MRO Spare Parts and Storeroom Management

6th Discipline of World Class Maintenance Management

Objective Of this Course :

Understand the concept and importance of having a Spare Parts Management in place in your plant

Understand the benefits that can be derived on having a spare parts management strategy in your plant Make sound decisions on whether or not to stock or not to stock an item in the storeroom
Provide a basic understanding on the 12 Disciplines of Maintenance Management

Understand the real focus of a true & meaningful Maintenance Management Structure

MRO Spare Parts Management

Spare Parts Management Modules Include :

Module 1 : Common Problems on Spare Parts Management
Common Problems on Spare Parts Survey on Top Problems on Spare Parts Role of Spare Parts Management Who Should Manage the Storeroom

Module 5 : To Stock or Not To Stock

Factors To Consider whether To Stock or not To Stock or Not Decision Tree Diagram

Module 6 : Economic Order Quantity (EOQ)

Minimum and Maximum Purchasing Cost and Carrying Cost Economic Order Quantity Explained Reflections On MRO Spare Parts and Storeroom Management

Module 2 : Storeroom Layout and Improvement

Minimum requirements for a Storeroom Choices for Parts Storage Plants with Existing Storeroom

Module 3 : Inventory Control Procedures

Types of Inventories MRO Inventory Analysis and Classification Fast, Slow and Non-Moving parts Classification of Parts Held in Stock MRO Parts Catalog and Parts Codification

Module 4 : Lead Time to Order

Reducing The Lead Time to Order

Spare Parts Workshop

Determine if fast, slow, non-moving or obsolete

MODULE 1

COMMON PROBLEMS ON SPARE PARTS MANAGEMENT

WE ALWAYS KEEP A STOCK OF SOMETHING JUST IN CASE

BULBS/ FLORECENT Just in case one of the bulbs in our house gets busted

FUSE Just in case one of the fuse gets busted

SPARE TIRE Just in case your car encounter a flat tire

GROCERIES Food, Soap, Toothpaste, etc.,

BATTERIES Just in case we might need it someday

CLOTHES Since we use them regularly

SHOES We wear different shoes depending on our activities

FLASHLIGHT Just in case the lights went out

UNDERWEAR For human hygiene hence, we replace daily

COMMON PROBLEMS ON SPARE PARTS

But in plants and industries it is a bit more complicated parts to keep in stock may range from 10,000 for a small industry to more than 150,000 for a large plant Almost all industries have a storeroom to keep parts of their equipment they need from time to time but not all these industries have the knowledge or know how to manage their storeroom and spare parts. In fact the Storeroom and Spare Parts is one of the functions on where maintenance can save on cost And almost every industry have a horrible story to tell on their storeroom that they have experience And most of the problems we encounter on our spare parts and storeroom are man-made. Therefore, if man himself created the problem, then let him find ways to solve their storeroom problems

But first, let us hear the problems

COMMON PROBLEMS ON SPARE PARTS

In a reactive industry spare parts are defined as those parts available in plenty when not needed and not available when they needed it most Survey indicates that 60 to 80% of maintenance expenditure is accounted by spare parts consumption in industries

Many organizations admit that spare part and storeroom function is one of the most neglected functions in an industry
If a machine fails and the part is not available in the storeroom as expected maintenance have 2 options. Option 1 they cannibalize idle equipment and get the part they needed or Option 2 they result to emergency buying and buy in excess and keep the part near them on the assumption just in case it might fail again

COMMON PROBLEMS ON SPARE PARTS

Morning come Storekeeper said, Big rats again in the evening and so life goes on . . . Parts are retrieve during nigh time but no transaction and records have been done One maintenance manage to have a spare key and everyone has access to storeroom Night time occurs storekeeper decide to call it the night and goes home

START HERE
Equipment fails and maintenance check part in the storeroom Storekeeper check the part. Item exists in the system but not physically there

Maintenance cash advance and buy parts outside and keep spare w/ him

Are We Not All Part of the Problem ?

Storekeeper email management for the n time for additional manpower

Time for storekeeper to go home but still he extend himself for couple of hours

As usual storekeeper request again fell on deaf ears on management

Operations call the storekeeper again blame everything on him

HORRIBLE TRUE STORY CASES ON SPARE PARTS

Narrator : You notice an unusual noise
in the engine and based on experience, the noise comes from a bearing that is almost gone. You raise a notification for the bearing to be change in order not to allow the entire unit to go down because if it goes down, then management might think that you are sabotaging the company. You provided an instruction for the bearing to be greased pending the arrival of the new one. As long as the greased bearing is still working, no attention will be given to your notification of a new order of bearing, and PM of the equipment. Finally as expected machine fails and the entire plant is down and in darkness. This is a story of a diesel generator that had been shouting for a complete overhaul
The gas generator came down on broken fan blade. The stand by diesel generator was started but it could not carry the load because the rings were gone and it was smoking heavily. Hmm seems like bearing needs to be replaced

HORRIBLE TRUE STORY CASES ON SPARE PARTS

Operations Manager : Why did this machine
fail and how much time will it take you to repair this one ?

Humble Maintenance : I have raised several

emails and memos for this machine to undergo a thorough PM and overhaul but . . . . .

Narrator : Operations interrupted the humble

maintenance and said . . . . .

Operations Manager : You talk too much, I am

asking you a simple question how much time will It take you to repair this machine ?

Humble Maintenance : Give me a couple of hours Narrator : And so the operations manager went away and you started to repair the
generator. The unit was started but went down again after 2 hours and this time it was because of the fan belt. You check the system for the part number and this might be your lucky day because there were 2 belts in the system so you rush to the store to requisition for the fan belt but the storekeeper is taking too long to find the belt and after 30 minutes, he went back to you and said.

