Research On The Spare Parts Inventory Management System Of Company A

Spare parts are not intermediate or final products to be sold to a customer, and the policies that govern spare parts inventory are different from those that govern raw material, semi-finished goods and finished goods. As a part of the company's inventory and asset management, the spare parts inventory management supports the equipment maintenance and plant alteration. It also ensures the successful start-up of the company's new facility and the smooth operation of the existed plant. The function of spare parts inventory is to assist a maintenance staff in keeping equipment in a good operating condition. For the petrochemical and other capital centralized industries, a good spare parts inventory management system will ensure the smooth operation of equipment, reduce costs, lower line down lost and increase operating profit. Company A is a newly operated petrochemical complex. It adopted the experienced and advanced spare parts inventory management system of Company S by applying the best practice. It also uses SAP management information system to manage the spare parts and other business of the company. This paper studies the spare parts business process, spare parts classification management, spare parts management in the project stage, spare parts material requirement planning, physical inventory and spare parts management information system in Company A. The spare parts inventory performance is measured based on the operation data in Aug 2006 in Company A. This paper compares the physical performance in Aug 2006 with the best performance in the petrochemical industry and the year 2007 spare parts inventory performance goal in Company A. Based on the current status of the spare parts inventory management in Company A, this paper also analyzes the spare parts inventory management problems and reasons. Improvement suggestions and steps for the spare parts inventory management in Company A are put forward. The improvement of spare parts inventory management shall be a continuous and progressional process. This paper will assist Company A to improve its spare parts inventory management system and performances. This paper could also be a reference for companies in the petrochemical or other capital centralized industries.