestoreroom should also be in 3 shifts.trust and honesty system do notapply in Spare Parts Management


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Since the part is needed ASAP, front line employeesand maintenance people will be in a rush to acquirethe item and will not be inclined to fill up the paperwork. This usually happens when the storeroomkeeper completed his day work and leave the store-room key to the guard on duty. Two problems will

be evident in this situation


First, expect your inventory to be lower than what isactually listed on the system

3) No Record Of The Transaction

Second, there is a strong temptation for maintenanceto store the part elsewhere in the plant, near theirequipment or even in their home for personal use

All items, parts that go out of the storeroom should always have arecord as this will be the basis on what parts needs to be storedand reordered. If there is no control on the parts that goes out ofthe storeroom, then expect parts to be unavailable when needed


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4) Physical Inventory and System Inventory Do Not Match

It is critically important that not only the storeroom people shouldunderstand the importance of inventory accuracy but also itsusers, if inventory do not match the system, then the users willloss their confidence and start stocking parts on their own

If the actual inventory is lower than the system record, then the risk is high that anout-of-stock condition can occur because parts will not be ordered on-time.

If the actual inventory is higher than the system record, then parts will be flaggedfor re-ordering by the system even if not needed.


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5) Same Part But Different Part Number

Part Number : 260893Mini ball Valve, two way,

tube size 1/4 comp,

brass, 2500 LB, Parker4AMB4LPFABP

$71.37

Part Number : 176011VALVE, BALL, 1/4 INTUBING CONN, 2500

PSIG, LEVER HANDLE$36.14

Part Number : 1220622-WAY BALL VALVE, BRASS,

1/4 INCH, 2500 PSIVALTORC 7452

$88.00

Part Number : 4653901/4 Ball Vlv;

Boiler O2 control;Alstom Dwg 5a9555252

260893, $49.50

Same part can have different part numbers because they camefrom different vendors or the part may have some very slightdifferences. Part number should remain consistent or alternativepart number can be provided but should reflect on the CMMS

A part can be reorderedbecause some department

may need them withoutknowing that there can besome alternative parts that

can be used in the storeroom


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6) Large Quantities of Obsolete Parts In the Storeroom

Oftentimes, there are many parts held instorage that do not belong to any equip-ment in the facility since it had alreadybeen decommission. The equipment inthe facility may be retired and no longerin site, yet, the parts of that equipment

are still in the storeroom. And worst,storeroom personnel may still be orde-ring the obsolete parts

When an equipment is retired, the spares associated with it must beidentified so that they can be freed from the storeroom, this will free upspace, storing obsolete items cost money and space in the storeroom.A plant can terminate plans to expand their storeroom by freeing upspace consumed by obsolete parts

Another reason why the part becomesobsolete is that the shelf life of the parthad already been reached


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7) Equipment Vendor Is No Longer Around

The machine you have been using hadbeen around for more than 15 years andthe vendor may no longer be producingthe parts you required or worst the vendoris no longer around and had shifted toother business

Decision on whether to continue running this equipment or retire it byconducting some economic and feasibility study would be appropriatefor this situation. If the decision is to allow the equipment to still run thenparts that frequently failed in this equipment should be identified andtrying to source other vendors that can fabricate the part

Due to technology and advancement mostof the parts on the equipment had alreadybeen modified by the vendor and no longerusing the old spare parts in your equipment


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8) Emergency Buying and Keeping Excess Parts In Maintenance

Secret Hiding Places When the machine fails and the part is not

in the storeroom and needs to be purchaseimmediately, there are many cases wherea dozen of these parts is ordered for fearthat the failure can happen again in the

future. The excess parts where kept atmaintenance secret hiding place and Joeis the only guy that knows this place andis an eight to five maintenance person.

To start a Storeroom Improvement Strategy is to surrender all the partsthat you store independently and putting your trust again at the storeroom

The same part fails in the evening when Joewas no longer around, and since the store-

room has no record of the part, it was againpurchase the following day and now Stevekept the rest in his own secret hiding place


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9) Low Quality of Parts, Purchasing Always Go For The Lowest Bidder

There is a tendency to reduce costs by buyingparts with the lowest possible cost. Reducingcosts and improving reliability are not the same,in fact there are cases when reducing costs willaffect the reliability of the machine

If we want to save on cost, we should focus noton the initial cost but on the Life Cycle Cost ofthe component. This is where a true and mea-ningful savings can be realize on maintenance

Every maintenance sho uld foc us on imp rov ing rel iab i l i ty and no t on

reduc ing c ostWHY? because i f reliabi l i ty starts to impro ve thencos t wi l l def in i te ly go dow n, i t cannot be the other way around .

Remember that there w i l l be t imes that reducin g cos t wi l l af fect

rel iabi l i ty . Having a low maintenance cost is always a consequence

of good maintenance pract ice . . . .