HORRIBLE TRUE STORY ON SPARE PARTS

Storekeeper : Sorry no more belts Humble Maintenance : But you have 2 more
belts in the system

Storekeeper : Do not believe everything you

see on the system

Narrator : You are now under pressure, generator is still down and the entire field was in darkness and finally you went to your maintenance superintendent

Humble Maintenance : Boss, I just went to the

store to request for the belt but it was not there physically but in the system there were 2 pieces.

Narrator : The boss called the storeroom and

told the storekeeper to check his inventory and system but the storekeeper calmly said to him Storekeeper : Give me more men and I will do as you please

Superintendent : You make some cash advance and purchase the belt outside, do
not come back if you do not have the belt

HORRIBLE TRUE STORY ON SPARE PARTS

Narrator : You went outside and found an auto parts shop
and luckily they have the belt you were looking for and so you purchase it. You went back to the plant and replace the belts with the one you purchase and you started to replace the belts, after an hour you started the generator and the lights were back ones again. After completing the repair, the superintendent called you in his office. In your mind you are thinking that your boss will praise you for saving the day. With all the sweat and dirt you entered his office and he said

You talk too much...

Superintendent : Why is the physical inventory and

system inventory do not match ?

Humble Maintenance : This should not happen if my email and memo were
approved to have the main generator for a complete PM and Overhaul

Superintendent : The problem with you is that you talk too much, I am asking you
a simple question. Anyway try to make sure that this does not happen again

Narrator : And so life goes on. This is a simple story on some of the day to day
pressures on the life of a humble maintenance.

COMMON PROBLEMS ON SPARE PARTS

1) Disorganized storeroom & time to get parts in the storeroom eat too much time on the maintenance
The industries seems to develop their Storeroom on a hit and miss fashion. If the equipment would fail and if the part is unavailable in the storeroom they will usually purchase in excess quantities & were kept by the maintenance themselves, because they have lost their trust in the storeroom. One of the main cause of interrupted maintenance work in industry is the lack of needed spare parts. In some cases, spares were not identified in advance or they ran out of stock when it was needed. Worst is that the storekeeper simply cannot locate the parts in the storeroom since everyone have access to the storeroom during peek hours

If you want to improve the housekeeping of your Storeroom, just go to a supermarket and you will have some idea on how to start with . . .

COMMON PROBLEMS ON SPARE PARTS

2) Everyone access to the storeroom during peak hours because their storeroom is from 9 to 5 pm
The saying that Honesty is the Best Policy does not Apply to Spare Parts and Storeroom. The storekeeper should be in control on what comes in and goes out of his storeroom. In short, in Spare Parts, you need to apply the golden rule which is TRUST NO ONE

This is one of the reasons why the physical inventory and system do not match.

Management and Decision Makers must understand that if their operations is 24 hours or 3 shifts then the storeroom should also be in 3 shifts. trust and honesty system do not apply in Spare Parts Management

COMMON PROBLEMS ON SPARE PARTS

3) No Record Of The Transaction
Since the part is needed ASAP, front line employees and maintenance people will be in a rush to acquire the item and will not be inclined to fill up the paper work. This usually happens when the storeroom keeper completed his day work and leave the storeroom key to the guard on duty. Two problems will be evident in this situation First, expect your inventory to be lower than what is actually listed on the system Second, there is a strong temptation for maintenance to store the part elsewhere in the plant, near their equipment or even in their home for personal use

All items, parts that go out of the storeroom should always have a record as this will be the basis on what parts needs to be stored and reordered. If there is no control on the parts that goes out of the storeroom, then expect parts to be unavailable when needed

COMMON PROBLEMS ON SPARE PARTS

4) Physical Inventory and System Inventory Do Not Match
If the actual inventory is lower than the system record, then the risk is high that an out-of-stock condition can occur because parts will not be ordered on-time.
If the actual inventory is higher than the system record, then parts will be flagged for re-ordering by the system even if not needed.

It is critically important that not only the storeroom people should understand the importance of inventory accuracy but also its users, if inventory do not match the system, then the users will loss their confidence and start stocking parts on their own

COMMON PROBLEMS ON SPARE PARTS

5) Same Part But Different Part Number
Part Number : 260893 Mini ball Valve, two way, tube size 1/4 comp, brass, 2500 LB, Parker 4AMB4LPFABP $71.37

A part can be reordered because some department may need them without knowing that there can be some alternative parts that can be used in the storeroom

Part Number : 176011 VALVE, BALL, 1/4 IN TUBING CONN, 2500 PSIG, LEVER HANDLE $36.14

Part Number : 465390 1/4 Ball Vlv; Boiler O2 control; Alstom Dwg 5a9555252 260893, $49.50

Part Number : 122062 2-WAY BALL VALVE, BRASS, 1/4 INCH, 2500 PSI VALTORC 7452 $88.00

Same part can have different part numbers because they came from different vendors or the part may have some very slight differences. Part number should remain consistent or alternative part number can be provided but should reflect on the CMMS

COMMON PROBLEMS ON SPARE PARTS

6) Large Quantities of Obsolete Parts In the Storeroom
Oftentimes, there are many parts held in storage that do not belong to any equipment in the facility since it had already been decommission. The equipment in the facility may be retired and no longer in site, yet, the parts of that equipment are still in the storeroom. And worst, storeroom personnel may still be ordering the obsolete parts Another reason why the part becomes obsolete is that the shelf life of the part had already been reached

When an equipment is retired, the spares associated with it must be identified so that they can be freed from the storeroom, this will free up space, storing obsolete items cost money and space in the storeroom. A plant can terminate plans to expand their storeroom by freeing up space consumed by obsolete parts

COMMON PROBLEMS ON SPARE PARTS

7) Equipment Vendor Is No Longer Around

The machine you have been using had been around for more than 15 years and the vendor may no longer be producing the parts you required or worst the vendor is no longer around and had shifted to other business
Due to technology and advancement most of the parts on the equipment had already been modified by the vendor and no longer using the old spare parts in your equipment

Decision on whether to continue running this equipment or retire it by conducting some economic and feasibility study would be appropriate for this situation. If the decision is to allow the equipment to still run then parts that frequently failed in this equipment should be identified and trying to source other vendors that can fabricate the part

COMMON PROBLEMS ON SPARE PARTS

8) Emergency Buying and Keeping Excess Parts In Maintenance Secret Hiding Places
When the machine fails and the part is not in the storeroom and needs to be purchase immediately, there are many cases where a dozen of these parts is ordered for fear that the failure can happen again in the future. The excess parts where kept at maintenance secret hiding place and Joe is the only guy that knows this place and is an eight to five maintenance person.

