Spares Parts Management...

Spares Parts Management  Spare parts are the lifeblood of operational reliability and plant capacity.  No plant can operate at a high level of output without a reliable supply of functional spare parts. Yet, spare parts are also the most overlooked contributor to reliability outcomes.  Many organizations routinely operate without properly implementing even the most fundamental aspects of spare parts management at their sites.  Often these organizations have storerooms with neat shelves and clear labels but this is not enough for highly reliable spare parts management.  Effective spare parts management is essential for making a difference in the operational reliability. Superficially, achieving best practice spare parts inventory management looks simple because spare parts can appear to be just like any other inventory.  But in reality they are different from other inventory types and this is reason why best practice (or even good practice) can be so hard to achieve. In reality, the spare parts management brings together the diverse disciplines of maintenance management, inventory management, storeroom management, supply chain, procurement and logistics. This adds a layer of complexity that is usually not found with other inventory types. It is a paradox to note that the maintenance department always complains of the non availability of the spare parts to meet their requirement and finance department always faces the problem of increasing locked up capital in spare parts inventory. This amply signifies the vital importance of spare parts management in an organization. Spare parts management plays an important role in achieving the desired plant availability at an optimum cost. Steel plants are normally capital intensive, mass production oriented and with sophisticated technology. The downtime for steel plant and its equipment is prohibitively expensive. The unique problems faced by the steel plant management in controlling/managing the spare parts...

Inventory Management and Control...

Inventory Management and Control  In an organization there are stock of finished products, semi finished products, in process materials raw materials, spare parts, operating parts, fuels, and consumables. The collective name of these entire items is inventory. Inventory occupies the most strategic position in the structure of working capital of the organization. It constitutes the largest component of current asset. The turnover of working capital is largely dependent on the turnover of inventory. It is therefore quite natural that inventory which helps in the maximization of profit occupies the most significant place among current assets. The maintenance of inventory means blocking of funds and so it involves the interest and opportunity cost to the organization. The inventory cost is not only interest on stocks but also cost of store building for storage, insurance and obsolesce.   Hence it is necessary that a great emphasis is placed on inventory management and control. The primary objectives of the management and control of inventory are as given below. To minimize the possibility of disruption in the production schedule for want of raw materials, consumables, spares and other stores items. To keep down the capital investment in inventories. To ensure sufficient stock of semi finished products so that there is no disruption in the production schedule. To ensure adequate stock of finished product to meet the delivery requirement of the customer. It is essential to have only the necessary inventories. Excessive inventory is an idle resource which is a matter of concern. The investment in inventories is to be just sufficient and is to be at the optimum level. The major dangers of excessive inventories include the unnecessary tie up of the organizational funds, excessive carrying cost, and the risk of liquidity. The excessive level of inventories consumes the...