Efficient Plant December 2017 - 51
Answers to questions
facing today's reliability
& maintenance
professionals
Q
"Where do I get money to
pay for predictive/condition-based monitoring?"
A
You've made your pitch to management (Efficient Plant, Oct.
2017, p. 47) and followed up with PM
Optimization (Efficient Plant, Nov.
2017, p. 44). You now should be able to
free up people to implement predictive
maintenance (PdM)/condition-based
monitoring (CBM). However, you
still need funding for equipment and
training.
The quickest way to obtain needed
funds, outside of management simply
handing you a budget, is to improve
on your spare-parts-management
process. Every parts-reduction process
that I have been involved with has
resulted in at least a 10% to 40% reduction in MRO (maintenance, repair,
and operations) spare-parts inventory.
Negotiate with management to apply a
percentage of that spare-parts savings
to fund the initial stages of your PdM/
CBM process.
There are several ways to find these
funds. Assume you have $10 million in
MRO spare parts. A 10% reduction is
$1 million in savings. A 40% reduction
with $2.5 million in parts is also a
$1-million gain.
A few commonly used metrics in
MRO spare-parts management are
inventory turns and inactive, out-ofstock, and overstocked inventory. The
following definitions are consistent
with the SMRP (Society for Maintenance and Reliability Professionals,
Atlanta, smrp.org) Body of Knowl-
DECEMBER 2017
department | on the floor
edge. For this discussion, assume
annual stock purchased is $5 million,
inventory turn is 0.5, and stock outs
are at 10%:
Inventory turns = stock purchased/
stock on hand ($) = $5 million/$10
million = 0.5
Achieving an inventory turn of
0.56 = $5 million/$9 million saves $1
million. Best practice is greater than
1.0 inventory turn.
Over-stocked inventory best practice is less than 2%. An 8% overstock
on $10 million is worth $800,000 +
$200,000 (from 25% carrying cost) =
$1 million savings.
Parts sharing, or "share the spare"
between plants can return 50% to
70% from my experiences. Sharing $3
million will save at least $1.5 million.
Stocked MRO-inventory value per
RAV (%) = (Stocked MRO Value ($)/
Replacement Asset Value ($)) x 100 =
$10 million/$500 million = 2%.
Assuming the same replacement asset value, getting to a 1% value would
mean a $5 million savings.
There are plenty of other inventory metrics and strategies that can
be used, such as percentage of total
work orders kitted and percentage of
inventory accuracy. However, it's up to
you to select the factors that can make
a difference at your location and that
you can use to generate improvement.
For example, you need to look at such
things as:
reducing order stock to the
correct level
selling excess and old stock
arranging with your suppliers to
Spare-Parts
Management
Generates
CBM Funds
Dr. Klaus M. Blache
Univ. of Tennessee Reliability
& Maintainability Center
Find the money you need to start a predictive-maintenance/condition-based monitoring
program by improving spare-parts management.
EFFICIENTPLANTMAG.COM |
51
http://www.smrp.org
http://www.EFFICIENTPLANTMAG.COM
Table of Contents for the Digital Edition of Efficient Plant December 2017
Efficient Plant December 2017 - 1
Efficient Plant December 2017 - Cover1
Efficient Plant December 2017 - Cover2
Efficient Plant December 2017 - 1
Efficient Plant December 2017 - 2
Efficient Plant December 2017 - 3
Efficient Plant December 2017 - 4
Efficient Plant December 2017 - 5
Efficient Plant December 2017 - 6
