Spare Parts Strategy: A Multi-Criteria Systematic Classification Approach To Reduce Inventory Cost

Abstract

Efficient and effective spare parts management play an essential role for equipment-intensive companies, and many of them struggle with spare parts management issues. Asset and maintenance managers are continuously challenged by decisions involved risk and cost related to a large number of the difference in type and complex in nature spare items. The spare parts nature is formed by a variety of factors such as lead time, operation impact and part cost. One technique of managing these large items is by adopting a systematic classification method to rank the criticality of each item. This classification method is an approach to support management taking the right decision and develop the proper inventory policy. This project is proposing the application of an effective multi-criteria spare parts classification approach. The proposed method is using the analytic hierarchy process (AHP) along with vital, essential and desirable (VED) classification method. The proposed method was tested in a sample of spare part, and the results have shown the applicability of such method in managing spare part.