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Role of Supply Chain in Effective Maintenance and Asset Management - Part II

Overcoming the Complexities:
There are many complexities that create hindrance to the formulation of an MRO stockholding strategy.  Infrequently required spares, the mechanical complexity of spares, wide range of spare part components used in asset intensive companies and sourcing from multiple suppliers leading to lack of purchasing leverage are few of them. Standardization of spare parts required, optimization of the inventory held at site and supplier collaboration can lead to the formulation of a MRO stockholding strategy.

Standardization of Spare Parts: Identify the spares that are common for the assets throughout the organization. These standard spares can then be sourced from the same supplier throughout the organization even if they are being used across sites. This can lead to
1) Drastic reduction in working capital and stockholding at site level.
2) Negating the practice of looking for the same item at different vendors for the best deal and
3) Overhead costs and additional transaction costs can be curtailed by sourcing from a single supplier and volume discount can also be obtained.

Optimize Inventory Held at Site:  Routine Analysis should be done to ensure accuracy of on hand inventory and also alignment with the key spare parts. Real time analysis of demand patterns provides the basis for inventory optimization. In case of an asset having numerous spare parts some of which might be complex and is being used across sites of the organization, it would be a better idea to store only few parts at a single site. The total number of spares should be distributed across sites within an organization and in case of emergency the spare part needed can be transported. This not only optimizes the inventory in a site but also reduces the lead time required for procuring the spare part.

Supplier Collaboration for Tighter SCM Integration: A tighter SCM integration is possible by dealing with only few suppliers for all MRO spares needs. Benefits of supplier collaboration can manifold if, in the organization's site a warehouse fully managed by the suppliers is positioned. This ensures that the requirements of the organization in terms of spare parts needed are taken care of always especially during the erratic demand pattern times. An onsite storage facility managed by the suppliers also ensures that critical spares are available nearby; delivery requirements for maintenance schedule can be met just in time and most importantly a reduction in administrative work due to reduction in number of invoices. All these will ensure that significant cost reductions and operational benefits are achieved. When a component is failing more frequently than the other components, the onsite supplier facility can provide the value added service of testing and analysis to understand the behavior and suggest the ways forward.

Data Driven Approach to Achieve Strategy Alignment:
Any strategy alignment activity will not be fruitful unless the most important gap is addressed i.e. Data. Master data of the assets should be in order before any strategy alignment can be attempted. By identifying the asset data that are actually maintained in the system and what needs to be maintained we can prepare a master list. Critical assets are defined from the asset master data and lists of critical spares that cater to these assets are identified. The spares thus identified are reviewed and validated with the warehouse records to ensure that there is no mismatch in data. Once this one time activity is completed the organization can strive to achieve the strategy alignment.

A strategic fit between the maintenance and supply chain is always in the best interest of an asset intensive organization. Even if a near perfect strategy can be achieved this can lead to enormous benefits. The strategic alignment of maintenance and spare part management strategies ensures the business is benefitting from the best of both the strategies and ensures maximum optimization of its needs operationally.


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