Course Details

Objective

As a result of attending this workshop the participants will understand:

• How to achieve consistent cataloguing
• The different costs associated with spares management
• The techniques to improve reliability resulting in less spares usage.
• How to select the right inventory policy for fast and slow moving parts.
• Good practices related to SPIR forms
• How to evaluate safety stocks scientifically.
• How to determine how many to buy.
• The strategies to minimize stock
• How to justify the financial case for high value spares.
• Hoe to measure inventory performance.
• What can be done inhouse and what can be done with specialist software.

Content

DAILY SCHEDULE

 

Course Introduction

 

Topic 1: Introduction to Spares Management

Delegates' issues

Common issues in inventory management with real examples

Where we incur excess costs

Benefits of improved inventory management

Terms and definitions used in the workshop

 

Topic 2: Recommended Spare Parts List (RSPL) from Vendors

RSPLs, their purpose and why they are submitted incorrectly, principles good spares cataloguing to ensure zero duplicates, and ease of searching

A critical review of a typical RSPL form and the associated procedures sent to vendors

Examples of good and bad RSPL

10 rules for effective use of RSPL

Proposed improved format for an electronic RSPL

 

Topic 3: Effective Cataloguing

Introduction and detailed examples of an 8 step cataloguing process, i.e

Defining naming formatting

Developing spare type guides to ensure consistent part naming

Developing rules for Mfg.’s Part/Nos, dimensions, abbreviations

Define strategies i.e. who to buy from OEMs, Vendors, specialist company

Develop a set of cataloguing best practice manuals

Create upload file and quality checks

Benefits of commercial cataloguing software

Many examples collected from our numerous studies will be shown

 

Topic 4: Inventory Cost Reduction Program

Introduction to a 25 step inventory reduction program, tactics including, but not limited to:

Audit CMMS spares data quality

Challenge the decision, whether to stock and who pays

Establish spare criticality and service levels

Apply the 80-20 rule to AIV, Item Cost, Stock Holding Cost

Identify duplicates line items

Reduce internal lead times to reduce stock holding costs

Standardization

Different strategies, min-max, reorder point control, constant vendor delivery

Replace OEM

List issues and make a plan

 

Topic 5: Discussion on Spares Costs

Different costs used in the stock management process, e.g. buying, holding cost, item cost, issue cost, penalty cost, average stock level costs, annual issue value

 

Topic 6: Introduction to Reliability Theory

Normal & Poisson distribution

Weibull parameters for high value spares

Explanation of service levels

Importance of the P-F

How to estimate annual usage using MTBFs or reliability data sources

 

Topic 7: Challenge Vendors Recommended Quantities

How to calculate estimated annual demand rates based on spare reliability

Case studies where actual consumption has exceeded initial estimates

 

Topic 8: When to order? (Setting of Re-Order Points, Safety Levels)

Different approaches to set safety stock

Using the Poisson distribution to set re-order points based on lead time, annual usage and criticality and the typical issue quantity

Different replenishment strategies such as ROP control, Min-Max and Constant Vendor Delivery

Exercise - setting re-order levels using formula based on the Poisson cumulative probability tables

 

Topic 9: How many to order?

How to determine the economic order quantity using both a formula and a tabular approach

The effects of ordering too many or too few

Evaluating whether discounts are worth accepting for higher quantities

What to do if the EOQ is not practical

 

Topic 10: Auditing current inventory Parameters effectiveness

Introduction to 25 inventory formulae, use an Excel worksheet to seek opportunities to reduce stock levels and stock holding costs

Metrics include service levels; safety stock, ROP, Average stock levels, no of years of stock, Annual Issue Rates, and Value, Stock holding value all calculated at line item level

Demonstration of an MS Access based application to simplify the analysis.

 

Topic 11: Database Solutions

Demonstration of an MS Access Based Application to simplify the analysis.

 

Topic 12: Evaluate Policies for Insurance Spares

Introduction to monte-Carlo simulation and penalty costs to evaluate policies for insurance spares

 

Topic 13: Alternative Strategies

Sometimes the ROP/EOQ strategy is not appropriate, discussion on other options

Min-Max policy

Constant Vendor Delivery

 

NOTE:

Pre & Post Tests will be conducted

Case Studies, Group Exercises, Group Discussions, Last Day Review & Assessments will be carried out.

 

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Methodology

A highly interactive combination of lecture and discussion sessions will be managed to maximize the amount and quality of information, knowledge and experience transfer. The sessions will start by raising the most relevant questions, and motivate everybody finding the right answers. The attendants will also be encouraged to raise more of their own questions and to share developing the right answers using their own analysis and experience.

All attendees receive a course manual as a reference.

This interactive training workshop includes the following training methodologies

30% Lectures

30% Workshops and work presentation

20% Group Work& Practical Exercises

20% Videos& General Discussions