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10) Maintenance do not know the code of the part and takes too long to

retrieve the part in the storeroomNumbering the part or spare should make lifeeasier for the users to retrieve the part at thestoreroom but since the person who devisethe part numbering is no longer around theplant and details on how he determine thepart number is unknown idle time in acquiringthe part is lengthen together with the machinedowntime

Ass igning part number ing or cod i f icat ion for every spare or part in

the storeroom sho uld be lef t to the storeroom people and sh ould b e

done by a single indiv idual or by a group

Because of this everyone is developing theirown numbering system which creates dupli-

cation of parts in the long run


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11) Large Amount of Non-Moving Parts In the Storeroom

When the equipment was commissioned5 years ago. The vendor told us to stocksome critical parts of this asset. Theseparts have not yet moved for the last 5 yrs

Perform ing an ABC Analys is shows that 70 to 80% of the total cost

your inventor ies w i ll come no t f rom the fas t mov ing i tems bu t f rom

thos e non -moving i tems. These parts are big as wel l as thei r cost

Stocking critical parts as recommendedwill always be a debatable issue but thebest approach on making decisions onwhether to stock or not to stock this partwill be best answered if maintenance andreliability people have an algorithm or

Decision Diagram


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12) MRO Spare Parts is Not Manage By Maintenance

Maintenance people know the parts better than any department and

real saving s can be generated i f MRO parts and spares in the sto re-

room are manage by the Maintenance Department

We at Finance andAccounting take careof the financial and

funds of the companyso we are in the bestposition to manage

the storeroom

We at Purchasing arethe ones in direct con-tact with the vendorsso I think that we arein the best position tomanage the storeroom

We at Maintenance arethe users and know the

parts very well, weshould be given the

chance to manage theMRO Storeroom and

spare parts

The storeroom cancontain a lot of itemsfrom office supplies,janitorial services,not only spares, rawmaterials and MROparts.

The best people tomanage the storeroomfor MRO parts and allspares, items used inthe storeroom aremaintenance people


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OFTENTIMES THE PROBLEM IS MERELY COMMUNICATION

Storekeeper

Purchasing

To comply with Finance wealways go for the lowest bi-dder and in the end givingour maintenance people

problem on the part

Maintenance

All I care is how toreduce cost on every-

thing and blamesthe storeroom for

inaccurate inventory

Finance

We always blame and pressuremaintenance when the equip-

ment is down. That is ouronly excuse for not meetingour production for the day

Operations

We just comply tomanagement on whatmachines to retire and

we dont trust our store-room because we do

not control them so wekeep parts ourselves

Improving the Storeroomis not only the responsibility

of the Storeroom but by everyone in the organization itself

I am just a oneman team here


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Survey On Top Problems on Spare Parts

1) Disorganized storeroom and time to get the parts eattoo much time for the maintenance

2) Everyone access to the storeroom during peak hoursbecause the storekeeper is from 8:00 am to 5:00 pm

3) No record of the transaction was done. Maintenancejust get parts and leave especially during peak hours

4) Physical inventory and system inventory do not much

5) Same part with different part number

6) Large quantities of obsolete parts in the storeroom

7) Equipment vendor is no longer around. No idea wereto get this spare part

8) Emergency buying and keeping excess parts inmaintenance secret hiding places

9) Low quality of spare because purchasing always go

for the lowest bidder

10) Maintenance do not know the part number of the partand takes too long to retrieve

11) Large Amounts Of Non-Moving Parts in the Storeroom

12) MRO Spare Parts is Not Manage By Maintenance

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SPARE PARTS MANAGEMENT EXPLAINED

When a machine fails, it is mostly caused by a part that fails to fulfill

its function. Mechanical parts wear and needs to be replaced and whatis important is to keep the downtime to a minimum. A storeroom is aplace to store parts that we need to keep our equipment running.

But m anaging spare parts simply means how fast we

can response in acquir ing the r ight part dur ing the t ime

when maintenance and operat ions needed them mos t


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SPARE PARTS MANAGEMENT EXPLAINED

Spare Partis define as a part of a machine ready to replace an identical

part of it, if it becomes faulty. It is also defined as those parts of themachines which are kept on standby to be substituted when a part of amachinery breaks down or worn out

When a part is not around when an equipm ent is in a

fai led state, downtim e increase, operat ions are pissed

off whi le maintenance lose their trust on their storeroom


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WHY SPARE PARTS IS NEEDED

SPARE PARTS

Preventive MaintenanceScheduled Parts

Replacement

Emergency Breakdownand Repairs

Predictive MaintenancePotential Failure Detected

Quality and SafetyAudit and Compliance

A good Spare Parts Management system ensures the

right parts gets to the right place at the right time


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SPARE PARTS MANAGEMENT

Spare parts refer to the part requirements for keeping ones owned

equipment in healthy operating condition by meeting repair andreplacement needs imposed upon by breakdowns, Preventive andPredictive Maintenance as well as safety and quality audits

Spare Parts Management has 3 Goals

To have the item that is needed

To supply that item quickly when it isneeded

To control the overall cost of keepingthe items in stock

We simply cannot stock everything. The require-ments to balance keeping the parts in inventorywith the need to control spending is the reasonit is important to have a clear, rational and awell understood policy on Spare Parts


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WHY SPARE PARTS IS NEEDED

The main user of the Spare Parts or Storeroom is the maintenance.