The same part fails in the evening when Joe was no longer around, and since the storeroom has no record of the part, it was again purchase the following day and now Steve kept the rest in his own secret hiding place

To start a Storeroom Improvement Strategy is to surrender all the parts that you store independently and putting your trust again at the storeroom

COMMON PROBLEMS ON SPARE PARTS

9) Low Quality of Parts, Purchasing Always Go For The Lowest Bidder There is a tendency to reduce costs by buying parts with the lowest possible cost. Reducing costs and improving reliability are not the same, in fact there are cases when reducing costs will affect the reliability of the machine If we want to save on cost, we should focus not on the initial cost but on the Life Cycle Cost of the component. This is where a true and meaningful savings can be realize on maintenance

Every maintenance should focus on improving reliability and not on reducing cost WHY? because if reliability starts to improve then cost will definitely go down, it cannot be the other way around. Remember that there will be times that reducing cost will affect reliability. Having a low maintenance cost is always a consequence of good maintenance practice . . . .

COMMON PROBLEMS ON SPARE PARTS

10) Maintenance do not know the code of the part and takes too long to retrieve the part in the storeroom Numbering the part or spare should make life easier for the users to retrieve the part at the storeroom but since the person who devise the part numbering is no longer around the plant and details on how he determine the part number is unknown idle time in acquiring the part is lengthen together with the machine downtime

Because of this everyone is developing their own numbering system which creates duplication of parts in the long run

Assigning part numbering or codification for every spare or part in the storeroom should be left to the storeroom people and should be done by a single individual or by a group

COMMON PROBLEMS ON SPARE PARTS

11) Large Amount of Non-Moving Parts In the Storeroom

When the equipment was commissioned 5 years ago. The vendor told us to stock some critical parts of this asset. These parts have not yet moved for the last 5 yrs Stocking critical parts as recommended will always be a debatable issue but the best approach on making decisions on whether to stock or not to stock this part will be best answered if maintenance and reliability people have an algorithm or Decision Diagram

Performing an ABC Analysis shows that 70 to 80% of the total cost your inventories will come not from the fast moving items but from those non-moving items. These parts are big as well as their cost

COMMON PROBLEMS ON SPARE PARTS

12) MRO Spare Parts is Not Manage By Maintenance
The storeroom can contain a lot of items from office supplies, janitorial services, not only spares, raw materials and MRO parts. We at Finance and Accounting take care of the financial and funds of the company so we are in the best position to manage the storeroom We at Purchasing are the ones in direct contact with the vendors so I think that we are in the best position to manage the storeroom We at Maintenance are the users and know the parts very well, we should be given the chance to manage the MRO Storeroom and spare parts The best people to manage the storeroom for MRO parts and all spares, items used in the storeroom are maintenance people

Maintenance people know the parts better than any department and real savings can be generated if MRO parts and spares in the storeroom are manage by the Maintenance Department

OFTENTIMES THE PROBLEM IS MERELY COMMUNICATION

Finance

Storekeeper
I am just a one man team here

Maintenance

All I care is how to reduce cost on everything and blames the storeroom for inaccurate inventory

Improving the Storeroom is not only the responsibility of the Storeroom but by every one in the organization itself
Purchasing Operations

We just comply to management on what machines to retire and we dont trust our storeroom because we do not control them so we keep parts ourselves

To comply with Finance we always go for the lowest bidder and in the end giving our maintenance people problem on the part

We always blame and pressure maintenance when the equipment is down. That is our only excuse for not meeting our production for the day

Survey On Top Problems on Spare Parts

1) Disorganized storeroom and time to get the parts eat too much time for the maintenance
2) Everyone access to the storeroom during peak hours because the storekeeper is from 8:00 am to 5:00 pm 3) No record of the transaction was done. Maintenance just get parts and leave especially during peak hours 4) Physical inventory and system inventory do not much 5) Same part with different part number 6) Large quantities of obsolete parts in the storeroom 7) Equipment vendor is no longer around. No idea were to get this spare part 8) Emergency buying and keeping excess parts in maintenance secret hiding places

0 0

0 0 0 0 0
0 0

9) Low quality of spare because purchasing always go for the lowest bidder
10) Maintenance do not know the part number of the part and takes too long to retrieve 11) Large Amounts Of Non-Moving Parts in the Storeroom 12) MRO Spare Parts is Not Manage By Maintenance

0 0 0

0 0 0 0 0 0 0 0 0 0 0 0

SPARE PARTS MANAGEMENT EXPLAINED

When a machine fails, it is mostly caused by a part that fails to fulfill its function. Mechanical parts wear and needs to be replaced and what is important is to keep the downtime to a minimum. A storeroom is a place to store parts that we need to keep our equipment running.

