| | MARCH 20228After-sales service of industrial products and components is a complex yet profitable driver for customer delight and loyalty. Due to the unique nature of spare parts and the dynamic environment in which after-sales service operates, inventory management of spare parts is relatively challenging and distinct from that of other material. High spares availability accompanied by low spares inventory are necessary to ensure maximum uptime of equipment at minimum costs.How Spare Parts Are Different?The following factors differentiate spare parts from other types of material:· Shortage Impact: Shortage of spare parts impacts equipment uptime and may have a cascading impact on production schedule and cycle time.· Product Life Cycle: Inventory of spare parts for new products and discontinued products needs to be planned based on non-traditional approaches, industry expertise and technical projections.· Spare Parts Peculiarities & Life Cycle: Tracking of substitutes, stocking of maintenance-only (i.e., non-production) material and managing obsolescence are important for effective inventory management of spare parts.· Demand & Supply: Deviation of actual maintenance material requirement from the maintenance Bill of Material (BOM), lower predictability of demand, unavailability of market research & forecasts and the menace of spurious parts can impact the accuracy of demand-supply calculations for spare parts.Inventory Management of Spare Parts: A Classification-Based ApproachA variety of criteria need to be considered for inventory planning and control of spare parts. Given below are a few:· Origin: Based on their origin or source, spare parts are classified as manufactured and purchased. Original Equipment Manufacturers (OEMs) usually have better control over parts that are manufactured inhouse as compared to those that are procured from external sources.· Criticality: From the perspective of their criticality for safe and effective functioning of equipment, spare parts are classified as vital, essential, and desirable necessitating high, medium, and low inventory levels, respectively.· Lead Time: Based on the lead time required for making them available, parts are classified as long, medium, and short lead time items that need high, medium, and low inventory levels, respectively.EFFECTIVE SPARE PARTS MANAGEMENT FOR INDUSTRIAL PRODUCTSBy Niranjan Ajgaonkar, Global Head - Enterprise Asset Management & Supply Chain Management, Ramco SystemsHigh spares availability accompanied by low spares inventory are necessary to ensure maximum uptime of equipment at minimum costs Vantage Point
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