Spare Parts Management is also often called Storeroom Manage-ment, or Maintenance Material Management

A Good Spare Parts Management Includes

Balance quality and price Purchasing parts in the correct quantity Receiving parts at the correct optimum time

Problem with most industries is that when a breakdown occursand the part in unavailable. The maintenance is pressured to fix theequipment and get the parts any way possible either by purchasingthem outside or cannibalizing other equipment

This hammer cost USD 500 because thishammer had passed rigid testing governmentstandards, but this hammer can be purchasedat $ 25.00 at a local hardware store

ROLE OF SPARE PARTS IS TO PROVIDE PARTS QUICKLY WHEN NEEDED


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SPARE PARTS MANAGEMENT SURVEY QUESTION

Is your current industry, whom do you think

manages your spare parts storeroom ?

Write the letter in a 1/8 piece of paper, and submit to the facilitator.The result of the survey will be sum up and given as a percentageof the class. Answer as honest as you can.

A) Purchasing Department because theyare the ones who purchase the parts

B) Accounting Department because they

control the finances of the companyC) Safety Department

D) Maintenance Department because they are theusers of the Spare Parts items

E) I do not know who is in charge of the Storeroom


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WHO SHOULD MANAGE THE SPARE PARTS DEPARTMENT

PURCHASING

These are the people directlyinvolved with the vendorsand make the calls. Theycan maintain the integrityof supplier and customer

relationship with nofavoritism among vendors

ACCOUNTING

They note that proper storesinventory control is important.They manage the finances of

the company and an auditmight reduce the tendency forcorruption to take place during

transaction on vendors

MAINTENANCE

These are the humble users ofthe store. They know the partsand what parts work best fortheir equipment. They know

which part keeps on failing aswell as the lifecycle of parts

they replace frequently


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Because most material transactions

involved maintenance parts, materialsmanagement and storeroom peopleshould report to the MaintenanceDepartment


If Storeroom people and materials manage-

ment report to other functions such asPurchasing or Finance, there is a greaterpossibility that the objectives will not bealigned with those of both operations andmaintenance

The functions of purchasing and inventorymanagement should be separated becausethe skills required to be a good purchaser(negotiator) is different from the skills thatis required to be a good inventory manager


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Maintenance people are the real customersof a MRO Storeroom, hence they should bethe ones to manage the spare parts


The largest and most common de-motivatorof maintenance are waiting for the materialsand worst if the parts are not in the storeroom

when they needed it most Since the part is not around when needed

maintenance try to make a Mc Guyver movewhich they know is not right for the job. Theydo this because there is pressure from theoperations people to keep the equipment

running at all cost

In short maintenance people try to cannibalizesome parts from idle equipment just to makethe equipment run and this had been part oftheir day to day lives


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VALUE OF SPARE PARTS MANAGEMENT

EQUIP-

MENT

STOPS

Find

technician

who can

repair it

Diagnose

the fault

Find the

spare parts

Repair the

fault

Revalidate

test run the

machine

Endorse

equipment

to operator

Repair time

MTTR

DOWNTIME

Downtime means the total amount of time

the asset would normally be out of service

from the time it fails until it is fully operational

Without an organized storeroom, it could take between 0 hrs (if no parts isrequired) to 4 hours to find the part and if the part is not around andpurchase outside might take even 24 hours to reach increasing the down-time of the equipment. If you have around 200 breakdowns a year and a

lost production cost of $250.00 per hour and 6 hrs of downtime on averagesince part is purchased outside

Downtime Savings = 6 hrs x 200 x $ 250.00 / hr

Downtime Savings = $ 420,000.00 per year


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Proper planning and control of spare parts inventory is a critical

component of an effective asset management program. If the rightparts are not on hand when needed for routine maintenance orrepairs, downtime is prolonged. If too many parts are on hand, thecompany absorbs excessive costs and the overhead of carryingthe inventory.

SPARE PARTS MANAGEMENT

Housekeeping and orderlinessin the storeroom is an importantpart of Spare Parts Managementresponsibility, as this is criticalto the ability to retrieve the co-

rrect item quickly to the end user


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Importance of Inventory Accuracy

One of the critical success factors for

a Spare Parts Management is achievinga high level of inventory accuracy

Accurate inventory is defined as the co-rrect part and quantity physically in thestoreroom and in the system

Lost of confidence in the storeroom canresult in maintenance stocking parts intheir cabinets, toolbox, shelves whichoften result in excessive cost of parts

If the actual inventory is lower than the

system recorded, then the risk is highthat physically an out of stock conditionoccurs, while if actual inventory is higherthan the system recorded then parts areoverstock even when its not needed


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Preventive Maintenance Kit Building

One of the functions of the storeroom is

to provide parts, tools and supplies forthe technicians to perform PM Tasks. Itwill be a good idea for the spare partspersonnel to have access over the PMschedule. PM kits are prepared in ad-vance before the PM schedule starts.

