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Coordination Aspects of Supply Chain Management for Spare Parts

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Coordination Aspects of Supply Chain Management for Spare Parts Coordination Aspects of Supply Chain Management for Spare Parts Von der Fakultät für Ingenieurwissenschaften, Abteilung Maschinenbau und Verfahrenstechnik der Universität Duisburg-Essen genehmigte Dissertation zum Erwerb des akademischen Grades eines Doktors der Wirtschaftswissenschaften Dr. rer. pol. von Shivangi Verma aus Saharanpur, Indien Tag der mündlichen Prüfung: 12.06.2018 1. Gutachter: Univ. -Prof. Dr. rer. pol. Andreas Wömpener 2. Gutachter: Univ. -Prof. Dr. Ing. Bernd Noche Abstract Abstract A malfunctioning or failed part in a machine must be replaced as soon as possible with the same or a similar functioning part. On the one hand, it is required to have enough parts in stock to address customer requirements and avoid expensive downtimes and on the other hand, capital gets tied up in the form of non-revenue generating inventories. Finding the balance between servicing customers and reducing inventory costs is an imminent struggle for organisations large and small. This study aims at categorising spare parts into groups based on their characteristics like replenishment lead time, functional importance, unit costs etc. so as to determine the ‘optimal’ inventory policy for each group. Simulation optimisation methodology is developed for this problem of the two conflicting interests of service level and total costs and is implemented using MATLAB software. The program proposes the best inventory policy for all spare parts within a group and at the same time suggests the respective inventory policy parameters for each part within the group. The methodology is illustrated using an example with self-generated spare parts data. The thesis thus develops a structured approach to managing spare parts and helps to move from intuition-based to data-based inventory management and ordering behaviour for spare parts, that in some cases may cost millions of Euros. I Abstract Zusammenfassung Eine fehlerhaftes oder ein versagendes Teil in einer Maschine muss so schnell wie möglich mit demselben oder einem ähnlich funktionierenden Teil ersetzt werden. Auf der einen Seite ist kundenseitig gefordert, genügend Teile auf Lager zu haben, um kostenintensive Maschinenstillstandszeiten zu vermeiden und auf der anderen Seite wird dadurch Kapital ohne Generierung von Umsatz in Form von Lagerbeständen gebunden. Die Balance, den Anforderungen des Kundenservices und gleichzeitig der Reduktion von Lagerbestandskosten zu genügen, ist eine große Herausforderung für kleine wie große Unternehmen. Diese Studie zielt auf die Kategorisierung von Ersatzteilen in Gruppen ab, basierend auf Charakteristika wie Wiederbeschaffungszeit, funktionale Bedeutung und Stückkosten, um so die "optimale" Lagerbestandspolitik je erstellter Gruppe zu bestimmen. Die Methodik der simulationsbasierten Optimierung wird für das Problem von den beiden in Konflikt stehenden Interessen von Service Level und Gesamtkosten entwickelt und durch die Software MATLAB umgesetzt. Das Programm schlägt die beste Lagerbestandspolitik für alle Ersatzteile innerhalb einer Gruppe vor und empfiehlt gleichzeitig die entsprechenden Parameter der Lagerbestandspolitik für jedes Teil innerhalb einer Gruppe. Die Methodik wird anhand eines Beispiels von selbst generierten Ersatzteil- Daten dargestellt. Der Ansatz stellt eine strukturierte Vorgehensweise für die Handhabung von Ersatzteilen dar und trägt zu einen Übergang von einer intuitiven zu einer datenbasierten Lagerbestandshandhabung sowie des Bestellverhaltens für Ersatzteile bei. II Acknowledgement Acknowledgements My sincere gratitude to Prof. Dr. Andreas Wömpener and Prof. Dr. Bernd Noche for taking over the responsibility of supervising my research work at a crucial time. A simple ‘thank you’ is not enough to express my gratitude to my husband, my parents and parents-in-law and my brother. Whatever I do is only for you all. Sincere thanks to my colleagues and friends at the department, who not only enriched this thesis my raising the correct questions and answering mine but also by providing sincere feedback throughout the years. I am grateful to DAAD (German Academic Exchange Service) for funding my research work in the form of a scholarship. I dedicate this thesis to my beloved ‘Doctorvater’, late Prof. Dr. Rainer Leisten. His dedication, sincerity and hard work is difficult to replicate and although he left all of us too early, he will always be very present in our memories. I also dedicate this thesis to my late maternal grandmother Mrs. Madhuri Sinha. Her continuous love and motivation helped me through some difficult phases of my research work. I bow my head in respect to that higher power, guiding all of us. Mera shat shat Pranam! III Table of Contents Table of contents Abstract .......................................................................................................................... I Zusammenfassung ........................................................................................................ II Acknowledgements ..................................................................................................... III Table of contents ......................................................................................................... IV List of figures .............................................................................................................. VI List of tables ............................................................................................................. VIII List of abbreviations .................................................................................................... IX List of symbols ............................................................................................................ XI CHAPTER 1 – INTRODUCTION ............................................................................... 1 CHAPTER 2 - RESEARCH CONTEXT ...................................................................... 4 2.1 Spare parts ........................................................................................................... 4 2.2 Spare parts management ..................................................................................... 6 2.2.1 Importance of spare parts management........................................................ 7 2.2.2 Challenges in spare parts management ........................................................ 8 CHAPTER 3 – LITERATURE REVIEW .................................................................. 15 3.1 Spare parts classification ................................................................................... 15 3.1.1 Criteria for spare parts classification.......................................................... 16 3.1.2 Methodology for spare parts classification ................................................ 22 3.1.3 Cut-off values ............................................................................................. 27 3.2 Spare parts demand and forecasting .................................................................. 28 3.3 Spare parts inventory management models....................................................... 35 3.4 Classification for effective inventory management .......................................... 42 3.5 Simulation methods for spare parts management ............................................. 45 3.6 Existing gaps in literature and research objectives ........................................... 48 IV Table of Contents CHAPTER 4 – DEVELOPING A PROTOTYPE OF SPARE PARTS SUPPLY CHAIN ........................................................................................................................ 51 4.1 Spare parts supply chain – a model ................................................................... 51 4.2 Long term planning tasks .................................................................................. 55 4.3 Mid-term planning tasks ................................................................................... 58 4.4 Short-term planning tasks ................................................................................. 60 4.5 Three stages of spare parts planning ................................................................. 62 CHAPTER 5 –SPARE PARTS CLASSIFICATION MODEL .................................. 64 5.1 AHP analysis for part criticality ........................................................................ 64 5.1.1 Criteria for part criticality .......................................................................... 65 5.1.2 Alternatives for criteria .............................................................................. 66 5.2 Demand pattern analysis ................................................................................... 70 5.3 Proposed classification model ........................................................................... 71 CHAPTER 6 - SIMULATION OPTIMIZATION MODEL ...................................... 76 6.1 Model assumptions ........................................................................................... 77 6.2 Input and output parameter definition ............................................................... 78 6.3 Simulation model .............................................................................................. 80 6.4 Optimization model ........................................................................................... 97 6.5 Operational process flowchart........................................................................... 98 CHAPTER 7 – VALIDATION OF MODEL ..........................................................
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