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A Brief Analysis of the Management of Equipment Spare Parts

2009-03-01View Original

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Spares are parts that are kept on hand to meet the needs of equipment maintenance and to reduce downtime. There are many types of spare parts, and different classification methods exist. Generally, they are divided into purchased spare parts and self-made spare parts based on their source; purchased spare parts refer to components that a company orders from manufacturers, such as bearings, belts, modules, power supplies, etc ; Self-made parts refer to parts that are designed or manufactured by the enterprise itself). Spare parts management refers to the operational activities related to the planning, production, ordering, procurement, supply, and proper use of spare parts, in order to carry out equipment repairs on schedule, reduce downtime due to repairs, and lower repair costs. Spare parts management is an important part of maintenance work. Scientifically stocking and supplying high-quality spare parts not only helps to complete maintenance tasks on schedule but also enhances the reliability of equipment. Scientific storage and supply means ensuring timely delivery of the spare parts needed for maintenance, while minimizing the capital invested in storing these parts, maximizing the capital turnover rate, maintaining appropriate levels of stock for various spare parts, and employing advanced and scientific management methods. The management of spare parts is complex due to the wide variety of spare parts, the different lifespans and efficiency levels of these parts, large fluctuations in demand, as well as varying processing and ordering cycles. From a systematic perspective, tasks such as failures, repairs, and spare parts are viewed as an integrated whole. By studying the patterns associated with failures, repairs, and spare parts, and by weighing the impact of downtime and costs on equipment performance and economic efficiency, it is possible to manage these tasks effectively. This is the purpose of spare parts management. Spare parts management includes four components: technical management, planning management, warehouse management, and economic management. 1 Technical management mainly includes compiling and accumulating spare parts management documents, forecasting spare parts consumption, and establishing reasonable spare parts inventory levels and storage methods. 1) Principles for determining spare parts: Due to differences in the nature of enterprises, varying numbers of similar equipment in use, differences in management and maintenance levels, different degrees of standardization and generalization, as well as factors such as the presence of centralized spare parts suppliers and organizations in the region where the enterprise is located, each company should conduct a comprehensive analysis based on its specific circumstances in order to determine the principles for stocking spare parts. 2) Forms of spare parts inventory: The forms of spare parts inventory include finished product inventory (such as gears, spline shafts, piston rings, cylinders, bearings, etc.) ; Semi-finished product inventory (needed for repairs or dimension chain compensation during maintenance, such as bearing shells, shaft sleeves, etc.) ; Raw materials or material stockpiles (for spare parts where the amount of processing required is small and it is difficult to determine the exact dimensions for processing, a stockpile of raw materials can be used) ; Complete sets of spares (to ensure the accuracy of component fit and transmission precision, some spare parts must be manufactured and replaced in pairs, such as lead screws, nuts, boring bars, sleeves, and helical bevel gears of grade 1 precision) ; Component inventory (such as control modules and power supplies on rotary offset printing presses). 3) The reserve quota for spare parts refers to the amount of spare parts that a company determines through calculation, based on actual statistics and relevant data, in order to meet the needs of production and equipment maintenance. The reserve quota serves as the basis for preparing spare parts plans, and it guides the ordering, procurement, storage of spare parts as well as the management of spare parts warehouses. 2 Plan Management Plan management refers to the activities that take place from the time when ordering and manufacturing plans are formulated until the goods are received in stock, including making purchase requests, preparing plans, and organizing their implementation. Spare parts planning mainly includes purchased spare parts planning, self-produced spare parts planning, forging and casting blank planning, and spare parts repair planning. Ordering of purchased spare parts. Enterprises prepare plans for purchased spare parts according to different categories. In enterprises, there is a wide variety of spare parts for maintenance, and the methods of supply also differ (such as centralized ordering, direct ordering, ordering from abroad, or purchasing locally). Production of custom-made parts. When choosing between self-made parts and purchased parts, considerations should be given to both part quality and cost; purchased parts should be used whenever possible, and when self-production is necessary, a manufacturing plan for the parts must be devised taking into account both production and maintenance aspects. 