This saves time in acquiring the partsto be used for PM activities.

When a PM is scheduled for work, the technicianpresents the PM work order to the storeroom.

The system will show that the inventory has al-ready been picked and is in the kitting hold area.The technician can take the PM kit to the job andthe entire process of retrieving all the parts nee-ded for PM


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SPARE PARTS TRIVIA QUESTION

Which band sang andcomposed the songNO SPARE PARTS

A) Led Zeppelin

C) KISS

D) Rolling StonesB) The Beatles

E) Elvies Presley

F) Freddie Aguilar


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STOREROOM LAYOUT ANDIMPROVEMENT

MODULE 2


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Storeroom must be organized

If you plan to re-arrange your own

storeroom, visit some supermarketsand take note of the signs, arrange-ments and so on making it easy forthe consumer to locate the goodsthey need. There is a place for every-thing and everything is in place

Same concept can be applied foryour storeroom. What is importantfor the storekeeper is how fast canhe retrieve the part needed by the

maintenance Improving the storeroom is not

only the role of the storekeeper butis a collective effort by the wholeorganization


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Storeroom must be organized

Parts must be free from debri & clutter

to permit personnel access to parts

Locations must be labeled to reduce timeto search parts

Stepladders, stools & carts must be parkedin an area that is out of the main flow

Area needs to be separated through wallsor cage to discourage theft and to enforcerecording of parts receipts/issues for inven-tory accuracy purposes.

Lighting in the area should be sufficient

Strategic location of parts such as fastmoving parts should be located for easyaccess while slow moving and big itemscan be located at the back side of the store


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SPARE PARTS MANAGEMENT INCLUDES

A spare parts is not just a place to stock parts. It is a place for everything

and that everything should be in place. A good spare parts managementsystem must include the following

Receipt of incoming spare parts

Control of issuance to users

Control of parts inventory, min-max Control over defective parts

Control of parts under warranty

Quality Control of incoming parts

Data reporting, tracking

Proper storage & handling for fastand slow moving parts

Parts storage lifespan (due dates)

Control of obsolete parts


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HOW MUCH SPACE THE STOREROOM REQUIRED

Speaking about the space your storeroom

will require depends on many factors suchas the number of equipment you operate,number of breakdowns experience on eachequipment, bulk of the spare, quantity ofitems to be stocked based on the maximumand minimum quantities, available space in

your plant and so on . . .


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MINIMUM REQUIREMENT OF A STOREROOM

General Storage Area

This area is where most of the store items willbe kept . It will include open shelving, modulardrawer units, some will be hanging on the walls

Receiving Area

This is the place where maintenance orequipment users transact with storeroomkeepers on spare parts that they need toretrieve from the storeroom

Issue Counter

This is the area to receive all incomingspare parts and reconcile packing slipswith the purchase order. Forklift move-ment is often required here

Office AreaAn office is required for keeping storerecords and provides a central areafor storeroom computer and CMMS.should be air-conditioned. Containstelephone, computer, fax, photocopier


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MINIMUM REQUIREMENT OF A STOREROOM

Pallete Storage Area

This area contains large items such as motorspumps, gearboxes. These items are usuallyStored in pallet racks and forklift access orlifter is required in this area

Bulk Storage Area

This is the place to temporarily store partsthat are defective, damaged or incorrectparts that needs to be returned back tothe vendor or supplier

Temporary Storage Area

These will be large volume but lightweight items such as pipe insulationpaper products will be stored in thisplace or area

Self-Service Area

Other spare parts storeroom providesSelf-service area for inexpensive partsThat can be made available to mainte-nance such as blots, nails, small valves


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STOREROOM FLOOR PLAN

Roll-up door

8 ftHallway - Aisle

Receiving AreaDesk 1

File Cabinet and Catalog Shelves

Door

Desk 2Storeroom Personnel

Door

4 ft wide by 8 ft long

Pallet Rack Storage Area

Pigeonhole Unit Wall Storage Area

Accepting

Deliveries

Temporary Storage Area for new deliveries

34 ft

34 ft

Modular Drawer Units with Bins

Modular Drawer Units

with Bins

Modular Drawer Units with Bins

Floor Tape

Applicator


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STOREROOM IMPROVEMENT

Using Mezzanines

If your storeroom space is limited, andyou have way too many spares to stock,one way to increase storage area will beto use a second floor called mezzanine.Mezzanine structures can only be madepractical with a minimum of 20 feet of

ceiling height


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STOREROOM IMPROVEMENT

Using Mezzanines

Mezzanines should not be an excusefor stocking obsolete parts. Our goalwill be to stock only parts that areneeded to keep equipment downtimeto a minimum. Heavy parts should bestock on the ground level while parts

that can be hand carry can be stockat the mezzanine floor.


