Introduction of the Risk Based Optimization and Risk Criteria Analysis of Spare Inventory in Petrochemical Plant

Abstract

Spares plays an important role in the asset integrity management. In petrochemical industry, great amount of money is occupied by spares which are lower inventory but higher unit price (critical spares). Some typical inventory optimization models, such as Economic Order Quantity (EOQ) method, which focuses mainly on the optimization of storage and order costs, is unsuited for the optimization of inventory of critical spares. While consume based analysis method can precisely predict the demand of spares only if the historical consuming data is adequate and sufficient. But in petrochemical industry, it is always difficult to obtain such data. In order to quantify the optimal spare inventory and determine stock strategy of critical spares, a risk based inventory analysis methodology was put forwarded in this chapter. The probability of stockout was obtained by systematic consideration of spare parts reliability, configuration of available spare equipments and spare parts and lead time of order. Taking stockout-costed loss into consideration, the risks of all critical spares of pumps in Y Company were obtained. It was found that the quantity of low risk spares whose potential yearly loss are less than 500,000 RMB take up to 80 %, while it account for 83 % of overall stock fund. It is except that great amount of money can be saved if those spares can be optimized by risk based spare optimization method. By comparing of the amount of spares and associated proportion of fund its’ occupied, the determination of the risk criteria in spare inventory optimization was also discussed in the last part of this chapter.