A systematic approach to internal spare parts management
Author(s)Meggs, Paul W. (Paul William)
Leaders for Global Operations Program.
Juan Pablo Vielma and Bruce Cameron.
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Internal spare parts management is a universal issue faced by all manufacturers, and involves decision-making and planning across a highly complex and heterogeneous group of thousands of items. Spare parts exhibit intermittent demand and a variety of prices, lead times, and potential downtime costs that pose challenges for planning and control. Managers can facilitate spare parts decision-making through the utilization of classification methods to prioritize critical parts and forecasting tools to better establish inventory policies. This thesis explores a classification method to evaluate the criticality of spare parts using the Analytic Hierarchy Process and applies bootstrapping forecast techniques to better inform safety stock levels. A joint classification and forecasting model is developed and validated for use by supply chain and maintenance teams in the organization. Through improved safety stock settings, an inventory savings of up to 39% is identified while maintaining or increasing service levels for critical spare parts. For most manufacturing companies, the approaches and findings discussed in this thesis are applicable and can be used to aid efforts in establishing a systematic approach to internal spare parts.
Thesis: M.B.A., Massachusetts Institute of Technology, Sloan School of Management, 2014. In conjunction with the Leaders for Global Operations Program at MIT.Thesis: S.M., Massachusetts Institute of Technology, Engineering Systems Division, 2014. In conjunction with the Leaders for Global Operations Program at MIT.32Cataloged from PDF version of thesis.Includes bibliographical references (pages 56-57).
DepartmentSloan School of Management.; Massachusetts Institute of Technology. Engineering Systems Division.; Leaders for Global Operations Program.
Massachusetts Institute of Technology
Sloan School of Management., Engineering Systems Division., Leaders for Global Operations Program.