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CHOICE FOR PARTS STORAGE

Bin Boxes

This would be ideal for low usage andlightweight parts. Can be made fromcorrugated boxes to plastic and can bepurchase on different sizes. Bin boxescan be easily removed and relocated toother locations. Ideal for bolts, nuts,

washers, nails, fasteners, screws andother small parts in quantity


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Open Shelving Cabinets

The goal for optimum shelving andbin usage is to maintain at least 80%utilization of the space. These openshelves are ideal for large to mode-rately heavy items such as valves,hoses, sprockets and small motors

for a 24 inch depth open shelve unit

One disadvantage of open shelvesis that the depth is not maximizedand the part or spare is more proneto dirt and dust

Cost of open shelve cabinets willbe less than the modular shelvingdrawers and some are designedwhere the height can be adjusted


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Modular Shelving Cabinets and Drawers

More expensive than that of an openshelve cabinet. Standard is around300 to 600 pound load per shelf.

Modular shelving is effective incompressing the parts compared toan open shelving cabinet in whichmostly the depth of the shelf is most

of the time under utilized

Modular cabinets are mostly used forsmall bearings, seals, couplings,

bushings, fuses, circuit breakers,gauges, dies, cutting tools etc.,

Another advantage for modularshelving to open shelve is the partto be stored is less prone to dirt anddust since it is enclosed


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Pallet Racks

Usually 42 inches deep by 8 feet wide.Around 8 to 10 feet high are used forlarge heavy items on pallets. Caninclude motors, pumps, oil lubricantin drums

Area or space for pallet

racks storage should allowfor forklift movement andmaneuvering in order toretrieve these parts andspare


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Flammable Fluid Cabinets

Usually yellow in color usually used forstoring flammable fluids such as paint,gas, aerosol and others. These cabinetsmust be labeled with flammable as perOSHA requirements

Metal cabinet are usually constructedusing 18 gauge sheet iron, doublewalled with 1.5 inches of air space.Two vent plugs are employed on thesides of the cabinet to remove vaporthat can be accumulated overtime.Comply with your safety personnelfor proper storage procedures


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Cantilevered

Storage Racks

Drum Racks

Pigeonhole ShelfVertical / Horizontal

Carousel

Combination Oven andModular Drawers

Rotary Bins (Rotate)
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PARTS LOCATION IDENTIFICATION SYSTEM

Hallway - AisleReceiving AreaDesk 1

Door

Desk 2Storeroom Personnel

A B C D E

A B C D EA B C D E

A B C D EA B C D E

A B C D EA B C D E

A B C D E F G H I

A B CA B C

A

B

C

D

A

B

C

D

A

B

C

D

A

B

C

D

A

B

C

D

E

F

G

1

23

45

67

8

910

11 12 13 14 15

1

A

Row

Numeric

Section

Alphabetic

Shelf

Numeric

Shelf Position

Alphabetic

Drawer Position

Numeric1 A 1 A 1

1

2

3

4

5

6

7

8

9

10

11

12

13

1415

16

17

18

19

2021

22

23

24

A location number for a part is oftendone in alphanumeric fashion. Thiscoding will identify the exact location

of the part that needs to be retreived


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TO CENTRALIZE OR DECENTRALIZE THE STOREROOM

The question on whether to centralize or decentralize the storeroom can have bothadvantages and disadvantages to industries. This will also have something to dowith the size of the industry itself. If the industry is very large with a number ofdepartments or the plant is split up and by several kilometers, having a decentralizedspare parts system would have some merits and advantage since access to the store-room would be much easier and quicker.

Access to the storeroom wouldbe much easier and quicker and

makes the response time a lotfaster. On the other hand, thedisadvantage of having a de-centralized storeroom is thatmore people will be needed inthe storeroom.

SPARE PARTSCENTRAL HUB

DEPARTMENT

A

DEPARTMENT

B

DEPARTMENT

CDEPARTMENT

D

Centralized

Spare Parts Hub

What is important is that whetherthe storeroom is centralized ornot, the inventory in the systemand its physical quantity shouldalways be the same


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PLANTS WITH EXISTING STOREROOM

The goal of storeroom and spare parts is to provide the right part at the

right time when it is needed. This can only be done if the storeroom havecontrol on the parts they issue to their customers. In this case these arethe operators and maintenance people.

Therefore, the first step in the change process for any organization thatwould like to benefit on their storeroom is for the maintenance to surren-der all parts that they stock in their shelves, toolbox and secret hidingplace or their home


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If the plant is operating for 24 hours and 3 shifts,the storeroom and the people in the storeroomshould also be manned for 24 hours and 3 shifts

40% to 50% of all Maintenance departments

have an open storeroom, where the honorsystem is in effect.

It is impossible to have an accurate inventory bothphysically and on the system if everyone can access

the storeroom Many plant think that they are saving money by assigning

one person on the store and working on an 8 hour basis.What they dont realize is that savings from the storeroomcan only occur if all parts that goes in and out is beingcontrolled by the storekeeper

There is a temptation to keep parts in maintenance secrethiding places ones the storeroom is open during peakbecause they know that the inventory and system willnever match


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Parts must be free from debri & clutter

to permit personnel access to parts Locations must be labeled to reduce time

to search parts

Stepladders, stools & carts must be parkedin an area that is out of the main flow

Area needs to be separated through wallsor cage to discourage theft and to enforcerecording of parts receipts/issues for inven-tory accuracy purposes.

