Spare Parts Inventory Research Articles

The Economic and Environmental Implications of Centralized Stock Keeping

SummaryRecent changes to the management of inventory and warehousing methods have created significant changes in business processes. These changes have produced economic savings to firms from reduced handling of supplies. The system‐wide impacts of this shift in methods on overall cost and the environment are still unclear, however. Reductions in inventories can provide significant environmental savings. In this article, we analyze the changes in inventory control methods and assess the environmental and cost tradeoffs between increased trucking and more efficient centralized warehouses. We consider the case of consolidating the spare‐parts inventory at U.S. Department of Defense warehouses and discuss similarities to other existing businesses. The case suggests large economic and environmental benefits due to reductions in warehousing expenses, despite higher transportation costs.

An overview of recent literature on spare parts inventories

Spare parts inventories are not intermediate or final products to be sold to a customer, and the policies that govern spare parts inventories are different from those which govern WIP and other inventories. This paper is an update of the discussion of maintenance inventories and a discussion of the future research needed. After a discussion of unique aspects of spare parts inventories, literature is reviewed which relates to management issues, age-based replacement, multi-echelon problems, problems involving obsolescence, repairable spare parts, and special applications.

Consolidating Maintenance Spares

The inventory of spare parts that a firm holds depends on the number of working parts and age of the equipment to be serviced, the expected failure rate associated with each working part, and the acceptable level of service. We model the problem of consolidation of spare parts to reduce overall inventory as an integer program with a nonlinear objective function. A linear reformulation of this model is obtained that helps solve some practical instances. A more compact implicit formulation is developed and solved using a specialized branch-and-price technique. We also demonstrate how this specialized branch-and-price technique is modified to devise a very effective heuristic procedure with a prespecifiable guarantee of quality of solution produced. This provides a practical and efficient methodology for maintenance spare consolidation.

Modeling diminishing marginal returns in ahierarchical inventory system of reparable spare parts

Safety stock levels of reparable spare parts in a hierarchical inventory structure are determined relative to the marginal improvement to end item availability provided by each stock level. This research is focused on the United States Air Force (USAF) hierarchical inventory and repair system as modeled by the Multi‐Echelon‐Technique‐for‐Recoverable‐Item‐Control (METRIC) methodology. A piecewise linear modeling framework is introduced based on output from the Aircraft Availability Model (AAM), a model that is part of the METRIC family of models. The underlying nature of the piecewise linear formulation provides integer stock levels with continuous decision variables. This model provides the highest attainable end‐item availability relative to an inventory of reparable spare parts. Additionally, the model provides a robust platform for the conduct of extensive post‐optimality analysis. While this research focuses on the METRIC family of models, the methodology developed may be applied to any hierarchical inventory of reparable spares that conforms to the model’sunderlying mathematical structure.

Modern Digital Simulation, III: Advances in Theory, Application, and Design-Electric Power Systems, Spare Parts Inventory, Purchase Interval and Incidence Modeling, Automobile Insurance Bonus-Malus Systems, Genetic Algorithms-DNA Sequence Assembly, Education, and Water Resources Case Studies

Modern Digital Simulation, III: Advances in Theory, Application, and Design-Electric Power Systems, Spare Parts Inventory, Purchase Interval and Incidence Modeling, Automobile Insurance Bonus-Malus Systems, Genetic Algorithms-DNA Sequence Assembly, Education, and Water Resources Case Studies

Aircraft maintenance and inventory control using the reorder point system

This paper includes the results of a sample survey of the reorder point system (ROP) in airline operator (hereafter AO) and maintenance service (MS) organizations. The presentation provides, at an executive level, an overview of the use of the traditional ROP system by companies to control their spare parts inventory. The survey shows that many companies, unsatisfied with their existing system, were looking for alternative concepts along the lines of the material requirements planning system (MRP).

“SPAM”: a computer model for management of spare-parts inventories in agricultural machinery dealerships

A user-friendly computer model has been developed to assist agricultural machinery dealerships in managing inventories of spare parts available at their stores. The model “SPAM” is encoded in PASCAL language on IBM-compatible personal computers. The model is based on mathematical theories that forecast economic order quantities, economic order point, and lag period based on both periodic factual input data analysis and update, and cash-flow economic assessment. The model also provides a comprehensive package for inventory management including stock analysis, inventory costs, part ordering, invoicing, and parts description. In addition, it takes into account monthly demand fluctuations resulting from variations due to seasonal agricultural operations. The model requires a minimum of 3 Mb hard disk space allocation, is initialized by an ‘autoexecution’ batch file, and is run from selective menus displayed on the user's screen. Printed outputs include parts description cards, stock analysis reports, part orders, and invoices.

