Benchmarks & Client Cases
Spare Parts Planning
The Challenge
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 gut feeling
• Lack of structured information for stock analysis
• Low level of process automation contributed to errors
The Solution
• 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 organization was able to free more than £479,000 in cashflow.
Stock Value
The stock value of spare parts was reduced by 26%
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