Benchmarks & Client Cases

Spare Parts Planning

The Challenge

spare-parts-volume

spare-parts-value

Problem


• 48% of stored spare parts were not consumed over the past year

• 68% of the value of spare parts was not consumed over the past year

• 150 requisitions per day for spare parts

• 60% of spare parts have a supply Lead Time of 1 to 3 weeks



Root Causes


• Replenishment of spare parts done in an ad-hoc way, depending on experience and a gut feeling

• Lack of structured information for stock analysis

• Low level of process automation contributed to errors

The Solution

Classification of parts

• Creation of an information structure that allows for parts classification according to criticality and consumption

• Implementation of Replenishment Levels for each part, to be updated automatically based on consumption from the last 36 months

• Implementation of Safety Stock to guarantee 99% parts service level

• Spare parts with low consumption are not managed through Replenishment Levels but through just-in-time ordering

• Study of suppliers to define the delivery Lead Times with precision 

The Results

The organisation was able to free more than $905,400 in Cashflow.


Stock Value

Stock Value

The stock value of spare parts was reduced by 26%



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