For the wide range of businesses that deal with physical plants, heavy machinery or any equipment that consumes maintenance materials, spare parts management has to be a major consideration. There’s no single reason why companies need to have a strong spare parts planning system in place, as the benefits provided range across many different aspects of operations. Simply put, spare parts management drives efficiency and creates savings for companies, whether they’re regularly dealing with large, high-value assets, a range of smaller machines and systems or a mix of both.

What does effective spare parts management entail?
Businesses need to have both an effective software platform in place and the right level of connectivity and information sharing between different stakeholders, both inside and outside of an organization. Norm Messenger, Inspirage service parts and reverse logistics solutions manager, said there are two major areas that need to be addressed when it comes to spare parts management: good, complete sets of data related to the items using the parts and a strong forecasting process. Combined, these two concepts create the foundation of an effective spare parts management plan.

Strong item master data – including reliability estimates, sources of supply and repair among other considerations – is essential. With accurate and up-to-date information, the most efficient inventory levels can be found while taking any and all unique factors into consideration. This includes tracking different versions of similar goods so the right parts are supplied to the correct location. Complete data is a significant need for all businesses that rely on machines large and small to complete tasks, but is most acutely felt by companies supporting high-value assets across a large geographic area.

“If you’re trying to support those [complex assets] across a wide geography, you need to know, as part of that item master, which customers have what finished goods and what versions of spare parts,” Norm Messenger said.

The other building block of effective spare parts management is strong forecasting that takes various data streams into account. While many businesses use sales data to establish their forecasting plans, it’s not enough to accurately predict needs while also taking the product lifecycle and other unique factors into account. A variety of stakeholders have to participate and share information for forecasting to truly be useful. Engineering and maintenance teams, as well as customers, all have to be part of the process.

Maintaining high-value assets and reducing downtime are just two aspects of spare parts planning and management.

The 3 major benefits of effective spare parts management
Simple but vitally important considerations and more complex improvements are both realized with effective spare parts planning. This is true whether an organization focuses on high-value, complicated assets such as power plants and oil rigs, operates a fleet of company vehicles or is in the business of manufacturing using a wide variety of different machines and process. While there are plenty of secondary and tertiary benefits that also come along with having the right parts in the right place at the right time, they all branch off from these three major advantages:

1. Increased service level of inventory: One way to sum up this advantage, according to Messenger, is that “You do more with less.” The increased service level is most closely tied to the concept of right parts, right place, right time. Businesses that implement the software and systems that drive efficiency in the spare parts planning space typically see a gain between 5 percent and 10 percent in inventory service levels following a good implementation. Parts are better able to be put to use quickly and effectively.
2. Improved equipment uptime: Downtime simply due to the want of a specific part – or even an array of different ones – is generally avoidable with a strong spare parts management system. While there will be the occasional exception, in general asset uptime will improve considerably, as will the first-time fix rate. Overall, the availability of capital assets improves between 2 percent and 5 percent. This always leads to savings, but the example of individual, large and high-value assets is the most striking. Messenger pointed out that, with a power plant or oil rig, tens or hundreds of thousands of dollars are lost for each hour of downtime. With good spare parts management, time spent with major or minor assets inoperable is reduced.
3. Decreased investment in inventory: Finding the optimal balance between stocking levels for inventory and the investment made into spare parts is difficult without the right tools. Companies hold themselves back whether they’re carrying too much inventory or too little. A stocking level above the optimal range ties up funds unnecessarily and increases the risk that parts won’t be used. A spare parts inventory level below the right level means otherwise-avoidable instances of downtime become regular drags on productivity and revenue. An effective spare parts management and planning system allows businesses to reduce their inventory – freeing up capital – while still maintaining high levels of service and accessibility.

What’s in store for the future for spare parts management?
The concept of spare parts management as a discipline has evolved as technology has provided faster, more accurate methods for tracking, reporting and synthesizing information. One area where advances are already seen, and where significant further improvements could arise, is in the Internet of Things. The ability to connect both low- and high-value assets to a network and then have those items instantaneously transmit information about operations, efficiency, wear and tear and other concerns. With data that doesn’t come from projections but the machines themselves, a lean just-in-time delivery model becomes a reality, leading to further and more significant savings.

The data related to current health along with engineering specifications means that maintenance and replacement parts ordering can happen in concert, creating further savings and reducing downtime accordingly. This sense and respond model is the future of spare parts planning as a whole and, Messenger said, is what industry leaders are currently working toward.