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Identifying and Managing Critical Spares

If you have ever had a component part fail without a replacement readily at hand, there’s a very good chance you vowed never to let it happen again. Unfortunately, for too many manufacturing companies, this scenario represents the primary method for identifying critical parts. Companies know they ought to determine which machine components should be considered critical and make sure they have a plan in place to replace them quickly. But they also know the process is tedious, time consuming, ties up labor and management resources, and requires information that may not be easily obtained.

Critical Benefits

Keeping the time between component failure and restart creates significant benefits:

  • Increased uptime – Fewer emergency repairs are required as critical-parts management includes clean, complete data on mean time between failures and other documentation that makes preventative maintenance more precise and easy to schedule.
  • Lower shipping costs – When the replacement is identified as critical, it can be ordered and delivered as part of a regular shipment. There is no need to pay extra for expedited shipping or off-contract purchasing.
  • Better productivity – Missing or obsolete replacement parts become problems of the past when an effective critical-parts management program makes the right part available at the right time.
  • More efficient use of space, money, and other resources – As parts labeled “non-critical” are removed from inventory, carrying costs decline and warehouse workers spend less time sifting through SKUs in search of what is really critical.

Maintaining Critical Mass

With all these benefits, supply chain directors and warehouse managers must fight the urge to keep “one of everything” in stock. The necessity of keeping maintenance, repair, and operations, logistical and carrying costs as low as possible must also guide their decisions. Company personnel or third-party supply chain managers must balance productivity with cost reduction by accurately categorizing parts as critical or non-critical, and implementing management systems that best suits each.

So how does one determine which parts are critical?

Critical parts are those that are:

  • Custom made
  • Have long lead times from ordering to delivery
  • Severely compromise production or safety when they break

In short, when they stop working, they bring production to a halt. If the cost of the downtime caused by a part’s failure without another in stock is greater than that of carrying the replacement, the part may be considered critical. Other considerations include ease of sourcing, time required to replace the component, risk of obsolescence of the replacement, and more.

An effective management protocol transcends peace of mind, resulting from ensuring critical parts are available when needed. It also can provide insights into breakage patterns, wear rates, and other relationships that can catalyze more efficient maintenance schedules, procurement policies, and inventory practices.

Critical Sourcing

While a complete bill of materials is the best way to reduce down time, comprehensive BOMs complete with accurate minimum and maximum levels are rarely available in the real world. In practice, reducing down time requires a formal analysis to keep critical parts within reach and located where maintenance workers can access them quickly.

SDI helps companies forecast part performance to optimize the performances of their equipment, personnel, and strategic assets. Working with client companies’ operations, maintenance, safety, supply chain, and other managers, SDI quantifies the possibility and consequences of equipment failure in terms of order backlog, reduced productivity, employee safety, lost goodwill, etc. We then determine the best way to mitigate these risks. By leveraging a vast supplier network and forged-in-steel industry relationships, SDI can customize procurement of critical spare parts, establishing reliable supply at the lowest cost. These solutions include processes to guarantee critical spare parts are either always in stock or deliverable within an acceptable time frame, negotiating with suppliers to achieve volume discounts, creating streamlined but comprehensive maintenance routines to maximize component life, and more.

Managing your maintenance, repair, and operations inventory and identifying critical parts requires a commitment of time, personnel, management skill, and other resources that many lean manufacturing companies cannot spare. That’s where SDI comes in! Let us help you identify critical parts and guarantee they are in stock the next time you need them.

Success Story

Our former solution provider was not independent; they were a supplier of parts. It's not the best thing to have a supplier be your MRO outsourcing provider. With SDI, we have a truly independent sourcing agent looking after our best interests.

SDI at Work

In the third post in this series on MRO As-a-Service by Spend Matters, Pierre Mitchell and Michael Lamoureux talk about how managing MRO as a process delivers benefits from efficiency to effectiveness and beyond to an evolutionary phase. The next generation of value, MRO-as-a-Service, helps organizations build intelligent, agile, scalable and integrated supply chains (direct and indirect).

The project team has worked its way through Define, Measure, Analyze, and Improve. It’s time to begin the Control phase. The key stakeholders gather to evaluate the solution as implemented and create a plan to sustain the improvements. The goal is to standardize the improved processes, establish an audit schedule and schedule periodic follow-up to identify additional opportunities for improvement.