spare part management

A study on Spare parts Management at HLL

CHAPTER-1

INTRODUCTION

TKM Institute of Management 1


INTRODUCTION

Hindustan Latex Ltd. (HLL), a Government of India Enterprise under the ministry of

Health and Family Welfare is the leading producer of contraceptives and Health care

products. The study was undertaken in the Health care division of HLL at Akkulam,

Trivandrum. The aim of the study is to get the exposure to the practical issues in the spare

parts management.

The advent, through altruism or legislation, of environmental management has added a

new dimension to inventory management-reverse supply chain logistics. Environmental

management has expanded the number of inventory types that firms have to coordinate.

In addition to raw materials, work-in-process, finished goods, and MRO goods, firms

now have to deal with post-consumer items such as scrap, returned goods, reusable or

recyclable containers, and any number of items that require repair, reuse, recycling, or

secondary use in another product .Instead of managing one's inventory to maximize profit

and minimize cost for the individual firm, today's firm has to make inventory decisions

that benefit the entire supply chain.

Spare parts are a term used to indicate extra parts available and in proximity to the

mechanical item, for which they might be used. Every activity affects and is influenced

by numerous factors either directly or indirectly in varying degrees. Planning is just a

means to make working easier, by eliminating those factors which have a lesser influence

and thereby paving a path having fewer related factors to control and concentrate upon.

But in the case of spare parts management, even factors having direct influence are not

static and change from time to time depending upon the operating and environmental

conditions

Spare parts refer to those parts which are identical with some parts in the machine but in

general their life is less than the operating life of the machine itself and often requires

replacement at a shorter notice. Most of them include items such as bearings, gears,

filters, axles, rotors, V-belts etc, the chief characteristic of which is that they are meant

for specialized use in one or limited number of equipment. They are further classified by



longer procurement lead time, lower usage rate, uncertain demand, and also there are

difficulties in predicting their behavior and at times in identifying them.

In spite of the challenging nature of the maintenance management problem, the service

function of the maintenance which is also the service function to maintenance

management have not attracted sufficient attention of top management. Supply of spare

parts is not considered a problem to elite management and is generally delegated to

people at the lower levels in the management hierarchy. This attitude has led many

industries to possess a high level of spare parts inventories which is of slow and non

moving nature which is affecting the efficiency of the spare parts management and

thereby inventory management.

The important factors that influence spare parts planning are:

Location-If the factory is located in backward area or far from industrial centers,

national highways, railway lines, then it is in less favorable position and is bound

to carry more stock to account for transport delays.

Government regulation for imports available of foreign currency, import license,

custom regulations, credit control etc

Sophisticated industry and degree of automation-The more automated or

sophisticated an industry the service the stock will be more. If the production can

be temporarily transferred to another machine if break down occurs, then it is not

so critical resulting in less stock.

Lead time: It is obvious that longer the lead time more will be inventory. The lead

time in most organization both public and private sectors do not estimate on

scientific way. The total lead time for spare parts found to very from 6 to 8

months for the indigenous parts and from 24 to 36 months for imported items.

Service level

The user of the mechanical item, which might require the parts, may overlook the

economic considerations and economic considerations. But without the spare part on

hand, a company's customer satisfaction levels could drop if a customer has to wait too

long for their item to be fixed. Therefore company's need to plan and align their service

parts inventory and workforce resources to achieve optimal customer satisfaction levels

with minimal costs.


http://en.wikipedia.org/wiki/Workforce


1.1 INDUSTRY PROFILE

HLL at Akkulam is the Health care division. Health as one of the Fundamental Human

Right, has been accepted in the Indian Constitution. Although Article 21 of the

Constitution requires the State to ensure the health and nutritional well being of all

people, the Federal Government has a substantial technical and financial role in the

sector. Due to growing importance of healthcare industry, it has been conferred with the

Infrastructure status under section 10 (23G) of the Income Tax Act,

The Indian healthcare sector constitutes:

Medical care providers: physicians, specialist clinics, nursing homes and hospitals

and

Diagnostic service centers and pathology laboratories,

Medical equipment manufacturers,

Contract research organizations (CRO's), pharmaceutical manufacturers,

Third party support service providers (catering, laundry)

Before independence the health care sector was in dismal condition with high morbidity

and mortality rates and prevalence of infectious diseases. Since independence emphasis

has been put on Primary Health Care and India has worked continuously to improve its

health care system in the last several decades. Considerable progress has been made in

expanding the public system and reducing the burden of disease. But the government

funded facilities were not enough to meet to the growing demand of population, whether

it was primary, secondary or tertiary care, which necessitated the need for alternate

source of funding in the healthcare sector.

