USE AND APPLICATIOS OF OPTIMIZING SELECTIVE INVENTORY CONTROL TECHNIQUES OF SPARES FOR A CHEMICAL PROCESSING PLANT

Abstract

This paper presents the implementation of an improved inventory management and control system of a chemical processing industry. Inventory management system involves the procurement, stocking, and issue of materials to the maintenance department as and when required. Inventory management is the main area in which many process industries are suffering. The work is concentrated with the inventory management problems of a chlor-alkali industry. The aim of this work is to design inventory models for such a system in a process industry. The effort of an effective inventory strategy is to optimise usage of materials while minimizing cost. The existing system of inventory control of spares reveals that past data cannot be taken as the major decision criteria. The important decision making criterion related to spares is criticality, lead time and consumption value which need to be accounted for effective control of inventory management in the organization. Data are collected from various sources like log books, ledgers, annual financial statements and published articles of the company. Interview method is used to collect primary data regarding the existing inventory management system. Selective treatment is done based on ABC and VED analysis which were then combined to give a two dimensional picture and stocking policies are suggested for each category. As an extension of the above analysis, the other parameters called lead time and service level are incorporated in order to obtain 3D models and suggestions were given to improve the inventory management of spares. The key performance indicators were also established to give benchmark operations. Simulation technique is used to obtain the probable lead time and demand, optimum re- order quantity and optimum re- order level, minimum total cost which are also analyzed in this paper.