An inventory management model for an inventory consisting of lumpy items, slow movers and fast movers

This paper describes an algorithm developed for the implementation of a new computorized inventory management system for spare parts in a large chemical plant, located in Belgium. The spare parts inventory contains about 34000 different types of items; 90% of the items are classified as lumpy items, as their demand frequency is less than 4 times a year. Empirical research by means of computer simulations has resulted in the proposal of the “Package Poisson” as a good fitting general distribution function for the demand pattern of the spare parts. This “Package Poisson” forecasts the demand occurrences by means of a Poisson distribution, taking into account that on each occurrence a package of several pieces is asked for. The quantity f of this package can be calculated from the variance and the average of the demand history data of each item. The performance of the algorithm has been measured by comparing the resulting reorder points with the reorder points calculated on the basis of other theoretical distribution functions. In all test cases the “Package Poisson” algorithm gives satisfying results.

Determination of reorder points for spare parts in a two-echelon inventory system: The case of non identical maintenance facilities

This paper deals with the determination of reorder points in a two-echelon spare parts inventory system. The system consists of a central warehouse that supplies several maintenance facilities. Each maintenance facility faces random demand. Inventory carrying cost is the same in both echelons, but the consequences of stockout vary among the maintenance facilities. An inventory management policy is proposed that determines the reorder point for each facility, so that predetermined requirements concerning relationships between the resulting service levels are met. The inventory system described in this paper is typical to class A (in a Pareto or ABC analysis) of spare parts inventories, i.e., military. Limited quantities of spare parts are stocked in an inventory system serving several maintenance facilities. The same type of equipment is maintained by each facility. However, due to readiness requirements of the organizational units served by each facility, the required service levels of the centers are not all the same.

Minimize Repairs, Maximize Service With O&M Program

An effective maintenance program contributes to the efficient operation of a water system by minimizing the cost of system repairs and maximizing service to the consumer. Traditionally, maintenance programs have been directed toward repair of broken equipment. This approach is known as the “emergency repair syndrome” and works well only if there is a rich inventory of spare parts and a large group of friendly suppliers and operators who are willing to jump to the rescue at a moment's notice. This is the first in a series of three articles. Part one covers goals of a maintenance program such as: acting and not reacting; goals of routine maintenance; planned maintenance; preventive maintenance; predictive maintenance; and common sense maintenance.

Computer-aided disposition of the reserve of spare parts

Reserves of spare parts are inventories of spare parts earmarked for specific purposes and for specific equipment with the aim of making these spare parts available without delay to the maintenance department in case of need. There are some characteristics of these reserves and some principles of its disposition. Based on this knowledge a computer aided disposition was designed including the following functions: modification service and determination of standard stock, stocking, stock availability checking, supervision of stocks, and ordering and contract treatment.

CIM includes the experimental shop

Integration of computers in the manufacturing process has rightfully emphasized their use in electronically conveying complex product geometry from engineering design and drafting to the design of manufacturing fixtures and part programming. The relative absence of literature and software relating to the use of micro-computers in the Experimental (prototype) Shop suggests that at best, their usage is limited and at worst, not amenable to very small lot size production quantities. Experience with a trial program suggests the contrary. While the project described in this paper is far from a full implementation, early results suggest that micro-computers can be effectively use to: 1. 1) Improve communications between the designer and the shop. 2. 2) Assist the shop in purchasing, process planning, and control of spare part inventories. Also included in the paper is an overview of the software as contrasted with conventional high volume production planning and inventory control systems to emphasize the fundamental differences in functional usage. The paper concludes with a discussion of future extensions to provide networking and graphic capabilities that shows promise of improving the feedback loop to Engineering Design and Manufacturing.

Requirements and Design for a Distributed Computerized System for Safety and Control Applications

The major functions and architectures of Computer Based Protection and Control Systems for Nuclear Power Plants are designed nowadays taking into account the following basic ideas:•defense in depth. That is independency, redundancy and diversity. To provide several levels of defense so that failures in equipments and mistakes by people will be covered;•distributability, modularity and flexibility. To cut down the construction costs, provide significant installation time saving and reduce spare part inventory;•fault tolerance, self diagnosis and graceful degradation. To face faults, errors and other anomalous or unexpected behaviours and give practically one hundred percent availability.The functions and the architectures presented in the paper, related to the development of distributed microcomputer based Protection and Control Systems for application to Nuclear Power Plants, are especially tailored for the Italian plants. The project, which is under the responsibility of WESTINGHOUSE, has the participation of various Italian organisations, led by ANSALDO S.p.A./Div. NIRA.