Lighting in the area should be sufficient Strategic location of parts such as fastmoving parts should be located for easyaccess while slow moving and big itemscan be located at the back side of the store



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CASE STUDY : ATP SPARE PARTS SYSTEM AND CONTROL

CURRENT DIFFICULTIES AND PROBLEMS ON SPARE PARTS

Induce more machine downtime due to longwaiting time to replace because it took a longtime to locate the part

Induce more machine downtime due to longwaiting time to replace because it took a longtime to locate the part

Abstract cabinet withdrawal monitoring sheetis generic and not classified as to the type ofspares

Poor spare parts management due to incomplete and not properly labeled bins andno specific location of parts defined some small parts change location from time totime making it difficult to locate the part

Other spares are kept on other areas unknown which caused unneeded orderings

These are just some of the problems detailed by the team so they finallydecided to improve their current spare parts. This initiative was part oftheir TPM Planned Maintenance activities


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A R E A : 5 T e a m n a m eL E A D E R : R o d i n g M a n a g u i tOBJECTIVE :

To improve the existing Spare Parts System and save on inventory costs of spares

NO. ACTIVITY DESCRIPTION Code FORMS USED WW 26 27 28 29 30 31 32 33 34 35 Remarks

1 Define current flow of existing Spare Parts ---- Provide Flow chart of activities Plan

System in your division Actual

2 Prepare inventory lis ts of all your spare parts in SP-02 Spare Parts Inventory Lists Plan

your cabinet with corresponding cost & Total Actual

3 Provide a graph showing the overall inventory ---- Provide graph in inventory costs Plan

costs with specific details on per classification Actual

4 Re-organize spare parts cabinet and provide ---- Before and After Pictures Plan

specific labels, part no. location & Other details Actual

5 Prepare an index card per item / per description ---- Sample only for reference Planto monitor withdrawal of spare parts Actual

6 Prepare necessary Visua l Contro l on New ---- Visual Control of Actual Plan

Spare Parts system for teaching purposes Worn-Out Parts Actual

7 Prepare new flow chart for the new system ---- One Point Lesson Plan

and disseminate through OPL to all involved Actual

8 Monitor trend on Spare Parts Inventory on a ---- Provide graph in inventory costs Plan

Monthly Basis Actual

SPARE PARTS CONTROL SYSTEMSa Planned Maintenance, Isang Misyon, Isang Direksyon pa rin . . . . .

As part of our TPM Activities, we piloted one station TQFP EOL to improve their spareparts system with the aid of a simple roadmap we developed


ITEM Equipment Used Brie f De scription COMPLETE PART's DESCRIPTION ATP Item Code Part Number Quantity CLASS BACK TO LIST OF SPARE PARTS Stock (Put Letter) CABINET SPECIFIC Fast Slow

1 Anam/TQAF001 DIE PREFORM DIE W/DFC, 7X7 1.0T 201279460 ETKH0001 D

2 Anam/TQAF001 DIE CAM FORM DIE W/DFC 7X7 1 0T 201279461 ETKH0002 D

Spares MovementLOCATION


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2 Anam/TQAF001 DIE CAM FORM DIE W/DFC, 7X7 1.0T 201279461 ETKH0002 D

