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SPT-OM ppt

Date post: 02-Apr-2015
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Introduction: Maintaining the production capacity of an organization is an important function of production and operations. Hence plant, Building, machinery and other fixed assets are critical to manufacturing or service concerns. However these fixed assets are subject to deterioration due to their continuous use and exposure to the environmental conditions over a period of time. Therefore all the physical facilities and equipments need to be kept in good working condition and necessary repairs to be carried out when break down occur. So that productive system can perform as intended.
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Page 1: SPT-OM ppt

Introduction:Maintaining the production capacity of an organization is an important function of production and operations.

Hence plant, Building, machinery and other fixed assets are critical to manufacturing or service concerns.

However these fixed assets are subject to deterioration due to their continuous use and exposure to the environmental conditions over a period of time.

Therefore all the physical facilities and equipments need to be kept in good working condition and necessary repairs to be carried out when break down occur. So that productive system can perform as intended.

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For maintenance of these fixed assets it is necessary to keep inventories of spare parts and other operating supplies.

Objectives of keeping these spare parts are 1) Necessary repairs and maintenance can be carried out with in minimum possible time. 2) Minimize the machine or equipment down time.3) Avoid the continuous loss of production. Management of spare parts helps to achieve higher productivity, better quality output and reduced the cost of operations. Efficient spare parts management increases the efficiency of maintenance management which helps the firm to utilize its production assets in an optimal manner.

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What is a SPARE PARTSpare part means a part or subunit which is available in stock for substitution when needed. The purpose of keeping spare parts is to replace identical or similar part if the original part becomes fully worn out or faulty. Hence for keeping the machines and other equipments in good conditions there is the availability of right spare part at right time in right quantity.

CLASSIFICATION OF SPARE PARTSI) on the basis of usage ratei) Regularly used spare parts: These are identical to certain parts in the machine or equipment. Life time is less than the machine as a whole. Hence such spare parts are to be replaced at least once or several times during the life time of machine.

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Irregularly used spare parts

Irregularly used spare parts are those parts which are identical to certain parts of the machine. Its life time is same or longer than the service life time of the machine . In certain situations even if the machine become obsolete these parts may still be in working condition.For example: Crank case of an Automobile engine, propeller shaft of an aircraft engine etc.

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II) On the basis of movement analysisFast moving: are those which have been move from stores at least once in two years.Slow moving: are those which have not been drawn from stores at least once in 2-4 years. Non moving items are those which have not been drawn from stores even once in five year duration.III) On the basis of functional characteristics.i) Insurance sparesii) Rotable sparesiii) Over hauling sparesiv) Maintenance spares

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Insurance sparesInsurance spares are the functional parts of the machine. Life of spare parts is usually same or slightly lesser than that of machine.Normally procured along with original machine.Features: 1) They are costly2) Have high degree of reliability. Hence probability of the failure is low during the life time of equipment.3) Absence of these spares at the time of breakdown leads to heavy loss of production.4) Due to the high cost one or two numbers of these spares are held in inventory.

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ROTABLE SPARESThese are spare parts which are repaired and rectified and kept in stores for reuse. As they are costly parts they are not scrapped but are repaired and reused.examples: Pumps, engines, electric motors, disc break drums etc.Features: 1) Very expensive item cannot be scrapped but salvaged after repair.2) Procurement lead time is high.3) May not be readily available with the supplier and hence may have to order and resulting in long lead time for procurement.

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III) Overhauling spares:Once a machine reaches the end of its service level, Plant manager has an option either to scrapping it of overhauling it and continue to use. The purpose of conducting overhauling is to undertake a thorough check of machine to get a new life to it. Example: Aircrafts are grounded and overhauled after certain hours of flying to make them flight worthy again.

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Maintenance Spare PartsSpare parts which are frequently required for replacement of old parts due to break down by wear and tear are termed maintenance spares. Example Bearings, pipe fitting valves etc.Features:1) Fast moving, required repetitively, cheaper cost.2) They do not create problem in planning the requirement as they are regularly consumed.

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FACTORS INVOLVED IN SPARE PARTS INVENTORY PROBLEMS1) Location of the plant2) Import policy of the government3) Nature of Plant and machinery4) Availability and lead time for procurement5)Age of machines6) Reliability of parts

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SELECTIVE INVENTORY CONTROL MODELS FOR MANAGEMENT OF SPARE PARTS

1) HML2) VED3) SDE4) GOLF5)SOS6) FSN7) XYZ

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VED ANALYSISIn VED analysis ‘V’ stands for vital, ‘E’ for essential and ‘D’ for desirable.

