Spares Management

Codification, History Cards,

Selective Inventory control,
Standardisation
 Introduction
 In this computer dominated world, every organization is
trying to convert their work from manual to computer
assisted work.
 For this, we need to apply some standards so that they can be
co-related correctly.

 In terms of maintenance management, maintaining spare parts

inventory, History of jobs done etc. requires codification,
cataloguing and maintaining history cards.
 Codification
 Codification is time tested standardization technique to keep
control of drawings, equipment, material and part.

 Codification is way through which items can be easily

identified and located

 Essential for organization having variety of machines spread

at various divisions and locations.
E.g. Codifying 12mm dia bolt as M-12 bolts

Confusion when not coded

the same item can be mentioned as adjusting screw in
carburetor of motorbike or 12 mm metric threaded bolt.

the same item can be mentioned as gland bush or single collar

bush.
 Categories of Codification

 Drawing codification
 Equipment codification
 Parts/spares codification
 Maintenance Defects & Maintnce. Jobs Codification
 Drawing codification
 In a new plant, initial drawing cataloguing is done on the basis
of supplier’s parts catalogue. But subsequently, codification may
have to be adjusted/modified accordingly.

 Ideally the drawing codification should be done first and

equipment and part’s catalogue should follow.

 In some steel plant of steel authority of India Ltd(SAIL), 10

digit drawing code is followed which is based on 8 digit
material code as illustrated in next slide.
 Letter Description
a a for operation items , 4 for mechanical , 7 for electrical items

b Shop Number(0-9)

c,d Equipment no. in shop (01 to 99)

e, f Assembly/sub assembly number(01 to 99)

g, h Part number of that assembly/sub assembly

i contains ‘0’ or ‘9’ 0 for 1 item in drawing & 9 for more than one item
in drawing
j It indicates no of revisions

Note:- if number exceeds 9 at ‘a’ or ‘j’ then alphabets from “A” to ‘Z’
can be used
Such codification for circuit diagrams is illustrated below
Spares/Consumables Codification
 Advantages of Codification

• No chance of confusion or mistake

• Searching and retrieval of any item becomes quicker and
easier
• Flexibility for using spares from one division to another
division and hence reduces chance of downtime.
• Codification is helpful for better inventory control.
• Overall maintenance cost reduces because above
advantages
 Concerns
• All concerned persons should be made aware of
codes and codification systems.
• For standard bought out components confirming to
National, international or reputed manufacture’s own
codes and catalogues, the user plants coding system
should be linked to the codes of standard
components.
 In an industry, generally three digit job code can accommodate all jobs.
Depending on the type of maintenance system adopted, the jobs can be
classified in the following categories;

Frequency Based (001 to 500 Condition Based

Nos) (501 to 999 Nos)

Checking, adjustment & minor repairs Replacements (501 to 650)

(001 to 200)

Lubrication (201 to 350) Repair and reconditioning (651 to

850)

Replacements (351 to 500) Overhauling (851 to 999)

 History Cards/Sheet
 After codification and cataloguing next important
thing is to prepare History Card/Sheet for each
system, equipment or subassemblies.
 These give few essential information about acquisition
of assets/material, which are permanent records and
few essential information about maintenance and
upkeep of assets.

 This can be in the form of manual records like cards,

sheets or registers or in computer memory.
 History Cards Uses
 It keeps permanent record of the machine , major jobs done &
constraints faced if any.

 It provides ready information and guide for planning repair

jobs, shut downs and oil changing etc.

 It serves as a guide for spares planning and inventory control

of consumables like lubricating oils.
STANDARDISATION
 SPARES INVENTORY MANAGEMENT
• ABC Analysis
• VED Analysis
• SD
 INVENTORY MANAGEMENT
• The magnitude of variety of SKUs carried in an organization
may vary from few thousands – for example, in a small car, there
are around 30,000 components or parts that make a product.
• However, in an aircraft there may be 80–90 thousand parts and
components.
• In a large complex steel plant, the number of materials/SKUs
may be more than 200,000.
• Thus, selective management of inventory becomes an operating
necessity; otherwise, it will be counterproductive to be
indiscriminately rational in inventory control of all these items.
 ABC Analysis

• Annual usage value = annual consumption in units x unit

purchase price
• In case of dynamically varying unit prices of materials, it may
be obtained by actual money spent on consuming that
material in a year – the information captured through stores
accounting systems.
• ABC analysis is the most popular method of selective
inventory control and due to its effectiveness has also been
called as “always better control.”
 Pareto’s Law of Maldistribution

• we have “significant few” and “insignificant

many.”
 A class items
• These are (say) 10 % top annual usage value
items which are responsible for (say) 75 % of the
total annual material expenditure.
• These are the “significant few,” and any rigor of
scientific inventory control will be
justifiable for such a class of items.
 For A class items
• – Most rigorous scientific inventory control employing most
relevant inventory model – even if it is complex – for ordering
decisions.
• Accurate demand forecasting model, serious efforts in
computing inventory related costs parameters, continuous
monitoring of the inventory status, most accurate record
keeping, and regular monitoring of the inventory turnover
ratios of these items are the areas for improvement.
• Revisiting procurement systems and processes to reduce the
lead time and the uncertainty associated with lead times,
purchase price negotiations, value analysis, vendor
development, etc., are
 B class items
• Next 20 % items (cumulatively top 30 %) will be
responsible for additional 20 % (cumulatively 95 %)
annual usage value.

• These do not require a very thorough control effort

and simple or relaxed controls will be adequate.
 For B class items
• –Simple, approximate inventory models, approximate
forecasting method, and periodic review of stock for
monitoring the stock status and approximate
estimation of lead times will do.

• Hence, simple, relaxed, or loose control will suffice

for B class items.

• There is no need to develop complex stochastic

models of demand, lead time, or inventory.
 C class items
• A vast majority of low-end (say) 70 % items will hardly
account for (say) 5 % of the total annual usage value. These
items constitute “trivial many.”

• For such items, no scientific approach of inventory control is

necessary or even desirable and may be an enlightened
commonsense approach, or “rule of
thumb” decision rules will suffice for such items.
 For C class items
• These items do not require any model-based decisions.
Heuristic rules based on intuitive judgment should do.

• There is no need for demand forecasting model; no need to

estimate other inventory-related cost parameters unless the
items possess some special features such as high perishability
or stock-dependent consumption.

• Perhaps the system can tolerate higher buffer/safety

stocks and high-order quantities for such items.
 VED Analysis
• ABC analysis does not address the issue of
what happens if we do not have materials
when required.
 ABC-VED Matrix and Service Levels

• ABC analysis and VED analysis attempt to group

the items into three categories from two different
perspectives. ABC looks at what happens when
we have the item in stock, while VED looks at
what happens if we do not have the item when
required.
• However for each item these twin attributes
constitute the two sides of the same coin
SDE Policy
Standardization