Computerized Shipboard Inventory Management: The STIMS Project

Shipboard management of spare parts inventory has historically been labor intensive, ill-defined, and poorly managed. The authors' company has contracted with the Maritime Administration to create a shipboard system encompassing inventory management and requisitioning of spare parts. The system has been developed in such a manner that it is easy to manage, and can be easily adopted by other maritime corporations. The result of this project will provide significantly improved management of shipboard inventory, with a resultant decrease in vessel operating expenses.

Maintenance information system for Wakayama Steel Works, Sumitomo Metal Industries, Ltd.

Wakayama Steel Works, Sumitomo Metal Industries, Ltd., developed the “On-line Maintenance Information Control System (MICS)” in Oct., 1980. The real time information of maintenance work planning, plant histories, spare parts inventories, etc., available from this computer system made more effective maintenance possible.This paper presented explains how the system was developed and the results of its application.

Aufgaben, Leistungen und Ziele der Instandhaltung in der chemischen Industrie

AbstractDuties, performance, and objectives of maintenance services in the chemical industry. In the West German chemical industry, about DM 5000 million will be spent on maintenance in 1979. This figure is only slightly less than the amount to be spent on reserch or capital investment. The expenditure ensures peak performance from production installations and the infrastructure as a whole and a high level of plant safety. Increasing costs and reduced earnings demand greater efforts on the part of all maintenance services. The remedy in the past lay in preventive maintenance, but much higher targets are being set today: planning of easily maintainable plants, early recognition of damage; rationalisation of maintenance techniques; work preparation and scheduling; quality control; integration of spare parts inventories; standardisation, etc. The difficult task for the future will be to find solutions to the rising labour costs and various human problems.

An Application of Classical Inventory Analysis to a Spare Parts Inventory

The maintenance of adequate spare parts inventories to insure continuous operation of capital intensive manufacturing facilities is an important objective for a practicing manager. In this application project, classical ABC analysis was used to analyze a spare parts inventory of a small but highly automated manufacturing facility in an effort to obtain better inventory control. The results have been implemented and have resulted in operating improvements.

Economic considerations in the use of carrier- onboard-delivery aircraft.

The cost of any logistic supply system must be related to its ability to perform its mission-—supporting combat forces. The cost of a logistic supply system supporting carrier tactical aircraft can be expressed in terms of aircraft availability (or readiness) on the carrier and inventory savings within the supply system itself. Aircraft availability significantly improves when delivery time to the carrier of repairable spare parts is improved. Associated with this improvement in delivery time are the savings gained through smaller inventories of repairable spare parts, particularly aircraft engines and avionic components. A cost-effectiveness methodology for determining the net value of increased effectiveness per aircraft carrier receiving high-speed logistic support by Carrier-Onboard-Delivery (COD) aircraft is presented herein. This net value, the gross value of a given improvement minus the cost of obtaining that improvement, is shown to be many times the cost per carrier of the COD system itself, and represents the potential savings per aircraft carrier made possible by improving delivery time to the carrier of critical, repairable spare parts.

Dynamics of Two Classes of Continuous-Review Inventory Systems

The classes of inventory systems studied in this paper involve random, captive demand and assume continuous review of inventory and replenishment of stock in lots of size Q. The replenishment doctrine is to initiate an order for Q items whenever the sum of stock on hand and stock on order falls below a pre-determined level R. Possible examples are inventories of spare parts for maintenance, of military supplies, or of merchandising stock, so costs of purchase, of storage, and of backordenng are included in the measures of effectiveness. A general relation, between cost of back-orders and minimal-cost probability of stock-out, is derived, similar to that reported earlier [Morse, P. M. 1959. Solution of a class of discrete-time inventory problems. Opns Res. 7 67–78.] for discrete-time systems. For the first class of system studied, demands arrive at random, with a stationary probability distribution of arbitrary form, and all replenishment times are of the same length. For the second class, demand arrivals are Poisson and replenishment times are distributed exponentially. Exact solutions, together with expressions for expected values of operating cost, probability of stock-out, Pout, of stock on hand, etc., are obtained for both classes of system. For the first class, specific formulas are given for the frequently-encountered cases of Poisson and stuttering Poisson demand arrivals. An asymptotic form for these solutions is obtained, valid for both classes of system over the range of parameters of practical interest. In terms of this asymptotic formulation, equations, tables, and graphs are given, from which the re-order level R and replenishment lot size Q can be determined for minimal cost and/or for a pre-set value of Pout, or to satisfy other managerial requirements. For Poisson demand, comparison between the two systems shows that when Q is small, increase in variance of replenishment time makes very little difference in the requirements for R, but when Q is large an increase in variance of replenishment time requires an increase in the value of R, the re-order level, to maintain the optimality of the solution.