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Spare Parts Cost Standard vs Capital Replacement Cost

Spare Parts Cost Standard vs Capital Replacement Cost

Spare Parts Cost Standard vs Capital Replacement Cost

(OP)
We're in the chemical/biotech industry and are looking to compare our spare parts inventory value to an industry standard. Is there a standard percentage of the capital equipment replacement cost that most chemical industries try to achieve for spare parts costs?

Thanks,
Phil

RE: Spare Parts Cost Standard vs Capital Replacement Cost

Spare parts value industrial standard? I am afraid that it is not that easy.

First you need to determine if it is a critical spare.
What will happen if it is not available

1) Plant shutdown? explosions?
2) If it will not have a direct drastic impact on the production, safety, quality etc.
  The next question is how long can we live without it (lead time).
Obviously if you have a time span of 10 days and the part is manufactured in Timbuktu, I would have a spare at hand
3) Can we predict its failure and timely anticipate? if the hardware store is next door and you have a creditline, I wouldn't store all sizes of nuts and bolts.

4) What kind of plant is it 7x24 hours? You will need spares!!

5) What is the cost of unexpected shutdown?
-overtime
-rush orders
-lost production
-lost market opportunities
-lost credibility

The air-conditioning of the big boss is not critical, but he needs it to keep his head cool, and not fry your a.. (office politics)

RE: Spare Parts Cost Standard vs Capital Replacement Cost

(OP)
Thanks for your response. I figured there would be more into it, but didn't know of a place to start.

We do have a critical process that runs 24x7x365 and do not have the programs in place currently to predict failure on many components.

We also have bean counters questioning the meger spare parts we keep, so we were trying to justify them. Hopefully in the future we can get the resources to quantify the necessity of the spares and justify any additional requirements. I'll look into a few maintenance books in my spare (no pun intended) time.

RE: Spare Parts Cost Standard vs Capital Replacement Cost

You have bean counters and bean producers, the first ones are likely to be hidden behind a desk in the accounting department.
When the plant goes down 2:00 hrs, saturday night, who's a... get fired? They roll on to the other side in their warm bed.
Do you have a CMMS in place? What is the history of your critical equipment, do you plan maintenance work in advance?
Which equipment falls in the category of trouble makers?

The cost of processing a purchase request is according to insiders higher then $200 in the States.
Ask your bean counters what it costs to buy something. Let they examine the whole chain, the requester (time spent to look for the required parts), screening by foreman/supervisor, approval by management (superintendent/manager), stores/procurement authorization etc..
If you need a bearing of $25 you will spent more then $200 to get it. When it is a rush order, the vendor may double the price.

a good place to start is http://maintenanceforums.com

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