Spare Part Management Function - Euromaintance ... - DNV Germany

PAPER 

Speaker: 

Company: 

Speaker: 

Company: 

Brussels • 8-10 April 2008 

A review of industry practice and 

performance of the spare part 

management function 

Christian Klöppner 

Det Norske Veritas 

Atle Stokke 


© Euromaintenance 2008 – Belgium - www.euromaintenance.org 1

Content 

Introduction 

Suggestions for improvement 

Continuous improvement 

Focus areas 

Our approach 

Literature review 

Industry survey 

Performance assessment 

The results 

Company performance 

Conclusions 


Det Norske Veritas (DNV) - Energy 

Deep and ultra-deep 

water field 

development 

Floaters 

Onshore 

pipelines 

Offshore 

pipelines 

Carbon Capture 

and Storage 

Managing 

risk 

Power Generation 

and Transmission 

Natural Gas/LNG 

Wind, Wave and Tidal 

Energy 

Refining & 

petrochemicals 

Operations 

excellence 

Arctic Operations & 

Technology 


German power industry 

(Illustrative picture) 


Norwegian offshore industry 

(Illustrative picture) 

North Sea 

(west) 

North Sea 

(south) 

Norwegian 

Sea 

Barents 

Sea 


Spare part as a part of maintenance 

MAP-2007 (Maintenance Assessment Protocol) 

Leadership 

People 

Policy & 

Strategy 

Partnership 

and 

Resources 

Enablers 

Plan Do 

Act 

Based on EFQM Framework for Risk Management 

Check 

Operation and Maintenance -process 

Innovation & Learning 

People results 

Customer 

results 

Society 

results 

Results 

© Euromaintenance 2008 – Belgium - www.euromaintenance.org 6 

KPI-results

Maintenance target 

Low operational 

expenditure 

Value added 

Continuous 

Continuous 

Improvement 

Improvement 

High availability 

and and reliability 


Suggestions for improvement 

Recommended 

improvements realised 

Harmonisation 

Establish clear competencies 

Develop common understanding for KM 

Critical 

spares 

CONTINUOUS 

IMPROVEMENT 

(Source: Brix, 2007) 


Support for the “how to” 

Harmonisation of spare part accounts 

�� Identification of relevant plants and spare parts 

�� Selection of common technical classification 

�� Formulation of targeted improvements 

�� Finalise the recommended harmonisation OR 

�� Abandon the efforts or change OR 

�� Extend harmonisation to other plants and parts 

Plan Do 

Act Check 

Common identification and provision of critical spares 

�� Collection and evaluation of available data and 

documentation 

�� Define the methodology to identify critical parts 

�� Research alternatives to local stocking 

�� Implement recommended option 

�� Establish needed (central) authorities 

�� Continuously review decisions 

Plan Do 

Act Check 

�� Establishing central authorities 

�� Collection and comparison of spare part 

properties and elimination of duplicates 

�� Evaluation of the achieved results, e.g. 

reduced accounts [%] or possible cost 

reductions through common storage [€] 

�� Assess the economic consequences of 

failures 

�� Assess the costs of local stocking and of 

alternatives to it 

�� Chose the economically most viable option 

�� Check which procedures and authorities are 

required for that option 

(Source: Matayas, 1999; modified by Brix, 2007) 


Coordination of new purchases and repairs 

Plant level: 

demand and check of order criteria 

Frame contract 

exists 

Order value < 

threshold A1 Order value < 

threshold A 

(often e-catalogue) 

1 

(often e-catalogue) 

Order value > 

threshold A and 

< threshold B1 Order value > 

threshold A and 

< threshold B1 Reorder level 

is reached 

Automated 

order request 

no 

no 

no 

yes 

yes 

yes 

1) Threshold A typically around € 10.000, 

threshold B around € 100.000. 

Plant level: 

Authorised agent 

Verification 

of order 

Triggering 

of order 

Finalise order 

with supplier 

Corporate level: 

Purchasing dept./ lead buyer 

Bundle and 

finalise orders 

Corporate level: 

Steering committee 

Final appraisal 

Reject order 

Appraisal of 

spare parts 

request2 request2 (Source: Brix, 2007) 


no 

2) Can be approved ex post 

in case of emergency.

Factors influencing downtime 

Failure 

Operating 

state 

A 

B 

C 

Response Diagnosis & 

time Spare request 

Resp. 

time 

Resp. 

time 

Resp. 

time 

Diagnosis & 

Remove 

Spare requ. 

Diagnosis & 

Remove 


Diagnosis & 

Remove 


DOWNTIME WITHOUT REPLACEMENT SPARE 

Remove 

Repair in workshop OR 

Order/manufacture replacement 

Repair in workshop OR 

Order/manufacture replacement 

Special supply contracts, 

pooling of spares etc. 

Internal transport & 

Install spare part 

Transp & 

Install. 