Efficient Plant December 2017 - 7
Efficient Plant December 2017 - 8
Efficient Plant December 2017 - 9
Efficient Plant December 2017 - 10
Efficient Plant December 2017 - 11
Efficient Plant December 2017 - 12
Efficient Plant December 2017 - 13
Efficient Plant December 2017 - 14
Efficient Plant December 2017 - 15
Efficient Plant December 2017 - 16
Efficient Plant December 2017 - 17
Efficient Plant December 2017 - 18
Efficient Plant December 2017 - 19
Efficient Plant December 2017 - 20
Efficient Plant December 2017 - 21
Efficient Plant December 2017 - 22
Efficient Plant December 2017 - 23
Efficient Plant December 2017 - 24
Efficient Plant December 2017 - 25
Efficient Plant December 2017 - 26
Efficient Plant December 2017 - 27
Efficient Plant December 2017 - 28
Efficient Plant December 2017 - 29
Efficient Plant December 2017 - 30
Efficient Plant December 2017 - 31
Efficient Plant December 2017 - 32
Efficient Plant December 2017 - 33
Efficient Plant December 2017 - 34
Efficient Plant December 2017 - 35
Efficient Plant December 2017 - 36
Efficient Plant December 2017 - 37
Efficient Plant December 2017 - 38
Efficient Plant December 2017 - 39
Efficient Plant December 2017 - 40
Efficient Plant December 2017 - 41
Efficient Plant December 2017 - 42
Efficient Plant December 2017 - 43
Efficient Plant December 2017 - 44
Efficient Plant December 2017 - 45
Efficient Plant December 2017 - 46
Efficient Plant December 2017 - 47
Efficient Plant December 2017 - 48
Efficient Plant December 2017 - 49
Efficient Plant December 2017 - 50
Efficient Plant December 2017 - 51
Efficient Plant December 2017 - 52
Efficient Plant December 2017 - 53
Efficient Plant December 2017 - 54
Efficient Plant December 2017 - 55
Efficient Plant December 2017 - 56
Efficient Plant December 2017 - 57
Efficient Plant December 2017 - 58
Efficient Plant December 2017 - 59
Efficient Plant December 2017 - 60
Efficient Plant December 2017 - 61
Efficient Plant December 2017 - 62
Efficient Plant December 2017 - 63
Efficient Plant December 2017 - 64
Efficient Plant December 2017 - Cover3
Efficient Plant December 2017 - Cover4
https://www.nxtbook.com/atp/MaintenanceTechnology/efficient-plant-jan-feb-2024
https://www.nxtbook.com/atp/MaintenanceTechnology/efficient-plant-april-2022
https://www.nxtbook.com/atp/MaintenanceTechnology/efficient-plant-october-2021
https://www.nxtbook.com/atp/MaintenanceTechnology/efficient-plant-june-2021
https://www.nxtbook.com/atp/MaintenanceTechnology/epapril2021
https://www.nxtbook.com/atp/MaintenanceTechnology/epmarch2021
https://www.nxtbook.com/atp/MaintenanceTechnology/epjanfeb2021
https://www.nxtbook.com/atp/MaintenanceTechnology/epjulyaug2020
https://www.nxtbook.com/atp/MaintenanceTechnology/epjune2020
https://www.nxtbook.com/atp/MaintenanceTechnology/epmay2020
https://www.nxtbook.com/atp/MaintenanceTechnology/epapril2020
https://www.nxtbook.com/atp/MaintenanceTechnology/epmarch2020
https://www.nxtbook.com/atp/MaintenanceTechnology/epfeb2020
https://www.nxtbook.com/atp/MaintenanceTechnology/epjan2019
https://www.nxtbook.com/atp/MaintenanceTechnology/epnovdec2019
https://www.nxtbook.com/atp/MaintenanceTechnology/epseptoct2019
https://www.nxtbook.com/atp/MaintenanceTechnology/epmay2019
https://www.nxtbook.com/atp/MaintenanceTechnology/epapril2019
https://www.nxtbook.com/atp/MaintenanceTechnology/epmarch2019
https://www.nxtbook.com/atp/MaintenanceTechnology/epfebruary2019
https://www.nxtbook.com/atp/MaintenanceTechnology/epjanuary2019
https://www.nxtbook.com/atp/MaintenanceTechnology/epdecember2018