But managing spare parts simply means how fast we can response in acquiring the right part during the time when maintenance and operations needed them most

SPARE PARTS MANAGEMENT EXPLAINED

Spare Part is define as a part of a machine ready to replace an identical part of it, if it becomes faulty. It is also defined as those parts of the machines which are kept on standby to be substituted when a part of a machinery breaks down or worn out

When a part is not around when an equipment is in a failed state, downtime increase, operations are pissed off while maintenance lose their trust on their storeroom

WHY SPARE PARTS IS NEEDED

A good Spare Parts Management system ensures the right parts gets to the right place at the right time

SPARE PARTS
Emergency Breakdown and Repairs Preventive Maintenance Scheduled Parts Replacement

Predictive Maintenance Potential Failure Detected

Quality and Safety Audit and Compliance

SPARE PARTS MANAGEMENT

Spare parts refer to the part requirements for keeping ones owned equipment in healthy operating condition by meeting repair and replacement needs imposed upon by breakdowns, Preventive and Predictive Maintenance as well as safety and quality audits

Spare Parts Management has 3 Goals

To have the item that is needed To supply that item quickly when it is needed To control the overall cost of keeping the items in stock
We simply cannot stock everything. The requirements to balance keeping the parts in inventory with the need to control spending is the reason it is important to have a clear, rational and a well understood policy on Spare Parts

WHY SPARE PARTS IS NEEDED

The main user of the Spare Parts or Storeroom is the maintenance. Spare Parts Management is also often called Storeroom Management, or Maintenance Material Management A Good Spare Parts Management Includes
Balance quality and price Purchasing parts in the correct quantity Receiving parts at the correct optimum time
This hammer cost USD 500 because this hammer had passed rigid testing government standards, but this hammer can be purchased at $ 25.00 at a local hardware store

Problem with most industries is that when a breakdown occurs and the part in unavailable. The maintenance is pressured to fix the equipment and get the parts any way possible either by purchasing them outside or cannibalizing other equipment
ROLE OF SPARE PARTS IS TO PROVIDE PARTS QUICKLY WHEN NEEDED

SPARE PARTS MANAGEMENT SURVEY QUESTION

Is your current industry, whom do you think manages your spare parts storeroom ?
A) Purchasing Department because they are the ones who purchase the parts B) Accounting Department because they control the finances of the company C) Safety Department

D) Maintenance Department because they are the users of the Spare Parts items E) I do not know who is in charge of the Storeroom

Write the letter in a 1/8 piece of paper, and submit to the facilitator. The result of the survey will be sum up and given as a percentage of the class. Answer as honest as you can.

WHO SHOULD MANAGE THE SPARE PARTS DEPARTMENT

PURCHASING

ACCOUNTING MAINTENANCE

These are the people directly involved with the vendors and make the calls. They can maintain the integrity of supplier and customer relationship with no favoritism among vendors

They note that proper stores inventory control is important. They manage the finances of the company and an audit might reduce the tendency for corruption to take place during transaction on vendors

These are the humble users of the store. They know the parts and what parts work best for their equipment. They know which part keeps on failing as well as the lifecycle of parts they replace frequently

WHO SHOULD MANAGE THE SPARE PARTS DEPARTMENT

Because most material transactions involved maintenance parts, materials management and storeroom people should report to the Maintenance Department If Storeroom people and materials management report to other functions such as Purchasing or Finance, there is a greater possibility that the objectives will not be aligned with those of both operations and maintenance The functions of purchasing and inventory management should be separated because the skills required to be a good purchaser (negotiator) is different from the skills that is required to be a good inventory manager

WHO SHOULD MANAGE THE SPARE PARTS DEPARTMENT

Maintenance people are the real customers
of a MRO Storeroom, hence they should be the ones to manage the spare parts

The largest and most common de-motivator of maintenance are waiting for the materials and worst if the parts are not in the storeroom when they needed it most Since the part is not around when needed maintenance try to make a Mc Guyver move which they know is not right for the job. They do this because there is pressure from the operations people to keep the equipment running at all cost
In short maintenance people try to cannibalize some parts from idle equipment just to make the equipment run and this had been part of their day to day lives

VALUE OF SPARE PARTS MANAGEMENT

DOWNTIME

EQUIPMENT STOPS

Find technician who can repair it

Diagnose the fault

Find the spare parts

Repair the fault

Repair time

Revalidate Endorse test run the equipment machine to operator

Downtime means the total amount of time the asset would normally be out of service from the time it fails until it is fully operational

MTTR

Without an organized storeroom, it could take between 0 hrs (if no parts is required) to 4 hours to find the part and if the part is not around and purchase outside might take even 24 hours to reach increasing the downtime of the equipment. If you have around 200 breakdowns a year and a lost production cost of $250.00 per hour and 6 hrs of downtime on average since part is purchased outside

Downtime Savings = 6 hrs x 200 x $ 250.00 / hr Downtime Savings = $ 420,000.00 per year

SPARE PARTS MANAGEMENT

Proper planning and control of spare parts inventory is a critical component of an effective asset management program. If the right parts are not on hand when needed for routine maintenance or repairs, downtime is prolonged. If too many parts are on hand, the company absorbs excessive costs and the overhead of carrying the inventory.

Housekeeping and orderliness in the storeroom is an important part of Spare Parts Management responsibility, as this is critical to the ability to retrieve the correct item quickly to the end user

Importance of Inventory Accuracy

One of the critical success factors for a Spare Parts Management is achieving a high level of inventory accuracy Accurate inventory is defined as the correct part and quantity physically in the storeroom and in the system

Lost of confidence in the storeroom can result in maintenance stocking parts in their cabinets, toolbox, shelves which often result in excessive cost of parts
If the actual inventory is lower than the system recorded, then the risk is high that physically an out of stock condition occurs, while if actual inventory is higher than the system recorded then parts are overstock even when its not needed

Preventive Maintenance Kit Building

One of the functions of the storeroom is to provide parts, tools and supplies for the technicians to perform PM Tasks. It will be a good idea for the spare parts personnel to have access over the PM schedule. PM kits are prepared in advance before the PM schedule starts. This saves time in acquiring the parts to be used for PM activities.