3 Anam/TQAF001 DIE L/L CUT DIE A, 7X7 1.0T 201277809 ETKH0003 D

4 Anam/TQAF001 DIE L/L CUT DIE B, 7X7 1.0T 201277810 ETKH0004 D

5 Anam/TQAF001 DIE L/L CUT DIE C, 7X7 1.0T 201277811 ETKH0005 D

6 Anam/TQAF001 PUNCH L/L CUT PUNCH, 7X7 1.0T 201277812 ETKH0006 D

7 Anam/TQAF001 DIE L/L CUT DIE PAD, 7X7 1.0T 201277813 ETKH0007 D

8 Anam/TQAF001 PUNCH CAM PUNCH GUIDE, 7X7 1.0T 201277797 ETKH0008 D

9 Anam/TQAF001 PUNCH C/T PREFORM PUNCH "A" W/DFC, 7X7 1.0T 201279462 ETKH0009 D

10 Anam/TQAF001 PUNCH C/T PREFORM PUNCH "B" W/DFC, 7X7 1.0T 201279463 ETKH0010 D

11 Anam/TQAF001 PAD C/T& PREFORM PUNCH PAD, 7X7 1.0T 201277800 ETKH0011 D

12 Anam/TQAF001 DIE CORNER TRIM DIE"A", 7X7 1.0T 201277801 ETKH0012 D

13 Anam/TQAF001 DIE CORNER TRIM DIE"B", 7X7 1.0T 201277802 ETKH0013 D

14 Anam/TQAF001 PUNCH CAM FORM PUNCH W /DFC, 7X7 1.0T 201277803 ETKH0014 D

15 Anam/TQAF001 PAD CAM FORM PUNCH PAD, 7X7 1.0T 201277804 ETKH0015 D

16 Anam/TQAF001 DIE SINGULATION DIE, 7X7 1.0T 201277805 ETKH0016 D

17 Anam/TQAF001 DIE PREFORM DIE W/DFC, 7X7 1.4T 201279465 ETKI0001 D

18 Anam/TQAF001 DIE CAM FORM DIE W/DFC, 7X7 1.4T 201279466 ETKI0002 D

19 Anam/TQAF001 DIE L/L CUT DIE "A", 7X7 1.4T 201277792 ETKI0003 D

20 Anam/TQAF001 DIE L/L CUT DIE "B", 7X7 1.4T 201277793 ETKI0004 D

21 Anam/TQAF001 DIE L/L CUT DIE"C", 7X7 1.4T 201277794 ETKI0005 D

22 Anam/TQAF001 PUNCH L/L CUT PUNCH, 7X7 1.4T 201277795 ETKI0006 D

23 Anam/TQAF001 PAD L/L CUT DIE PAD, 7X7 1.4T 201277796 ETKI0007 D

24 Anam/TQAF002 DIE CAM FORM DIE W/DFC,14X14 1.0T 201279473 ETKJ0001 D

25 Anam/TQAF002 PUNCH CAM FORM PUNCH W/DFC, 14X14 1.0T 201279474 ETKJ0002 D

26 Anam/TQAF002 PUNCH CAM PUNCH GUIDE, 14X14 1.0T 201277837 ETKJ0003 D

27 Anam/TQAF002 DIE CORNER TRIM DIE A, 14X14 1.0T 201277845 ETKJ0005 D

28 Anam/TQAF002 DIE CORNER TRIM DIE B, 14X14 1.0T 201277846 ETKJ0006 D

29 Anam/TQAF002 PUNCH C/T PREFORM PUNCH W/DFC, 14X14 1.0T 201279475 ETKJ0007 D

30 Anam/TQAF002 PAD C/T & PREFORM PUNCH PAD, 14X14 1.0T 201277847 ETKJ0008 D

31 Anam/TQAF002 DIE L/L CUT DIE, 14X14 1.0T 201277848 ETKJ0009 D

32 Anam/TQAF002 PAD L/L CUT DIE PAD, 14X14 1.0T 201277849 ETKJ0010 D

33 Anam/TQAF002 PUNCH L/L CUT PUNCH, 14X14 1.0T 201277839 ETKJ0011 D34 Anam/TQAF002 DIE PREFORM DIE W/DFC, 14X14 1.0T 201279476 ETKJ0012 D

35 Anam/TQAF002 DIE SINGULATION DIE (64/100/120), 14X14 1.0T 201277840 ETKJ0013 D

36 Anam/TQAF002 PAD CAM FORM PUNCH PAD, 14X14 1.0T 201277841 ETKJ0014 D

37 Anam/TQAF002 DIE SINGULATION DIE (80/128), 14X14 1.0T 201277842 ETKJ0015 D

38 Anam/TQAF002 DIE PREFORM DIE W/DFC, 14X14 1.4T 201279477 ETKK0001 D

39 Anam/TQAF002 DIE CAM FORM DIE W/DFC, 14X14 1.4T 201279478 ETKK0002 D

40 Anam/TQAF002 DIE L/L CUT DIE, 14X14 1.4T 201277831 ETKK0003 D

41 Anam/TQAF002 PUNCH L/L CUT PUNCH, 14X14 1.4T 201277832 ETKK0004 D

42 Anam/TQAF002 PAD L/L CUT DIE PAD, 14X14 1.4T 201277833 ETKK0005 D

43 Anam/TQAF002 PUNCH CAM PUNCH GUIDE, 14X14 1.4T 201277834 ETKK0006 D

44 HANMI/TQHF001 PUNCH CAM FORM PUNCH,20X20 TQFP 201283283 ETKM0001 D45 HANMI/TQHF001 DIE CAM FORM DIE,20X20 TQFP 201283284 ETKM0002 D

46 HANMI/TQHF001 DIE CORNER TRIM DIE, 20X20 TQFP 201283285 ETKM0003 D


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RMS stands for Resource Management System. It is a MESA feature which helps us monitorand control key plant resources such as equipment, tooling, and operators.

User Inputs Employee no.User chooses user type to determineRMS transaction privileges.

The Current status and Event ID

are already given by the system.The buttons of all Available RMS

transactions will be enabled.

User Inputs

Resource Name.

.User clicks button of the desired RMS Transaction.


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Because of the system generated, the teameducate and teach maintenance on all shifts tocomply to the new system and observe properorderliness and 5s

BENEFITS DERIVED FROM THE NEW SPARE PARTS SYSTEM

Easy to locate the parts as each of the spare parts have a specificlocation and each of them is labeled properly and arrangedaccordingly for fast retrieval

Each item is being categorized and classified as tooling parts,Fast moving or Priority Parts, General parts, Slow moving or non-moving parts,

It is hard to monitor the inventory of spares when 5s is not

properly done on your spares, now we can monitor the usage ofeach part and define a min - max level

We have shorter time for locating spare parts due to scheduledBreakdown and PM Schedules, as well as shorter time to repair

Most importantly, we can control our stock on hand of spares sothat we can avoid unnecessary stock-up or double ordering

Proper Instructionsfor handling toolings

and returning them



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INVENTORY CONTROL PROCEDURES

MODULE 3


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Raw materials are inventory itemsthat are used in the manufacturer'sconversion process to producecomponents, subassemblies, orfinished products.

