Decision-making framework for inventory management of spare parts in capital-intensive industries

[摘要] ENGLISH ABSTRACT: Effective management of spare parts inventory is essential to companies becauseit influences inventory costs and asset utilization. The vast and diverseportfolio of spare parts, intermittent demand patterns and contradicting objectivesbetween departments are examples of some of the factors that complicateSpare Parts Management (SPM). Managers of spare parts are facedwith trade-off decisions between risk and cost on a daily basis. These decisionsinclude, amongst many, determining appropriate stock levels and orderfrequencies. Despite the importance of SPM, decisions are however often madeintuitively in practice with little factual support, and the decision-making processis commonly constrained within departmental silos. Even though thereis a large body of academic knowledge on this topic, practical applications ofspare parts inventory solutions lag behind theoretical studies.The majority of studies in literature focus on single components of SPM, suchas demand forecasting and parts classification, whereas fewer studies considerthe decision-making process itself. This study proposes a decision-makingframework for spare parts inventory management. The framework is based ona wide-ranging literature review that focuses on capturing the essence of SpareParts Management (SPM), but also acknowledges the interconnectedness of theproblem. Therefore, core inventory management principles, as well as closelyrelated topics such as Supply Chain Management (SCM) and Physical Asset Management (PAM), are studied in the context of spare parts. The broadscope of the literature study leads to a holistic approach to the problem andprevents sub-optimization.The proposed framework condenses principles from various fields of study(SCM, PAM, Classification and Inventory Management) into a stepwise methodologypresented as a decision-making framework. The objective of the frameworkis to provide managers with a structured process, based on factual information,to enable better decision-making in the field. Furthermore, theframework aims to capture the fundamentals of SPM in a simplistic mannerto ease the adoption of the framework in practice. A case study is conductedin the South African mining industry to validate the framework. The casestudy demonstrates that the framework is practical, provides structured guidance,and assists managers to make trade-off decisions in managing spare partsinventory.

[发布机构] Stellenbosch University