Transp & 

Installation 

Transport & 

Installation 

Re-start 

Test Operating 

Test 

state 

Operating 

state 

(Source: Schieck, 2003; Hodges, 1993; modified by Brix, 2007) 


Test 

Test 

Test REDUCED DOWTIME WITH SPARE

Maintenance Management Circle 

Resources: Results: 

Organisation 

Material 

Support 

Resource 

needs 

Goals & 

requirements 

Improvement 

measures 

Maintenance 

Program 

Management 

Continuous 

Improvement 

Analysis 

Planning & 

scheduling 

Maintenance 

execution 

Reporting 

Technical 

condition 

Prod. availability 


Cost 

SHE-level 

(Source: DNV, 2004)

Information exchange between departments 

(Source: Biedermann, 1987; modified by Brix 2007) 


Requirements and classification to spare parts 

(Source: Brix, 2007) 


Key performance indicators (KPIs) 


Maintenance Assessment Protocol (MAP) 

1 Maintenance Management, goals and requirements 

2 Maintenance program 

3 Planning function 

4 Execution 

5 Asset condition 

6 Effectiveness measures 

7 Analysis/improvements 

8 Workshops 

9 Human resources 

10 Organization 

11 Sub supplier 

12 Spare parts system and supply 

13 Documentation 

14 Safety 


MAP level 4 scoring – Spare parts 

Main 

element 

Spare parts 

system and 

supply 

Level 4 target 

Spare parts/ stocks optimised according to overall goals for 

safety, production and cost, continuously evaluated and 

adjusted accordingly. Coordinated and harmonized with other 

plants and with suppliers ability to deliver in due time. 


Results of MAP - Example 

12 Spare parts 

system and supply 

13 Documentation 

11 Sub supplier 

10 Organization 

9 Human resources 

1 Maintenance management, goals and 

requirements 

4,0 

14 Safety 

2 Maintenance programme 

3,5 

3,0 

2,5 

2,0 

1,5 

1,0 

0,5 

0,0 

8 Workshops 

Site 1 Site 2 Site 3 Site4 

3 Planning function 

7 Analyses/improvements 

4 Execution 

5 Assets condition 

6 Effectiveness measures 


Performance assessment – 1/2 


Performance assessment – 2/2 

Spare part 

management 

Standardized 

documentation & 

harmonization 

Prioritization and 

optimization of critical 

spare parts 

Clear competencies and 

responsibilities 

Company A 

3 

2 

2 

Performance level 

Company B 

2 

2 

2 

Company C 

3 

3 

3 


Favourable developments identified 

Harmonisation of spare part 

accounts gained substantial 

savings – 

15-20 % reduction in accounts 

reported 

Focus on continuous 

improvement and application of 

KPIs have proved to have a 

significant positive impact on 

performance 

The use of a central authority to 

support purchase of spare parts 

is an effective way to address 

problems related to 

communication between 

departments 

A detailed failure record is crucial 

for applying suitable analysis on 

optimal stock levels 


References 

Biedermann, H.: Praxisorientierte Entscheidungsparameter zur logistischen 

Ersatzteil-be-wirtschaftung. In: Bäck, H.: Erfolgspotential Logistikkette. Verlag TÜV 

Rheinland, Köln, 1987, pp. 250-287 

Campbell, J.D. and Jardine, A.K. (eds.): Maintenance Excellence – Optimizing 

Equipment Life-Cycle Decisions. Marcel Dekker Inc, New York, 2001. 

Brix, F.: Spare Part Management as a Part of Asset Management – Current Pratices, 

Challenges and Potential of Improvement at Energy Utilities. Diploma thesis Universität 

Karlsruhe (TH), 2007 

DNV: ORBIT Maintenance Assessment Protocol – Methodology Procedure, Version 

1.2. Det Norske Veritas AS, Stavanger, 2004. 

DNV: Internal documentation on maintenance strategies. Det Norske Veritas AS, 

Høvik, 2002. 

Gopalakrishnan, P. and Banerji, A.K.: Maintenance and Spare Parts Management. 

Prentice-Hall, New Delhi, 2004. 

Huiskonen, J.: Maintenance Spare Parts Logistics: Special Characteristics and 

Strategic Choices. in: International Journal of Production Economics, Volume 71, 

Issues 1-3, 2001, pp.125-133. 

Matyas, K.: Taschenbuch Instandhaltungslogistik – Qualität und Produktivität steigern. 

Carl Hanser Verlag, München, 1999. 

Redeker, G.: Bestimmung des optimalen Lagerbestandes an Instandhaltungsmaterial 

und Ersatzteilen. Müller-Druck, Mainz-Finthen, 1973. 

Wireman, T.: Developing Performance Indicators in Managing Maintenance. Industrial 

Press Inc, New York, 1998. 

Dartmouth: The PDCA cycle. Dartmouth College Library, http://www.dartmouth.edu/ 

~ogehome/CQI/PDCA.html, most recent update: 2007, last viewed: 03.07.2007.

PAPER 

Speaker 

Name : 

Function : 

Department : 

Phone : 

Mobile : 

Fax : 

E-mail : 

Company 

Name : 

Main activity : 

Address : 

City + zip code : 

Country : 

Web site : 


Contact 

Christian Klöppner 

Principal Consultant 

Utility and Process Germany 

+49 (0)201 7296 – 451 

+49 (0)173 5475871 

+49 (0)201 7296 – 411 

christian.kloeppner@dnv.com 


Risk Management 

DNV Germany 

GmbH . Schnieringshof 14 

D-45329 Essen 

Germany 

www.dnv.com 


PAPER 

Speaker 

Name : 

Function : 

Department : 

Phone : 

Mobile : 

Fax : 

E-mail : 

Company 

Name : 

Main activity : 

Address : 

City + zip code : 

Country : 

Web site : 


Contact 

Atle Stokke 

Consultant 

Asset Risk Management 

+47 67 57 92 43 

+47 99 69 15 10 

+47 67 57 99 11 

atle.stokke@dnv.com 


Risk Management 

Veritasveien 1 

Høvik 1322 

Norway 

www.dnv.com

Spare Part Management Function - Euromaintance ... - DNV Germany

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