Criticality analysis of spare parts management: a multi-criteria classification regarding a cross-plant central warehouse strategy

Abstract Today an efficient warehouse and inventory management of spare parts for production machinery is essential for service organizations. Optimal strategies in procurement, stocking and supply play an important role for serviceability in spare parts management. In this context, individual item criticality should be considered, which describes how crucial a spare part is. This paper presents a three-dimensional classification approach for spare parts regarding a cross-plant central warehouse strategy of a service network. The approach uses two dimensions to estimate value and predictability of spare parts with aid of an ABC and XYZ analysis. The third dimension VED analyses a multi-criteria criticality classification and six feasible criteria are identified to describe item criticality. The methodology of the analysis is based on a decision tree, which represents the defined criteria by nodes. In addition, the analytic hierarchy process is used to solve the multi-criteria decision problems at the different nodes of the decision tree. The approach is developed in a research project and evaluation of spare parts is performed based on real inventory and transaction data in cooperation with an industrial company. As a result 15,000 out of 50,000 items could be classified as suitable for central warehousing.

[1]  Ching-Wu Chu,et al.  Controlling inventory by combining ABC analysis and fuzzy classification , 2008, Comput. Ind. Eng..

[2]  D. Clay Whybark,et al.  Implementing multiple criteria ABC analysis , 1989 .

[3]  Rommert Dekker,et al.  An inventory control system for spare parts at a refinery: An empirical comparison of different re-order point methods , 2008, Eur. J. Oper. Res..

[4]  David C. Skinner,et al.  Introduction to Decision Analysis: A Practitioner's Guide to Improving Decision Quality , 1999 .

[5]  Ramakrishnan Ramanathan,et al.  ABC inventory classification with multiple-criteria using weighted linear optimization , 2006, Comput. Oper. Res..

[6]  Morris A. Cohen,et al.  Operations related groups (ORGs): A clustering procedure for production/inventory systems , 1990 .

[7]  Radivoj Petrovic,et al.  SPARTA II: Further development in an expert system for advising on stocks of spare parts , 1992 .

[8]  Patrick T. Harker,et al.  The Analytic Hierarchy Process , 1989 .

[9]  R. Dekker,et al.  A spare parts stocking policy based on equipment criticality , 1998 .

[10]  Murugan Anandarajan,et al.  Classifying inventory using an artificial neural network approach , 2002 .

[11]  Mladen Bošnjaković.  Višekriterijski model skladištenja rezervnih dijelova , 2010 .

[12]  Patrick T. Harker,et al.  The Art and Science of Decision Making: The Analytic Hierarchy Process , 1989 .

[13]  Kurt Matyas.  Instandhaltungslogistik: Qualität und Produktivität steigern , 2013 .

[14]  M. Z. Babai,et al.  Demand categorisation in a European spare parts logistics network , 2009 .

[15]  Adiel Teixeira de Almeida,et al.  Multicriteria decision making on maintenance: Spares and contracts planning , 2001, Eur. J. Oper. Res..

[16]  Benjamin Behmann.  Servicefähigkeit: Eine Methode zur Serviceplanung und simulativen Bestimmung der Servicefähigkeit auf Basis des Ausfallverhaltens von Maschinenkomponenten , 2013 .

[17]  Marcello Braglia,et al.  Multi‐attribute classification method for spare parts inventory management , 2004 .

[18]  Chandrasekharan Rajendran,et al.  Criticality analysis of spare parts using the analytic hierarchy process , 1994 .

[19]  Thomas L. Saaty,et al.  DECISION MAKING WITH THE ANALYTIC HIERARCHY PROCESS , 2008 .

[20]  Timo Pirttilä,et al.  Improving global spare parts distribution chain performance through part categorization: A case study , 2011 .

[21]  T. Saaty.  How to Make a Decision: The Analytic Hierarchy Process , 1990 .

[22]  Igor Linkov,et al.  Comparative risk assessment and environmental decision making , 2005 .

[23]  Mladen Bošnjaković.  MULTICRITERIA INVENTORY MODEL FOR SPARE PARTS , 2010 .

[24]  Gao Jingjiang,et al.  A Classification Model for Inventory Management of Spare Parts and its Application , 2012, 2012 International Conference on Industrial Control and Electronics Engineering.

[25]  Patrick T. Harker,et al.  The Analytic hierarchy process : applications and studies , 1989 .

[26]  Janne Huiskonen,et al.  Maintenance spare parts logistics: Special characteristics and strategic choices , 2001 .

[27]  Knut Alicke,et al.  Planung und Betrieb von Logistiknetzwerken : unternehmensübergreifendes Supply Chain Management , 2003 .

[28]  L. Fortuin,et al.  Stocking strategy for service parts : a case study , 2000 .

[29]  Günther Pawellek,et al.  Integrierte Instandhaltung und Ersatzteillogistik , 2013 .

[30]  Liliane Pintelon,et al.  Criticality classification of spare parts: A case study , 2012 .