Chapter 11.

SPARES PROVISIONING

Industry with a high level of investment, such as the oil and gas
industry, needs a high level of availability.

Product support and its related issues such as spare parts play an
important role in maintaining a system at a desired level of availability.

Reliability performance is a critical factor for product support and

spare parts planning which can be influenced by operational
environment. Therefore, all influence factors (covariates) on reliability
performances must be considered in order to predicate the required
number of spare parts.
1
 Cont’d
In general, provisioning means "providing" or making
something available. The term is used in a variety of
contexts.
11.1 Spares management

2
 Criteria for Decision Making

1.Instant reliability
2.Interval reliability
3.Cost minimization
4.(Process) Availability

3
 Cont’d

Due to the technology and economic issues, it is not

possible to design a system without failure. Therefore, it
is necessary to adopt appropriate and well-scheduled
activities regarding support and spare parts to assure the
desired level of availability throughout the system’s life.

However, spare parts provisioning is a complex problem

and requires an accurate analysis of all factors that may
affect the required number of spare parts.
4
 Cont’d
Different reliability based statistical approaches have been developed for spare parts
provision. The methods can be categorized in two main groups;
i) Analytical methods, and
ii) Simulation methods.
The analytical methods are based on Renewal theory for non-repairable items. Birth
and Death process have been frequently used for repairable items in the analytical
methods.
The Monte Carlo method is one of the main simulation methods
In the reliability-based spare parts provision,
 First step is to identify the reliability performance and failure rate of the item.
 Second the number of the required spare parts and the probability of spare part
availability can be estimated, However, to have an effective prediction, any factors
which have an influence on the reliability performance of the item must be
considered.

5
 Cont’d
The reliability performance of an item can be influenced by
different factors such as:
 The operational environment,
 Geographical location,
 Design material, maintenance history,
 Operator and
 Maintenance crew skill, etc.

The factors that may have an influence on the reliability

performance of an item are referred to as covariates. Ignoring such
covariates may lead to wrong result in reliability performance
analysis and consequently on spare parts provisioning.

6
 Cont’d
Spare parts are held to reduce the consequences of
equipment downtime, playing an important role in
achieving the desired equipment availability at a minimum
economic cost.
The gap between theory and practice of spare parts
management is investigated from the perspective of
software integration, maintenance management
information systems.

7
Cont’d

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Objectives of spare parts management

The key questions in spare parts management are to decide

which items are to be stocked as spare parts, when to
(re)order them and how many items to (re)order. In this
decision-making process, we should be clear about the
objectives.
1. Maximizing spares’ availability,
2. Minimizing the economic costs. Is the sum of the
inventory holding costs, stock-out penalty costs and
ordering costs, and
3. Minimize enviromental costs

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Main tasks of spare parts management through equipment
lifecycle process
Equipment life cycle cost is closely connected to investment and management of spare
parts inventories. In general, the equipment lifecycle process can be divided into three
main phases, namely
1. Initial procurement phase,
2. Normal operation phase, and
3. End-of-life phase.
The main tasks of spare parts management for each phase of the product lifecycle process
are summarized below.
Initial procurement phase :
When a complicated piece of equipment is bought, spare parts are often bought
simultaneously to satisfy the needs of equipment maintenance.
Then a decision must be made on the spare parts initial provisioning, and an inventory
and forecasting system must be designed in advance.
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 Cont’d
Normal operation phase :
When equipment is used by the user, preventive maintenance may be
carried out to prevent failure, while corrective maintenance is carried
out as failures occur
In order to satisfy the needs of maintenance, a certain number and
kinds of spare parts are supplied.
Successful equipment management depends on the proper execution of
spare parts control is needed.
Therefore, the inventory system and forecasting parameters should be
optimized (or at least improved) to provide sustainable supply support
according to the operational requirements of the equipment.
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 Cont’d
End-of-life phase :
In Phase 3, a fundamental issue of supply chain design is whether
products, or their components, should be reused, leading to
refurbishment or remanufacturing, If not, then it may sometimes be
necessary to set a final order on spare parts according to the demand
patterns at the end of the product life cycle (known as an ‘all-time buy’
or ‘last-time buy’).
This prompts a number of design issues to be resolved, including the
methodologies for classifying and forecasting the demand, taking into
account that no more orders may be made and simulating the
consequences of alternative strategies for these parts in the end-of-life
phase.

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Forecasting
Forecasting spare parts demand is a basic requirement of spare parts
management.
Because of the demand characteristics of spare parts, it is very di fficult to
accurately forecast demand in this area.
the critical challenges of inventory management in service parts are inaccuracy
of service parts forecasts ranks number two in the top ten challenges.
So it has been a hot topic in the industrial field as well as in academic research.
There are many forecasting techniques and this section restricts attention to
those forecasting methods which have been suggested for spare parts.
From a product lifecycle perspective, there are three kinds of forecasting tasks
namely forecasting initial demand, ongoing demand and demand over the
final phase.
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Forecasting approaches categorized in to three groups
these are:

a. Time-series based forecasting

A time series is defined as a time-ordered sequence of observations
taken at regular intervals (e.g., hourly, daily, weekly, monthly,
quarterly, annually).