TYPES OF INVENTORY

RAW MATERIALS INVENTORY WORK-IN PROCESS

Work-in-process (WIP) is made up ofall the materials, parts (components),assemblies, and subassemblies thatare being processed or are waiting tobe processed within the system.


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TYPES OF INVENTORY

Maintenance, repair, and operating

supplies, or MRO goods and spares,are items that are used to support andmaintain the equipment used to pro-Duce the production process and itsinfrastructure.

A reflection of the amount of manu-

factured product in stock that isavailable for customer purchase. Onan income statement, the finishedgoods inventory is considered anasset to the company

FINISH GOODS INVENTORY SPARE PARTS INVENTORY


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For the successful spare parts management, it is essential to analyze thespare parts inventory based on various characteristics such as frequencyof issues, the annual consumption value, the criticality, the lead time andthe unit price.

Inventory analysis aids selection of policies forselective control. Most commonly used inven-tory analyses are:

FSN Analysis ABC Analysis VED Analysis SDE Analysis

HML Analysis

FSN Analysis stands forFast moving, Slow moving and Non moving items. Thisform of classification identifies the items frequently issued, less frequently issuedfor use and the items which are not issued for longer period, say, 2 years.

MRO INVENTORY ANALYSIS AND CLASSIFICATION


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Fast MovingItems

Slow Moving

Items

Non-MovingItems

ObsoleteItems

Parts are used

regularly

Parts are used

less than10x / year

Equipment hadalready beenretired and

decommission

Machine is still usedbut the part is

critical and decidedto be stocked buthad not been used



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Slow Moving Items

Items which are infrequently used,usually less than 10x per year but thedemand can still be forecasted withsome accuracy. Others also calledthem Infrequently Used Inventory

Fast Moving Items

Also termed as Active Inventory are items that havebeen identified and used frequently that its futuredemand can be predicted with good accuracy. If apart, spare or item had been used at least once amonth then this can be classified as fast movingitem. Samples include :

Smaller spare parts, standard bearings, oil seals gaskets,lubricants, supply items such as rags, gloves, cleaningmaterials and solvents, consumable parts



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Non-Moving Items

Others termed this as Rarely UsedInventory. These are items are difficult to obtainor their lead time to acquire usually take severalmonths others even years either because mostof these parts are unavailable or imported fromother countries. Most of them where recommended

by the OEM to have a stock on the storeroom sincethe part is classified as critical. Hence, they sit onthe storeroom shelves for years untouched.

The difference between non-moving andobsolete items is that the machine or asset

is still used in the plant An analysis of 100 MRO Stores indicate that50% or more of items had no usage for thepast 2 years. Yet most of these items shouldbe on hand when needed



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Obsolete Items

A part or spare may become obsolete eitherbecause the equipment was modified or theequipment was retired and decommissioned.

When an equipment is retired, the storeroomshould be notified and the parts needs to beidentified and scrap as well

Parts from this equipment eatup space from the storeroom.If you are a big plant withseveral department, both the

department and storeroomcan notify other departmentsif they have similar equipmentotherwise the best option herewill be to sell the part as scrap



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SDE Analysis,classification of spares is based on lead time to acquire the part

This classification is carried out based on the lead time required to procure thespare part. The classification is as follows:

SCARCE (S) : Items which are imported andthose items which require more than 6 monthsof lead time.

Easily Available (E) : Items which are easilyAvailable, usually less than a fortnight lead time.

Difficult (D) : Items which require more than afortnight but less than 6 months of lead time.Note : Fortnight means 2 weeks or 14 days

SDE Analysis and c lassi f icat ion helps in redu cing the lead t ime torequi red the parts . This can reduce dow nt ime in case of stock out .

This wi l l also resul t in streamlining the purc hase and receiv ing

systems and procedures.


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VED Analysis, Classification Based On CriticalitySeveral factors contribute to the criticality of a spare part such as if the partbelongs to a bottleneck equipment, then it is a critical part. Also, if lead timeTo acquire the spare would take months leaving the equipment idle. Based oncriticality, spare parts are conventionally classified into three classes :

VITAL (V) : A spare part will be termed vital,if its non-availability there will be very highloss due to production downtime or a highcost will be involved if the part is procuredon emergency basis.

ESSENTIAL (E) : A spare part will be consideredessential if moderate loss is incurred due to non-availability of the part. For example, bearings for

motors of auxiliary pumps will be classified asessential.

DESIRABLE (D) : A spare part will be desirable if the production loss is not verysignificant due to its non-availability. Most of the parts will fall under this category.Either the equipment has some redundancy

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4-Spare Parts Management 1

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