https://www.nxtbook.com/atp/MaintenanceTechnology/epnovember2018
https://www.nxtbook.com/atp/MaintenanceTechnology/epoctober2018
https://www.nxtbook.com/atp/MaintenanceTechnology/epseptember2019
https://www.nxtbook.com/atp/MaintenanceTechnology/epaugust2018
https://www.nxtbook.com/atp/MaintenanceTechnology/0818schneider
https://www.nxtbook.com/atp/MaintenanceTechnology/epjuly2018
https://www.nxtbook.com/atp/MaintenanceTechnology/epjune2018
https://www.nxtbook.com/atp/MaintenanceTechnology/epmay2018
https://www.nxtbook.com/atp/MaintenanceTechnology/epapril2018
https://www.nxtbook.com/atp/MaintenanceTechnology/epmarch2018
https://www.nxtbook.com/atp/MaintenanceTechnology/epfebruary2018
https://www.nxtbook.com/atp/MaintenanceTechnology/epjanuary2018
https://www.nxtbook.com/atp/MaintenanceTechnology/epdecember2017
https://www.nxtbook.com/atp/MaintenanceTechnology/epnovember2017
https://www.nxtbook.com/atp/MaintenanceTechnology/epoctober2017
https://www.nxtbook.com/atp/MaintenanceTechnology/mtsept2017
https://www.nxtbook.com/atp/MaintenanceTechnology/mtaugust2017
https://www.nxtbook.com/atp/MaintenanceTechnology/mtjuly2017
https://www.nxtbook.com/atp/MaintenanceTechnology/mtjune2017
https://www.nxtbook.com/atp/MaintenanceTechnology/mtmay2017
https://www.nxtbook.com/atp/MaintenanceTechnology/mtapril2017
https://www.nxtbook.com/atp/MaintenanceTechnology/mtmarch2017
https://www.nxtbook.com/atp/MaintenanceTechnology/mtfebruary2017
https://www.nxtbook.com/atp/MaintenanceTechnology/mtjanuary2017
https://www.nxtbook.com/atp/MaintenanceTechnology/mtdecember2016
https://www.nxtbook.com/atp/MaintenanceTechnology/mtnovember2016
https://www.nxtbook.com/atp/MaintenanceTechnology/mtoctober2016
https://www.nxtbook.com/atp/MaintenanceTechnology/mtseptember2016
https://www.nxtbook.com/atp/MaintenanceTechnology/mtaugust2016
https://www.nxtbook.com/atp/MaintenanceTechnology/mtjuly2016
https://www.nxtbook.com/atp/MaintenanceTechnology/mtjune2016
https://www.nxtbook.com/atp/MaintenanceTechnology/mtmay2016
https://www.nxtbook.com/atp/MaintenanceTechnology/mtapril2016
https://www.nxtbook.com/atp/MaintenanceTechnology/mtmarch2016
https://www.nxtbook.com/atp/MaintenanceTechnology/mtfebruary2016
https://www.nxtbook.com/atp/MaintenanceTechnology/mtjanuary2016
https://www.nxtbook.com/atp/MaintenanceTechnology/mtdecember2015
https://www.nxtbook.com/atp/MaintenanceTechnology/mtnovember2015
https://www.nxtbook.com/atp/MaintenanceTechnology/mtoctober2015
https://www.nxtbook.com/atp/MaintenanceTechnology/mtseptember2015
https://www.nxtbook.com/atp/MaintenanceTechnology/MTAugust2015
https://www.nxtbook.com/atp/MaintenanceTechnology/MTJuly2015
https://www.nxtbook.com/atp/MaintenanceTechnology/MTJune2015
https://www.nxtbook.com/atp/MaintenanceTechnology/M
https://www.nxtbook.com/atp/MaintenanceTechnology/0415endress
https://www.nxtbook.com/atp/MaintenanceTechnology/MTApril2015
https://www.nxtbook.com/atp/MaintenanceTechnology/MTMarch2015
https://www.nxtbook.com/atp/MaintenanceTechnology/MTFebruary2015
https://www.nxtbook.com/atp/MaintenanceTechnology/MTJanuary2015
https://www.nxtbook.com/atp/MaintenanceTechnology/MTDecember2014
https://www.nxtbook.com/atp/MaintenanceTechnology/MTNovember2014
https://www.nxtbook.com/atp/MaintenanceTechnology/MTOctober2014
https://www.nxtbook.com/atp/MaintenanceTechnology/MTSeptember2014
https://www.nxtbook.com/atp/MaintenanceTechnology/MTAugust2014
https://www.nxtbook.com/atp/MaintenanceTechnology/MTJuly2014
https://www.nxtbookmedia.com