In VED analysis stocking policy is based on criticality of items. Criticality means how a machine is important for production. i.e., if a machine stops production how much loss incurred in production process.

Vital spare parts are those which can cause stoppage of plant f not available. Such spare parts are also known as capital of insurance spares. Here inventory policy is to keep at least one number of the vital spares irrespective of its value.

Spare parts supplied by foreign manufacturers are treated as Vital spares because of the long lead time required for procurement.

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Essential spare parts are those whose non availability may not adversely affect production. Such spare parts may be available from many sources with in the country and the procurement lead time may not be long. Hence a low inventory of essential spare parts is held.

Desirable spare parts are those which, if not available can be manufactured by the maintenance department or may be procured from local suppliers and hence no stock is held usually.

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HML ANALYSISHML stands for high value, medium value and low value items. In this analysis price criterion is used.

For example , In a firm, management may decide to categorize items having unit price above Rs 5000 as ‘H’ items. From Rs 1000 to Rs 5000 as ‘M’ items and below Rs 1000 as ‘L’ items.

On this basis management may delegate authority to various levels of purchase officers or managers to authorize and sign purchase orders. For high value items, alternative sources of suppliers are developed.

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Benefits of H-M-L Analysis1) It helps to estimate storage and security requirement For example high price items such as bearings, gears, cranks etc kept under safe custody.2) control over consumption should be done at department head level. For example high and medium price items are authorized only by department heads after a cautious study.3) continuous stock verification. For example high price items are checked more than low price items.4) Evolve buying strategies to control purchases. For example high and medium category excess supply than the order quantity may not be accepted. While it may be accepted for ‘L’ group.

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S-D-E AnalysisSDE Analysis classifies items into 3 groups. They are

1) Scarce2) Difficult3) EasyIt focus on ease of procurement as criterion. Information so collected is used for finalizing purchasing strategies.

Scarce: This group include items of which there is a dearth are imported or obtained through canalizing agencies of the government. Such items are procured on annual basis without any EOQ analysis.

Difficult: This group include those items which are available indigenously but are not easy to procure due to the exotic raw material being used. Items which are difficult to produce are also come under this category.

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Easy: Items under this group are produced on a mass scale. Here parts are locally available, absence of string specifications and are easy to produce.G-O-L-F AnalysisThis stands for Government, Open market, Local or Foreign source of supply. This analysis is based on the nature of suppliers which determine quality, delivery, lead time, payment terms continuity of supply and administrative work involved. ‘G’ group covers items procured from government suppliers such as State trading corporation, Metals and minerals trading corporation and other public sector companies.Transactions with the government involve long lead time and payment in advance or against delivery.

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‘o’ group items procured from non government suppliers. Transactions with this category of suppliers involve moderate delivery time and availability of credit ranging from 20 days to 2 months. When more suppliers queuing up there is tendency to reduce lead time.‘L’ group indicates local suppliers. The items bought from local suppliers are those which are instant through cash purchase or purchased against blanket orders.‘F’ group contains items which are purchased from foreign suppliers. The transaction with such suppliers involve lot of formalities and procedural work. These include clearance from Direct General Supplies and Disposal [DGSD], Opening of letter of credit, Shipping clearance

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X-Y-Z AnalysisXYZ classification is based on the value of inventory of materials actually held in stores at a given time (stock checking annually or half yearly).X-Y-Z analysis helps to control average inventory value by focusing efforts to reduce the inventory of ‘x’ items . These items are usually 10% of the number of items stored, but accounting for 70% of the total inventory value.‘Y’ items are 20% of the number of items stored, and account for 20% of the total inventory value.Remaining 70% of the items accounting for 10% of the total inventory value are ‘Z’ items.

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F-S-N AnalysisFSN stands for Fast moving, Slow moving, and Non moving items.The classification is based on past consumption pattern.Items which are usually drawn from stores frequently are classified as fast moving items.Items which are drawn only once or twice a year are classified as slow moving .Items that are not at all drawn for the past two years are classified as non moving items. F-S-N analysis is useful to control spare parts, obsolescence of raw materials and other components.

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S-O-S Analysis‘S’ stands for seasonal items and ‘OS’ stands for Off-Seasonal items. It may be advantageous to buy seasonal items at low prices and keep inventory or buy at high price during off seasons. Based on the fluctuation in prices and availability suitable decision has to be taken regarding how much to purchase and at what prices.

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THANK YOU


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