When a PM is scheduled for work, the technician presents the PM work order to the storeroom. The system will show that the inventory has already been picked and is in the kitting hold area. The technician can take the PM kit to the job and the entire process of retrieving all the parts needed for PM

SPARE PARTS TRIVIA QUESTION

F) Freddie Aguilar
E) Elvies Presley

A) Led Zeppelin

Which band sang and composed the song NO SPARE PARTS

D) Rolling Stones

B) The Beatles

C) KISS

MODULE 2

STOREROOM LAYOUT AND IMPROVEMENT

Storeroom must be organized

If you plan to re-arrange your own storeroom, visit some supermarkets and take note of the signs, arrangements and so on making it easy for the consumer to locate the goods they need. There is a place for everything and everything is in place Same concept can be applied for your storeroom. What is important for the storekeeper is how fast can he retrieve the part needed by the maintenance Improving the storeroom is not only the role of the storekeeper but is a collective effort by the whole organization

Storeroom must be organized

Parts must be free from debri & clutter to permit personnel access to parts Locations must be labeled to reduce time to search parts Stepladders, stools & carts must be parked in an area that is out of the main flow Area needs to be separated through walls or cage to discourage theft and to enforce recording of parts receipts/issues for inventory accuracy purposes.

Lighting in the area should be sufficient

Strategic location of parts such as fast moving parts should be located for easy access while slow moving and big items can be located at the back side of the store

SPARE PARTS MANAGEMENT INCLUDES

A spare parts is not just a place to stock parts. It is a place for everything and that everything should be in place. A good spare parts management system must include the following Receipt of incoming spare parts Control of issuance to users Control of parts inventory, min-max Control over defective parts Control of parts under warranty

Quality Control of incoming parts

Proper storage & handling for fast and slow moving parts Parts storage lifespan (due dates) Data reporting, tracking Control of obsolete parts

HOW MUCH SPACE THE STOREROOM REQUIRED

Speaking about the space your storeroom will require depends on many factors such as the number of equipment you operate, number of breakdowns experience on each equipment, bulk of the spare, quantity of items to be stocked based on the maximum and minimum quantities, available space in your plant and so on . . .

MINIMUM REQUIREMENT OF A STOREROOM

General Storage Area
This area is where most of the store items will be kept . It will include open shelving, modular drawer units, some will be hanging on the walls

Issue Counter
This is the place where maintenance or equipment users transact with storeroom keepers on spare parts that they need to retrieve from the storeroom

Receiving Area
This is the area to receive all incoming spare parts and reconcile packing slips with the purchase order. Forklift movement is often required here

Office Area
An office is required for keeping store records and provides a central area for storeroom computer and CMMS. should be air-conditioned. Contains telephone, computer, fax, photocopier

MINIMUM REQUIREMENT OF A STOREROOM

Pallete Storage Area
This area contains large items such as motors pumps, gearboxes. These items are usually Stored in pallet racks and forklift access or lifter is required in this area

Temporary Storage Area

This is the place to temporarily store parts that are defective, damaged or incorrect parts that needs to be returned back to the vendor or supplier

Bulk Storage Area

These will be large volume but light weight items such as pipe insulation paper products will be stored in this place or area

Self-Service Area
Other spare parts storeroom provides Self-service area for inexpensive parts That can be made available to maintenance such as blots, nails, small valves

STOREROOM FLOOR PLAN

4 ft wide by 8 ft long Pallet Rack Storage Area Roll-up door
8 ft

Temporary Storage Area for new deliveries File Cabinet and Catalog Shelves
Desk 1

Receiving Area Hallway - Aisle Storeroom Personnel

Accepting Deliveries

Desk 2

Door Door
34 ft

Modular Drawer Units with Bins

Floor Tape Applicator

Modular Drawer Units with Bins

Modular Drawer Units with Bins

Pigeonhole Unit Wall Storage Area

34 ft

STOREROOM IMPROVEMENT
Using Mezzanines If your storeroom space is limited, and you have way too many spares to stock, one way to increase storage area will be to use a second floor called mezzanine. Mezzanine structures can only be made practical with a minimum of 20 feet of ceiling height

STOREROOM IMPROVEMENT
Using Mezzanines Mezzanines should not be an excuse for stocking obsolete parts. Our goal will be to stock only parts that are needed to keep equipment downtime to a minimum. Heavy parts should be stock on the ground level while parts that can be hand carry can be stock at the mezzanine floor.

CHOICE FOR PARTS STORAGE

Bin Boxes This would be ideal for low usage and lightweight parts. Can be made from corrugated boxes to plastic and can be purchase on different sizes. Bin boxes can be easily removed and relocated to other locations. Ideal for bolts, nuts, washers, nails, fasteners, screws and other small parts in quantity

CHOICE FOR PARTS STORAGE

Open Shelving Cabinets The goal for optimum shelving and bin usage is to maintain at least 80% utilization of the space. These open shelves are ideal for large to moderately heavy items such as valves, hoses, sprockets and small motors for a 24 inch depth open shelve unit

Cost of open shelve cabinets will be less than the modular shelving drawers and some are designed where the height can be adjusted One disadvantage of open shelves is that the depth is not maximized and the part or spare is more prone to dirt and dust

CHOICE FOR PARTS STORAGE

Modular Shelving Cabinets and Drawers More expensive than that of an open shelve cabinet. Standard is around 300 to 600 pound load per shelf.

