Risk Centered Spares (RCS)

Optimize Inventory & Spare Parts

Modern engineering stores hold a wide range of parts, from cheap consumables used in thousands annually to critical spares costing tens or hundreds of thousands of dollars which may never be used over the entire lifetime of the plant. Up to 50% of inventory value may consist of spare parts that are used at the rate of one per year or less. Between 10% to 30% of the inventory can sit on the shelves for the complete plant lifetime. Taking a financial view, perhaps these parts should never have been purchased. On the other hand, if they were not available when they were needed, the business could suffer severe downtime consequences.

The Aladon RCS process, derived directly from Reliability Centered Maintenance, addresses these specific criteria for all inventory, whether consumables or slow-moving parts. We help you achieve substantial savings by applying the RCS method to expensive, slow-moving, critical parts. RCS determines the level of spare parts inventories based not on manufacturer’s recommendations, nor on a subjective judgment of service level, but on the requirements of the equipment and maintenance operation that the inventory supports.

The Fourth Industrial Revolution resulted in heavy industry reliance on automated and mechanized assets to generate wealth. Maintenance responds to predictive analytics and information and no longer just physical symptoms. More machines are built on the plug-and-play concept, and as machines become more complex in nature, so do the consequences of failure and consequences of not having spare parts. Equipment downtime became more critical because of global competition, and it now matters a great deal more if equipment fails.

On one hand, efforts are made to increase production and quality; on the other, there are strong pressures to reduce the capital tied up in the business, including high value spare parts. This is the dilemma of decision-making: in the short term it is possible to cut inventory to almost any extent, but if we do, the consequences may be felt many years later in the form of extended downtime. Finally, the general return to core business has forced many companies to ask whether they should hold spare parts at all.

Maintenance struggles to adapt to this new environment and started to rely on spare parts to avoid costly downtime. The Aladon Fourth-generation Maintenance solution provides the rigor to face these challenges. Maintenance has probably changed more than any other business process, and the change continues to accelerate. Industry and society as a whole demand improved availability and reliability, greater safety and environmental integrity together with ever higher levels of cost effectiveness.

What is needed is not a new purchasing system or new procedures, but an auditable method to ensure that inventory fully supports operations and maintenance. RCS is an extension of RCM to cover spare parts and inventory services.

How RCS Works

Step 1: Ensure that the maintenance requirements of the asset(s) are clearly understood

No spare parts policy or inventory system can do anything to make an ineffective maintenance schedule more effective. An efficient inventory system may even increase costs if it simply supplies parts more quickly to a poorly planned maintenance program.

Spare parts support both planned, preventive maintenance programs and breakdown maintenance (No Scheduled Maintenance in RCM terms). An RCM analysis of maintenance requirements is invaluable because it identifies both planned requirements (which may be predictable) and breakdown requirements (which are inherently unpredictable).

Step 2: Determine the spares requirements of the plant in the context of its operations and maintenance
Step 3: Ensure that the resources, procedures and systems are in place to deliver the requirements determined in step 2

The RCS Process

The Risk Centered Spares (RCS) method consists of a series of questions, starting with the ways in which equipment can fail (failure modes), moving through the effects of failure and the effects of a stock-out (part unavailability) to setting the correct stocking policy for each spare part.

RCS: Five Basic Questions:

  1. What are the maintenance requirements of the equipment?
  2. What happens if no spare part is available?
  3. Can the spares requirement be anticipated?
  4. What stock holding of the spare is needed?
  5. What if the maintenance requirements cannot be met?

The first question is answered as part of a Reliability Centered Maintenance (RCM) analysis. The final four questions ensure that spares inventories and systems match the needs of operations and maintenance.

Implementing RCS

A Risk Centered Spares (RCS) review can be undertaken either before buying spare parts for a new asset or when an asset has been in service for some time. A review of a complete engineering inventory – perhaps consisting of several thousand items – would be a long and costly exercise. Not all items have equal value, nor are the effects of a stock-out the same for each line. It follows that a review of an existing inventory should begin with the most significant items.

The Benefits of RCS

The immediate and most obvious benefit of applying RCS to critical spares is that stock levels are based directly on the requirements of maintenance and operations. Because the method is driven by consequence analysis, it achieves these requirements with the optimum investment in spare parts, typically saving 30% to 60% on inventory value while complying with production, safety and environmental requirements. A through-life cost model determines the optimum spare parts and compares cost vs risk throughout an asset’s useful life.

The method has human benefits in addition to the technical and financial improvements achieved:

  • Improved communications between engineering, production and inventory personnel
  • Improved understanding of inventory and maintenance systems requirements
  • Clearer and more profitable relationships with suppliers

Please contact Aladon or an Aladon Network Member near you for further information. Download Aladon’s RCS brochure here.

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