Time-series forecasting is based on the assumption that future values

of the series can be estimated from past values.

If there is sample historical data, time-series based forecasting is

commonly used to forecast spare parts demand in practice.
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b. Reliability based forecasting

The most appropriate time-series based forecasting approach

depends on the availability of historical data.
In some cases, there is little time series data available to
forecast the future demand. In such cases, practitioners can
use reliability and maintenance variables to forecast spare
parts demand, as long as these variables are known or may
be estimated.
These models may also prove beneficial when more
extensive historical demand data are available, depending on
their predictive strength.
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c. Judgmentally based forecasting
There is some element of judgment in almost all forecasting
processes.
In some cases, a forecast may be purely judgmental. For
example, for new products, it may not be possible to
generate a statistical forecast because of the lack of historical
data on sales.
In other cases, a statistical forecast may be produced, but is
then amended by a demand planner in the light of the
planner’s judgment about changes in the internal or external
environments.

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 11.2 Spare Parts Identification process

To stay in business, equipment manufacturers are expected not only to

meet the needs identified by the client, but also to anticipate these needs
and to demonstrate that the products and services offered are equivalent,
if not superior to what is available on the market.

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18
Decision tree with filters
Decisions are based on the manufacturers’ recommendations or on
information from owners of similar equipment.
When complete information is available, then the decision-maker
chooses the criteria according to which the components will be
evaluated to determine if they should be on the list of spare parts.
A list of potential criteria is given in previous figure.
According to the criteria retained, evaluation and final decision-
making methods are to be selected next.
Each component of the equipment is then evaluated according to the
criteria and a total score is obtained.
A list of potential methods is also provided in previous figure.
A ranking of the components based on the final scores gives an
ordered list of potential spare parts.
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Desion tree
A ranking of the components based on the final scores gives an ordered list of
potential spare parts. Once the preliminary list of spare parts is established, it is
subjected to filters to select the parts to hold in stock and those to be supplied as
needed.
This tree takes into account the cost of acquisition or production, repair costs,
delays, whether there are early signs of failure or not, and if the component is a
standard part or not. A standard part is a generic mass-produced part readily
available at reasonable to low cost (e.g., seals, nuts and bolts, high replacement
rate parts).
Selected components are then ranked in order of importance. This classification
allows to pay more attention to the components considered as being more
important, especially if the list of spare parts includes a large number of
components and the resources available are limited or scarce.
Decision criteria most often used to justify that a spare part must be kept in stock
to serve as a replacement are: criticality, reliability, availability, impacts of
failure, failure rate and maintenance costs incurred in case of failure.
Any component i with RGi ratio greater than 1, is then kept in store as a spare.
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21
Determination of the required quantity of non repairable spares
For each component requiring spare parts, it is important to estimate the
required amount of spares needed throughout the economic life cycle of
the equipment.
To achieve this, one must estimate the average number of replacements
at failure and, where applicable, the average number of preventive
replacements.

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Determination of the required quantity of repairable spares

A failed component, according to its degradation state, is

repaired and put back in a “as new condition” or put in a
state where it can resume operation.
The acquisition cost of these repairable components is
generally high. If the repair is found to be not feasible for
technical, economical or other reasons, the failed
component is sent to a recycling or disposal facility.

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 Chapter 13. Reconditioning processes

To recondition a machine or piece of equipment

means to repair or replace all the parts that are
damaged or broken by repairing it, cleaning it, or
replacing parts
Synonyms: restore, repair, renew, overhaul

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Main elements which wants recondition before putting
the vehicle on the lot
The reconditioning process ensures each vehicle is in good
working order. Here are a few of the parts may need repair or
replace before putting the vehicle on the lot:-
A/C and heater
Lights and radio
Warning lights
Engine and airbag warning lights
Brakes
Exhaust system
Ignition system

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Used Car Inspection Checklist

26
 Cont’d

27
Cont’d

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Example: Battery Reconditioning

The process of reconditioning a car battery is an operation that attempts

to restore the ability of a dead battery to receive and store charge.
This process is a simple and straightforward operation that can be done
in two ways. Almost the same method that uses different mediums.
The first option is restoring a dead car battery with the use of Battery
Chem while the other method is carrying out the same process with the
use of the Epsom Salt battery recipe solution.
During the process, both of the agents break down the sulfate buildups
within the battery and its lead plates. This allows them to regain their
ability to take in electricity and store it then convert it to power. Both of
these processes are suitable for dead automotive batteries.
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