Making Smart Spare Parts Decisions
Managers often need to estimate the spare parts requirements for a system such as a fleet of aircraft or a set of equipment for a particular function (moving oil, producing electricity, etc.) A typical system has many components, such as motors, valves, and pumps. When those components fail, they must be replaced with spare parts before operations can continue. The question that system managers are frequently called upon to answer is: What spares are required to support the system over some future period?
Linking Annual Budgets to System Performance
To answer that question, LMI developed the ASM® sparing model, a system-oriented approach to spares management. This approach bases spares requirements explicitly on each item's effect on overall system performance, as well as the item's unit cost. The ASM® sparing model measures system performance in terms of availability — the probability that the system is not inoperative for lack of a spare. In this context, a spare's benefit is measured in terms of the projected increase in system availability gained by adding that spare to the inventory. Potential spares buys can then be ranked in terms of benefit divided by cost as a measure of the desirability of adding them to the inventory. Using this process guarantees that the spares mix produced yields the best possible availability for the dollars expended.
Finding Cost Saving Opportunities
The ASM® sparing model produces a typical savings in spares inventory of 20 to 30 percent over traditional item-oriented methods. It enables supply network managers to balance logistics resources with system performance by considering the system-wide effects of sparing recommendations. Given the ASM® sparing model’s unique capabilities, LMI can tailor recommendations to expressly fit the specifics of anticipated system operations.