Network Design in Maintenance Inventories for Electric Utilities

Abstract

Within the electric distribution space maintaining a balanced inventory of spare parts forms a critical component of resiliency and restoration in the event of an outage. We find that leveraging network design provides an opportunity for utility companies to improve the effectiveness of the inventory they hold, enabling better service at a lower cost. For one regional utility company in the United States, an inventory reduction of 35% was found by adopting a hub and spoke model over a previous decentralized model. We believe that this observation can be extended to other companies with distributed assets, highly variable demand for inventory, long lead times, and a high cost of downtime.