Undertaking a critical spares review

Considering the criticality of parts, along with the cost of carrying them, provides a way of deciding what parts to stock. This is the essence of a critical spares review.

When machinery and plant break down, operations stop. Getting them running again – quickly – depends on having the right spare parts available. Unfortunately, it’s often not practical to keep every spare part in stock. This results in a trade-off between the cost of inventory and the cost of downtime while waiting for spares that aren’t in stock. A system is, therefore, required to consider each part in terms of how likely it is to fail and how its failure would affect operations.

The combination of the likelihood and the effect gives the criticality.

Considering the criticality of parts, along with the cost of carrying them, provides a way of deciding what parts to stock. This is the essence of a critical spares review.

At its most fundamental level, the cost involved in waiting for the delivery of a particular spare part can be multiplied by its probability of failure, to give an expected cost. If this cost is greater than the cost of carrying the part, it should be kept in stock. If the expected cost is less than the inventory cost, it should not be stocked.

In practice, it’s not always easy to evaluate the costs involved in waiting for a spare or the probability of every potential failure. Given a parts list of potentially 10,000 or more spare parts, accurately calculating the expected cost of not stocking every part may not be feasible. Several more efficient methodologies have, therefore, been developed.

Historically, engineering stores were not governed by any real science. A traditional storeman would develop his own system for deciding what to keep in stock, based on his experience. This system would usually not be documented with any transparency, making the storeman an indispensable member of the organisation. Because nobody understood the system, it was possible for parts to be made available or not based on politics.

A senior consultant with MCP Consulting Group puts it: “As many apprentices were to discover, he could be your friend (if he liked you) or your worst enemy by providing unchallengeable reasons why the item you wanted was not available.”

This all started to change in the 1990s as computerised maintenance management software (CMMS) started to introduce supply chain management principles to the store. Now, ISO 55000 requires companies to demonstrate the management of assets, including spare parts. This means managing inventory data, with procedures for cataloguing and purchasing, as well as demonstrating risk-based decisions.

Breaking down criticality

In a critical spares review, criticality assessment is the process of determining the effect on operations if a failed part is not immediately available for replacement. A critical spares review should also be carried out when planning preventative maintenance schedules; the process is essentially the same. Information may, therefore, be shared within overall maintenance, repair and operations (MRO) procedure.

First, all parts are listed in an asset register. For each item, a criticality assessment (or risk) is then carried out to determine two fundamental considerations: the impact on the business if it fails and its likelihood of failure.

This is a somewhat iterative process since items with high failure impact require different methods of analysis than those with high failure probability. Also, less critical assets may be analysed using simpler and faster methods, such as REM (review of existing maintenance). The more critical assets will require full FMECA (failure modes effects and criticality analysis) or RCM (reliability centred maintenance).

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