3 Warehouse management after spare parts are received: Receiving, distributing, and maintaining them is a complex and meticulous task. Properly managing the inventory ledger for spare parts and various receipts and dispatch documents can provide a reliable basis for revising reserve quotas, reducing reserve funds, identifying patterns in the use of spare parts for repairs, and improving the level of spare parts management. 4 Economic management of spare parts: The funds for spare parts come from the company’s working capital, and the limit on the amount of funds allocated for these purposes can only be determined by the amount of assets that fall under the category of spare parts. At present, there is no universal method for accounting for these funds; each company can determine the appropriate approach based on its size, industry characteristics, and actual conditions (such as the age of the equipment, maintenance capabilities, and regional cooperation opportunities). The main calculation methods are as follows: 1) Estimate it at 2% to 3% of the original purchase price of the equipment. The standards for this method are relatively uniform, allowing for comparison among enterprises. 2) The average spare parts reserve fund is calculated by adjusting the figure using the product of the actual annual funds spent and the capital turnover period. 3) Determine the spare parts reserve fund for the current year based on the amount of funds spent on spare parts over previous years, particularly the amount spent in the previous year, taking into account the condition of the equipment and the repair plans for the current year. The amount of capital tied up in spare parts and the speed at which these parts are circulated have a direct impact on a company’s economic efficiency; they also reflect the level of efficiency in managing spare parts. It is necessary to minimize the amount of capital invested in spare parts, while still ensuring that maintenance is carried out and that the equipment remains in good condition. The capital utilization rate reflects the rationality of the funds used. Reducing the amount of capital tied up in spare parts and improving the capital turnover period are key issues in the economic management of spare parts. After a company shifts to an operational model, its management of equipment maintenance spare parts must adapt accordingly in order to enhance the company’s economic efficiency. 5 Modernization of spare parts management: The ABC management method is a management approach that helps to identify the key issues among a large number of complex projects or factors, focusing on the most important ones while also taking care of the less critical ones. To meet maintenance needs, companies stockpile a large variety of spare parts, which consumes substantial amounts of capital. Each type of spare part varies in terms of its importance, availability, and the time required for inventory replenishment. In order to identify what is critical and what is less so, to treat them differently, and to manage spare parts inventory effectively, they are classified into three categories: A, B, and C. The principles considered during the classification are as follows: the importance of maintenance and production, the difficulty of processing, the length of the order lead time, and the amount of capital required. Class A spare parts: Those that are highly important, difficult to manufacture, have long lead times for ordering, require small inventory levels but still involve significant capital investment. Class A spare parts account for 60% to 70% of the total inventory capital, while inventory items of other categories make up around 10% of the total. Such spare parts need to be strictly controlled; while ensuring the needs for repairs, safety stocks should be kept low in order to reduce capital accumulation and accelerate capital turnover. To ensure the availability of spare parts, increasing the frequency of orders can be employed, with economic and reasonable batch sizes and ordering intervals. The receipt and issuance of spare parts require detailed recording, as well as regular checks on inventory levels. Category B spare parts: They account for about 25% of the inventory, with the number of different types in stock making up 20%-30% of the total. Control over such spare parts can be relaxed; the order quantity can be increased slightly, and the timing for orders can also be more flexible. It is sufficient to follow the standard maximum and minimum stock levels as well as conduct regular inspections, while keeping proper records of incoming and outgoing items. Category C spare parts: The number of items in stock accounts for about 65% of the total, and they constitute 10%-20% of the total capital invested in inventory. Such spare parts are generally simple to manufacture, have a short processing or ordering cycle, and are available for purchase at any time in the market. Since such spare parts require little capital investment, but there are many varieties in large quantities, to simplify management, they can be ordered in bulk according to demand, thereby obtaining favorable prices and saving labor and time.

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