Modular cabinets are mostly used for small bearings, seals, couplings, bushings, fuses, circuit breakers, gauges, dies, cutting tools etc., Modular shelving is effective in compressing the parts compared to an open shelving cabinet in which mostly the depth of the shelf is most of the time under utilized
Another advantage for modular shelving to open shelve is the part to be stored is less prone to dirt and dust since it is enclosed

CHOICE FOR PARTS STORAGE

Pallet Racks Usually 42 inches deep by 8 feet wide. Around 8 to 10 feet high are used for large heavy items on pallets. Can include motors, pumps, oil lubricant in drums

Area or space for pallet racks storage should allow for forklift movement and maneuvering in order to retrieve these parts and spare

CHOICE FOR PARTS STORAGE

Flammable Fluid Cabinets Usually yellow in color usually used for storing flammable fluids such as paint, gas, aerosol and others. These cabinets must be labeled with flammable as per OSHA requirements

Metal cabinet are usually constructed using 18 gauge sheet iron, double walled with 1.5 inches of air space. Two vent plugs are employed on the sides of the cabinet to remove vapor that can be accumulated overtime. Comply with your safety personnel for proper storage procedures

CHOICE FOR PARTS STORAGE

Cantilevered Storage Racks Vertical / Horizontal Carousel Pigeonhole Shelf

Combination Oven and Modular Drawers Rotary Bins (Rotate)

Drum Racks

PARTS LOCATION IDENTIFICATION SYSTEM

Row Section Shelf Shelf Position Drawer Position Numeric Alphabetic Numeric Alphabetic Numeric

Desk 1

Receiving Area Hallway - Aisle Storeroom Personnel

A location number for a part is often done in alphanumeric fashion. This coding will identify the exact location of the part that needs to be retreived

Desk 2

Door

C C C

D D D

E E E

24 23 22 21

11 A
B

18 17

12 11 10 9 8 7

12 13 14 15 AA AA 2 A B 3 A B BB BB
CC CC 4 A 5 A DD B B B C C C

5
4 3 2 1

16
15 14 13

C
D E

DD

B B
B B

C C
C C

D D
D D

E E
E E

20 19

9 A F 10 A G

6 A 7 A
D E

8 A

TO CENTRALIZE OR DECENTRALIZE THE STOREROOM

The question on whether to centralize or decentralize the storeroom can have both advantages and disadvantages to industries. This will also have something to do with the size of the industry itself. If the industry is very large with a number of departments or the plant is split up and by several kilometers, having a decentralized spare parts system would have some merits and advantage since access to the storeroom would be much easier and quicker.
DEPARTMENT

Centralized Spare Parts Hub

DEPARTMENT

SPARE PARTS
CENTRAL HUB

Access to the storeroom would be much easier and quicker and makes the response time a lot faster. On the other hand, the disadvantage of having a decentralized storeroom is that more people will be needed in the storeroom.
What is important is that whether the storeroom is centralized or not, the inventory in the system and its physical quantity should always be the same

DEPARTMENT

DEPARTMENT

PLANTS WITH EXISTING STOREROOM

The goal of storeroom and spare parts is to provide the right part at the right time when it is needed. This can only be done if the storeroom have control on the parts they issue to their customers. In this case these are the operators and maintenance people.

Therefore, the first step in the change process for any organization that would like to benefit on their storeroom is for the maintenance to surrender all parts that they stock in their shelves, toolbox and secret hiding place or their home

PLANTS WITH EXISTING STOREROOM

40% to 50% of all Maintenance departments have an open storeroom, where the honor system is in effect.
If the plant is operating for 24 hours and 3 shifts, the storeroom and the people in the storeroom should also be manned for 24 hours and 3 shifts There is a temptation to keep parts in maintenance secret hiding places ones the storeroom is open during peak because they know that the inventory and system will never match
It is impossible to have an accurate inventory both physically and on the system if everyone can access the storeroom Many plant think that they are saving money by assigning one person on the store and working on an 8 hour basis. What they dont realize is that savings from the storeroom can only occur if all parts that goes in and out is being controlled by the storekeeper

PLANTS WITH EXISTING STOREROOM

Parts must be free from debri & clutter to permit personnel access to parts Locations must be labeled to reduce time to search parts Stepladders, stools & carts must be parked in an area that is out of the main flow Area needs to be separated through walls or cage to discourage theft and to enforce recording of parts receipts/issues for inventory accuracy purposes.

Lighting in the area should be sufficient

Strategic location of parts such as fast moving parts should be located for easy access while slow moving and big items can be located at the back side of the store

CASE STUDY : ATP SPARE PARTS SYSTEM AND CONTROL

CURRENT DIFFICULTIES AND PROBLEMS ON SPARE PARTS

Induce more machine downtime due to long waiting time to replace because it took a long time to locate the part

Induce more machine downtime due to long waiting time to replace because it took a long time to locate the part Abstract cabinet withdrawal monitoring sheet is generic and not classified as to the type of spares
Poor spare parts management due to incomplete and not properly labeled bins and no specific location of parts defined some small parts change location from time to time making it difficult to locate the part Other spares are kept on other areas unknown which caused unneeded orderings

These are just some of the problems detailed by the team so they finally decided to improve their current spare parts. This initiative was part of their TPM Planned Maintenance activities

CASE STUDY : ATP SPARE PARTS SYSTEM AND CONTROL

As part of our TPM Activities, we piloted one station TQFP EOL to improve their spare parts system with the aid of a simple roadmap we developed

SPARE PARTS CONTROL SYSTEM

AREA : 5 LEADER : Roding Managuit Sa Planned Maintenance, Isang Misyon, Isang Direksyon pa rin . . . . . Teamname

OBJECTIVE : To improve the existing Spare Parts System and save on inventory costs of spares
NO. 1 2 3 4 5 6 7 8 ACTIVITY DESCRIPTION
Define current flow of existing Spare Parts System in your division Prepare inventory lists of all your spare parts in your cabinet with corresponding cost & Total Provide a graph showing the overall inventory costs with specific details on per classification Re-organize spare parts cabinet and provide specific labels, part no. location & Other details Prepare an index card per item / per description to monitor withdrawal of spare parts Prepare necessary Visual Control on New Spare Parts system for teaching purposes Prepare new flow chart for the new system and disseminate through OPL to all involved Monitor trend on Spare Parts Inventory on a Monthly Basis ---Prov ide graph in inv entory costs

