To cite this article: S. Cavalieri , M. Garetti , M. Macchi & R. Pinto (2008) A decision-making framework for managing
maintenance spare parts, Production Planning & Control: The Management of Operations, 19:4, 379-396, DOI:
10.1080/09537280802034471
To link to this article: http://dx.doi.org/10.1080/09537280802034471
Dipartimento di Ingegneria Industriale, Universita` degli Studi di Bergamo, Dalmine(Bergamo), Italy; bDipartimento di
Ingegneria Gestionale, Politecnico di Milano, Milano, Italy
1. Introduction
Managing stocks of MRO (maintenance, repair,
operations) materials is an issue of utmost importance
for capital intensive companies. Unlike for materials
and components directly involved in the production
flow of new products, the expertise required for
assessing the most suitable stocking policy for a
MRO item is not merely based on a logistics and
financial background, but must also reason upon
technical and maintenance skills. As evidence, though
inventory holding cost and obsolescence risk push for a
streamlined warehouse, the prompt unavailability of a
spare part can fall out into a long and unproductive
downtime of the production/service equipment, with
direct consequences on the company profit (Sarker and
Haque 2000).
As Figure 1 shows, for unplanned breakdowns,
which are typical of a corrective maintenance policy,
the overall downtime is made of many components
that can heavily jeopardise the productivity of a plant.
Apart from the active time required for removing the
cause of the breakdown, there are specific time
components which are due to the logistics support to
the maintenance activities. Going into more details, if
the spare part is not detained, there could be an
administrative delay, in contacting and negotiating
with the supplier, and a logistic delivery time which,
*Corresponding author. Email: marco.macchi@polimi.it
ISSN 09537287 print/ISSN 13665871 online
2008 Taylor & Francis
DOI: 10.1080/09537280802034471
http://www.informaworld.com
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Time to repair
(fault state duration after
occurrence of a failure)
Active repair time
Admin.
delay
Logistic
delay
Setup
time
Diagnostic
time
Repair
time
Startup
time
Unavailability
costs
Stock level
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Technical materials
Materials require a specific code system.
Variety is in general high, due to specific spare parts or parts
built on order.
Some materials are characterised by low purchasing costs, but
many others are characterised by high purchasing costs (e.g. in
the case of specific or on order parts).
Materials are characterised by a low consumption rate.
In most of the cases, material consumptions are unpredictable.
Sourcing of spare parts is often limited to one or a few
suppliers.
Procurement lead times are differentiated and, in case of
specific or on order parts, they may be quite high.
Phase 1
Part coding
Phase 2
Part classification
Phase 3
Part demand forecasting
Phase 4
Stock management policy
Phase 5
Policy test and validation
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QUANTITATIVE
METHODS
ABC
FSN
QUALITATIVE
METHODS
VED
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RELIABILITY
FASED FORECASTING
DATA
BANKS
LIFE DATA
ANALYSIS
TIMES SERIES
BASED FORECASTING
EXPONENTIAL
SMOOTHING AND
DERIVATIVES
ARIMA
SOFT
COMPUTING
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1.32
LUMPY DEMAND
CV2
0.49
INTERMITTENT BUT
NOT VERY ERRATIC
SMOOTH DEMAND
ADI
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STOCK SIZING
DEMAND
STOCHASTIC
DEMAND
CENTRALISATION/
DECENTRALISATION
REPAIRABILITY
DETERMINISTIC
DEMAND
NON
REPAIRABLE
SPARE PARTS
REPAIRABLE
SPARE PARTS
CENTRALISED
LOGISTICAL
SUPPORT
DECENTRALISED
LOGISTICAL
SUPPORT
Henceforth, decisions related to inventory management results from the combination of three
different drivers: demand, repairability and centralisation/decentralisation. The resulting selection tree
(reported in Figure 7) will be used in the following
to support the selection of the proper stock sizing
model, according to the characteristics (or features) of
the given domain.
3.4.1 Stock sizing for stochastic demand with
non-repairable items
Most commonly, the assumption of a constant failure
rate is adopted for stock sizing. This means that the
part is assumed to fail within its useful life cycle phase,
where its failure rate l can be assumed as constant (this
means that its reliability function is exponentially
distributed or, equivalently, the repair orders occur
according to the Poisson distribution).
The Poisson distribution can be adopted as a good
approximation for the stock sizing of spare parts
when the demand rate in a period T is not very high.
The Poisson equation assumes that d T is not a very
large number (Jardine and Tsang 2006). In practice,
this situation is valid for the slow moving parts.
Applying the Poisson distribution, a stock size S to be
kept can be calculated, based on a target level of fill
rate (i.e. the probability of not running out of stock
when a failure occurs). Equation (4) expresses the
Poisson model.
Pr f1 n > Tg
S1
X
d Ti
i0
i!
edT R 4
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Methods
Results
Phase 1
Part coding
Part code
Phase 2
Part classification
Rough-cut classification
Part criticality analysis
Phase 3
Part demand forecasting
Phase 4
Stock management policy
Stock sizing
Phase 5
Policy test and validation
Policy verification
Figure 8. Overview of the decision-making steps, main methods used and intermediate results when using the proposed
framework.
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Methods
Phase 1
Part coding
Phase 2
Part classification
Rough-cut classification
Part criticality analysis
Phase 3
Part demand forecasting
Phase 4
Stock management policy
Stock sizing
Phase 5
Policy test and validation
Policy verification
Results
Figure 9. Decision making framework and methodological drivers in the use case.
powering heavy mechanical machinery were considered (grouped in accordance to technical features in
13 different families). Large motors are spare parts of
slow moving type (according to a FSN classification);
in accordance to the VED analysis, they can be
considered as Vital, being installed in primary lines of
the production processes (whose unavailability leads
to production capacity reduction, entailing high
hidden costs). A detailed criticality analysis was
carried out afterwards, for a better understanding of
the priorities to take into account. This criticality
analysis aimed at identifying the types (families) of
electrical motors deserving more attention. This was
achieved by applying a quantitative method, i.e. using
a Pareto ABC and merging two drivers (the unit
purchasing costs and the number of installations),
according to their alignment to the plant operations
strategy. Only three families of motors went out as
critical, over the 13 families of large motors installed
in the company.
Phase 3 Part demand forecasting
The demand requirement for spares is estimated
considering constant failure rates and the number of
installed motors (assuming comparable operating
conditions across the different sites). This is equivalent
m e nj j (i.e. the failure
to assume that predicted
j
rate of family j, depends only on the number of
installed motors mnj).
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Notes on contributors
Marco Macchi is a researcher at
Politecnico di Milano. Currently, he
is a teacher of modelling of production systems, laboratory of production
systems and logistics, design of production plants. He is also a lecturer of
maintenance management, operations
management and automated production systems, Vice Director of the
Executive Master on maintenance management, lecturer of
methods of modelling and simulation in the context of the
PhD course in Ingegneria Gestionale. He is author or coauthor of two books and more than 60 papers, published
nationally and internationally. His research interests are
maintenance management, production system engineering
and automation, industrial production management.
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Note
1. Based on the failure rate, the predicted mean time to
failure can be directly calculated as MTTFpredicted
j
1=predicted
, when predicted
is constant.
j
j
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