Post Liberalization, in the 1980's the entry norms for Private players in the Health

services industry was relaxed by the Government. The private healthcare facilities are

owned and run by for-profit companies, non-profit or charitable organizations. The entry

of private sector has opened a gamut of opportunities for India in terms of Medical

Equipment, Information technology in health services, BPO, Telemedicine and Medical



and Health Tourism. An estimated 100,000 "Medical Tourists" visited India last year,

representing a 20 per cent jump over the previous year.

Today the healthcare industry has emerged as one of the most challenging sectors as well

as one of the largest service sector industries in India with estimated revenue of about $

30 billion (FY 2005) constituting 5% of the GDP. The Indian Health Services sector is

estimated to be around Rs. 750 billion with hospitals accounting for more than half of

this. The sector has had a growth of over 12% p.a. in the past four years and is estimated

to grow by 170% by 2012.

Though the private sector has been responsible in bringing about the desired changes in

the health industry, the health sector performance requires much improvement in

comparison with other emerging economies, including most comparable nations in the

region. Deficiencies persist with respect to access, affordability, efficiency, quality and

effectiveness, despite the high level of overall private and public expenditure on health.

Growth of health care in India

India's healthcare sector has been growing rapidly and estimated to be worth US$ 40

billion by 2012, according to Price water house Coopers in its report, 'Healthcare in

India: Emerging market report 2007'. Revenues from the healthcare sector account for 5.2

per cent of the GDP, making it the third largest growth segment in India.

The sector's growth will be driven by the country's growing middle class, which can

afford quality healthcare. Over 150 million Indians have annual incomes of more than

US$ 1,000, and many who work in the business services sector earn as much as US$

20,000 a year. Today at least 50 million Indians can afford to buy Western medicines-a

market only 20 per cent smaller than that of the UK.

The growing purchasing power of Indian patients is revealed in the increased business of

air ambulance services. Around 365 airliftings worth several millions of rupees happen in

Delhi in a year on average.



If the economy continues to grow faster than the economies of the developed world, and

the literacy rate keeps rising, much of western and southern India will be middle class by

2020.

To meet this demand, the country needs US$ 50 billion annually for the next 20 years,

says a CII study. India needs to add 2 million beds to the existing 1.1 million by 2027,

and requires immediate investments of US$ 82 billion.

Funds in the sector have been largely private. In fact, it is believed that the private sector

provides 60 per cent of all outpatient care in India and as much as 40 per cent of all in-

patient care. It is estimated that nearly 70 per cent of all hospitals and 40 per cent of

hospital beds in the country are in the private sector, says PWC.

1.2 COMPANY PROFILE

Hindustan Latex’s (HLL) journey started with its incorporation as a corporate entity

under the Ministry of Health and Family Welfare of the Government of India on March

1, 1966. HLL was set up in the natural rubber rich state of Kerala, for the production of

male contraceptive sheaths for the National Family Planning Programme.

The company commenced its commercial operations on April 5, 1969 at Peroorkada in

Trivandrum. The Plant was established in technical collaboration with Okamoto

Industries Inc. Japan.Two most modern Plants were added, one at Thiruvananthapuram

and the other at Belgaum in 1985. With a vast array of innovative products and social

programmes launched, Hindustan Latex Ltd. (HLL) is year after year taking a step closer

to its vision of “Innovating for Healthy Generations”. HLL is today a multi-product,

multi-unit organization addressing various public health challenges facing humanity.

Hindustan Latex is the only company in the world manufacturing and marketing the

widest range of Contraceptives. It is unique in providing a range of Condoms,

including Female Condoms, Intra Uterine Devices, Oral Contraceptive Pills - steroidal,

non-steroidal and Emergency Contraceptive pills; Contraceptive Cream, and Tubal

Rings.



HLL’s Health care product range include: Blood Collection Bags, Surgical Sutures,

Auto Disable Syringes, Vaccines, Women’s Health Care Pharma products, In - Vitro

Diagnostic Test Kits, Hydrocephalus Shunt, Tissue Expanders, Needle Destroyers, Blood

Bank equipment, Iron and Folic Acid Tablets, Sanitary Napkins, and Oral Rehydration

Salts.