Code
----

FORMS USED
Provide Flow chart of activities Spare Parts Inventory Lists
Prov ide graph in inv entory costs

WW
Plan Actual

26

27

28

29

30

31

32

33

34

35

Remarks

SP-02

Plan Actual

----

Plan Actual

----

Before and After Pictures Sample only for reference

Visual Control of Actual Worn-Out Parts

Plan Actual

----

Plan Actual

----

Plan Actual Plan Actual Plan Actual

----

One Point Lesson

ITEM Equipment Used Brief Description

COMPLETE PART's DESCRIPTION

ATP Item Code

Part Number

Quantity CLASS D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D

LOCATION
SPECIFIC

Spares Movement
Fast Slow

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF001 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 Anam/TQAF002 HANMI/TQHF001 HANMI/TQHF001 HANMI/TQHF001

DIE DIE DIE DIE DIE PUNCH DIE PUNCH PUNCH PUNCH PAD DIE DIE PUNCH PAD DIE DIE DIE DIE DIE DIE PUNCH PAD DIE PUNCH PUNCH DIE DIE PUNCH PAD DIE PAD PUNCH DIE DIE PAD DIE DIE DIE DIE PUNCH PAD PUNCH PUNCH DIE DIE

BACK TO LIST OF SPARE PARTS PREFORM DIE W/DFC, 7X7 1.0T CAM FORM DIE W/DFC, 7X7 1.0T L/L CUT DIE A, 7X7 1.0T L/L CUT DIE B, 7X7 1.0T L/L CUT DIE C, 7X7 1.0T L/L CUT PUNCH, 7X7 1.0T L/L CUT DIE PAD, 7X7 1.0T CAM PUNCH GUIDE, 7X7 1.0T C/T PREFORM PUNCH "A" W/DFC, 7X7 1.0T C/T PREFORM PUNCH "B" W/DFC, 7X7 1.0T C/T& PREFORM PUNCH PAD, 7X7 1.0T CORNER TRIM DIE"A", 7X7 1.0T CORNER TRIM DIE"B", 7X7 1.0T CAM FORM PUNCH W/DFC, 7X7 1.0T CAM FORM PUNCH PAD, 7X7 1.0T SINGULATION DIE, 7X7 1.0T PREFORM DIE W/DFC, 7X7 1.4T CAM FORM DIE W/DFC, 7X7 1.4T L/L CUT DIE "A", 7X7 1.4T L/L CUT DIE "B", 7X7 1.4T L/L CUT DIE"C", 7X7 1.4T L/L CUT PUNCH, 7X7 1.4T L/L CUT DIE PAD, 7X7 1.4T CAM FORM DIE W/DFC,14X14 1.0T CAM FORM PUNCH W/DFC, 14X14 1.0T CAM PUNCH GUIDE, 14X14 1.0T CORNER TRIM DIE A, 14X14 1.0T CORNER TRIM DIE B, 14X14 1.0T C/T PREFORM PUNCH W/DFC, 14X14 1.0T C/T & PREFORM PUNCH PAD, 14X14 1.0T L/L CUT DIE, 14X14 1.0T L/L CUT DIE PAD, 14X14 1.0T L/L CUT PUNCH, 14X14 1.0T PREFORM DIE W/DFC, 14X14 1.0T SINGULATION DIE (64/100/120), 14X14 1.0T CAM FORM PUNCH PAD, 14X14 1.0T SINGULATION DIE (80/128), 14X14 1.0T PREFORM DIE W/DFC, 14X14 1.4T CAM FORM DIE W/DFC, 14X14 1.4T L/L CUT DIE, 14X14 1.4T L/L CUT PUNCH, 14X14 1.4T L/L CUT DIE PAD, 14X14 1.4T CAM PUNCH GUIDE, 14X14 1.4T CAM FORM PUNCH,20X20 TQFP CAM FORM DIE,20X20 TQFP CORNER TRIM DIE, 20X20 TQFP

Stock (Put Letter) CABINET 201279460 201279461 201277809 201277810 201277811 201277812 201277813 201277797 201279462 201279463 201277800 201277801 201277802 201277803 201277804 201277805 201279465 201279466 201277792 201277793 201277794 201277795 201277796 201279473 201279474 201277837 201277845 201277846 201279475 201277847 201277848 201277849 201277839 201279476 201277840 201277841 201277842 201279477 201279478 201277831 201277832 201277833 201277834 201283283 201283284 201283285 ETKH0001 ETKH0002 ETKH0003 ETKH0004 ETKH0005 ETKH0006 ETKH0007 ETKH0008 ETKH0009 ETKH0010 ETKH0011 ETKH0012 ETKH0013 ETKH0014 ETKH0015 ETKH0016 ETKI0001 ETKI0002 ETKI0003 ETKI0004 ETKI0005 ETKI0006 ETKI0007 ETKJ0001 ETKJ0002 ETKJ0003 ETKJ0005 ETKJ0006 ETKJ0007 ETKJ0008 ETKJ0009 ETKJ0010 ETKJ0011 ETKJ0012 ETKJ0013 ETKJ0014 ETKJ0015 ETKK0001 ETKK0002 ETKK0003 ETKK0004 ETKK0005 ETKK0006 ETKM0001 ETKM0002 ETKM0003

RMS stands for Resource Management System. It is a MESA feature which helps us monitor and control key plant resources such as equipment, tooling, and operators.
User Inputs Employee no. User chooses user type to determine RMS transaction privileges.
User Inputs Resource Name.

The Current status and Event ID are already given by the system. The buttons of all Available RMS transactions will be enabled.

