Spare part inventory optimization

Spare part inventory optimization

A briefing of theory and a good practice of spare part inventory optimization

Explore efficient techniques that can help you reduce plant spare part turnarounds

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
5. Recommendations
6. Conclusions

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