Whitepaper: Spare Part Inventory Optimization
Spare Part Inventory Optimization
This spare part optimization practice is carried out on two plants of a Stork client active in the oil and gas sector. The paper reviews two (easy to use) methodologies to identify minimum holding (stock) levels and risk of stocking-out.
The practice starts with a categorization of the introduced parts into three types (Critical, Insurance and Consumables). Then common spreadsheets are used to identify spare parts’ minimum holding levels. The analysis reveals a highly unbalance stock level in one of the client plants, concludes a risk of stock-out of 2,3 M$ and a Return Of Investment within a few weeks.
In this whitepaper we discuss the following topics:
1. Why is spare part analysis important?
2. Spare parts and categories
3. Minimum holding level and risk of stock-out
4. A case study