.User clicks button of the desired RMS Transaction.

CASE STUDY : ATP SPARE PARTS SYSTEM AND CONTROL

BENEFITS DERIVED FROM THE NEW SPARE PARTS SYSTEM

Easy to locate the parts as each of the spare parts have a specific location and each of them is labeled properly and arranged accordingly for fast retrieval Each item is being categorized and classified as tooling parts, Fast moving or Priority Parts, General parts, Slow moving or nonmoving parts,
Proper Instructions for handling toolings and returning them

It is hard to monitor the inventory of spares when 5s is not properly done on your spares, now we can monitor the usage of each part and define a min - max level

Because of the system generated, the team educate and teach maintenance on all shifts to comply to the new system and observe proper orderliness and 5s

We have shorter time for locating spare parts due to scheduled Breakdown and PM Schedules, as well as shorter time to repair
Most importantly, we can control our stock on hand of spares so that we can avoid unnecessary stock-up or double ordering

MODULE 3

INVENTORY CONTROL PROCEDURES

TYPES OF INVENTORY

RAW MATERIALS INVENTORY

WORK-IN PROCESS

Raw materials are inventory items that are used in the manufacturer's conversion process to produce components, subassemblies, or finished products.

Work-in-process (WIP) is made up of all the materials, parts (components), assemblies, and subassemblies that are being processed or are waiting to be processed within the system.

TYPES OF INVENTORY

FINISH GOODS INVENTORY

SPARE PARTS INVENTORY

A reflection of the amount of manufactured product in stock that is available for customer purchase. On an income statement, the finished goods inventory is considered an asset to the company

Maintenance, repair, and operating supplies, or MRO goods and spares, are items that are used to support and maintain the equipment used to proDuce the production process and its infrastructure.

MRO INVENTORY ANALYSIS AND CLASSIFICATION

For the successful spare parts management, it is essential to analyze the spare parts inventory based on various characteristics such as frequency of issues, the annual consumption value, the criticality, the lead time and the unit price. Inventory analysis aids selection of policies for selective control. Most commonly used inventory analyses are:

FSN Analysis ABC Analysis VED Analysis SDE Analysis HML Analysis

FSN Analysis stands for Fast moving, Slow moving and Non moving items. This
form of classification identifies the items frequently issued, less frequently issued for use and the items which are not issued for longer period, say, 2 years.

MRO INVENTORY ANALYSIS AND CLASSIFICATION

Fast Moving Items Parts are used regularly Parts are used less than 10x / year Slow Moving Items

Non-Moving Items
Machine is still used but the part is critical and decided to be stocked but had not been used Equipment had already been retired and decommission

Obsolete Items

MRO INVENTORY ANALYSIS AND CLASSIFICATION

Fast Moving Items Also termed as Active Inventory are items that have been identified and used frequently that its future demand can be predicted with good accuracy. If a part, spare or item had been used at least once a month then this can be classified as fast moving item. Samples include :
Smaller spare parts, standard bearings, oil seals gaskets, lubricants, supply items such as rags, gloves, cleaning materials and solvents, consumable parts

Slow Moving Items

Items which are infrequently used, usually less than 10x per year but the demand can still be forecasted with some accuracy. Others also called them Infrequently Used Inventory

MRO INVENTORY ANALYSIS AND CLASSIFICATION

Non-Moving Items Others termed this as Rarely Used Inventory. These are items are difficult to obtain or their lead time to acquire usually take several months others even years either because most of these parts are unavailable or imported from other countries. Most of them where recommended by the OEM to have a stock on the storeroom since the part is classified as critical. Hence, they sit on the storeroom shelves for years untouched. The difference between non-moving and obsolete items is that the machine or asset is still used in the plant An analysis of 100 MRO Stores indicate that 50% or more of items had no usage for the past 2 years. Yet most of these items should be on hand when needed

MRO INVENTORY ANALYSIS AND CLASSIFICATION

Obsolete Items A part or spare may become obsolete either because the equipment was modified or the equipment was retired and decommissioned.

When an equipment is retired, the storeroom should be notified and the parts needs to be identified and scrap as well
Parts from this equipment eat up space from the storeroom. If you are a big plant with several department, both the department and storeroom can notify other departments if they have similar equipment otherwise the best option here will be to sell the part as scrap

MRO INVENTORY ANALYSIS AND CLASSIFICATION

SDE Analysis, classification of spares is based on lead time to acquire the part
This classification is carried out based on the lead time required to procure the spare part. The classification is as follows:

SCARCE (S) : Items which are imported and

those items which require more than 6 months of lead time.

Difficult (D) : Items which require more than a

fortnight but less than 6 months of lead time. Note : Fortnight means 2 weeks or 14 days

Easily Available (E) : Items which are easily

Available, usually less than a fortnight lead time.

SDE Analysis and classification helps in reducing the lead time to required the parts. This can reduce downtime in case of stock out. This will also result in streamlining the purchase and receiving systems and procedures.

MRO INVENTORY ANALYSIS AND CLASSIFICATION

VED Analysis, Classification Based On Criticality
Several factors contribute to the criticality of a spare part such as if the part belongs to a bottleneck equipment, then it is a critical part. Also, if lead time To acquire the spare would take months leaving the equipment idle. Based on criticality, spare parts are conventionally classified into three classes :

VITAL (V) : A spare part will be termed vital,

if its non-availability there will be very high loss due to production downtime or a high cost will be involved if the part is procured on emergency basis.

ESSENTIAL (E) : A spare part will be considered

essential if moderate loss is incurred due to nonavailability of the part. For example, bearings for motors of auxiliary pumps will be classified as essential.

DESIRABLE (D) : A spare part will be desirable if the production loss is not very
significant due to its non-availability. Most of the parts will fall under this category. Either the equipment has some redundancy