Over the past sixteen years HLL has steadily set up a strong and sound infrastructure for

direct marketing. HLL has put in place a vast distribution network covering the length

and breadth of the country. HLL’s products today reach over five lakh retail outlets,

including over a lakh villages, in the remotest corners of the nation. HLL’s products are

today exported to over 70 countries.

HLL’s association with world leaders include those with Okamoto of Japan; Finishing

Enterprises, USA; Becton and Dickinson, USA; Female Health Company, USA; Gambro

BCT, Sweden and Beijing Zizhu Pharma of China.

HLL has three state of the art manufacturing facilities with ISO 9001, ISO 14001- quality

and environmental management system certifications. HLL’s Peroorkada Plant was also

awarded the OHSAS 18001 Certification for its efficient Occupational Health and Safety

Management System. Products manufactured at its Plants also have the ‘CE’ marking.

HLL is investing heavily in the area of Research and Development. It is setting up a

national centre for Research in the area of Contraceptive products

The Company has achieved a turnover of Rs. 244 crores during the last financial year -

2006-07 and a profit after tax of Rs. 20.06 crores.

HLL – A World wide provider of Contraceptives and Health Care Products

HLL is today the leading provider of contraceptive and health care products for various

public health programmes managed by international agencies like – UNFPA, Mission

Pharma, PSI and IDA. HLL is partnering with the Government of India in the National



Rural Health Mission, Reproductive and Child Health Project and the National AIDS

Control Programme.

Employee Initiatives

The industrial relations scenario in all the Company’s Units has been excellent and no

man-days were lost on account of any industrial disputes. Training and Development to

enhance skill, knowledge and competency levels are an ongoing process in the company.

Corporate Vision & Plans ahead

HLL has drawn up a comprehensive plan to expand its portfolio in the area of Health

Care and Contraceptives - its core areas, to achieve rapid growth. The objective is to

achieve through this process a turnover of Rs.1000 crores by 2010.

With nearly 1900 highly skilled and learned manpower, and several world leaders as

partners, HLL has over the past four decades stood to uphold its mission to achieve and

sustain a high growth path, and focus on five key thrust areas to achieve its vision. These

are - customers, employees, business, innovation and social initiatives.

In the future, through technical collaborations, marketing alliances and joint ventures,

HLL wishes to keep alive the dream of all humanity - of a healthier, happier world.

Motto, Vision and Mission

Motto

Innovating for Healthy Generations.

Vision

HLL will establish itself as the Leader in its core activities, through a process of

continuous innovation and participatory approach in order to -

Provide best value to the customer.

Be an employer of choice.

Promote the cause of family health in general, and women's health in particular

Mission



To accomplish the Corporate Vision, HLL has outlined a Mission to be a World Class

Health Care Company by the year 2010, with focus on five key areas, namely

* Business * Customer * Innovation * Employee * Social Sector initiatives.

Business Leadership:-

Attain rapid growth and global levels of operations with cost competitiveness.

Be among the top three players in each main product category.

Become the organization to be benchmarked with.

Become an acknowledged and admired leader at industry forums.

Customer Focus:-

Focus on quality and customer delight at all time

Innovation:-

Establish core competence through a process of learning and innovation.

Create a culture of continuous innovation resulting in at least 10% of turnover from

Research and Development initiative.

Employee Satisfaction:-

Strive to be the employer of choice in India with employee satisfaction levels of over

90%.

Social Sector Initiatives:-

Be recognized as the leading social organization in the field of Reproductive and

Women's Health, with a commitment to the society - a partner of choice for

implementing all government and multi-lateral initiatives in these segments

Origin and History

To trace briefly, HLL’s landmarks in the 40th year since its formation:

1966 - Incorporated as a company under the Ministry of Health and Family Welfare of

the Government

Of India on 1st March, 1966.

1969 - Commences on April 5, commercial production of Condoms at its plant at

Thiruvananthapuram. Production capacity – 144 million pieces a year.

1976 - Production capacity doubled with the addition of two more lines in the moulding

section. Production capacity doubles to 288 million pieces.



1985 - The addition of the plants at Belgaum and Thiruvananthapuram with the latest

state-of-art Japanese Technology, raises HLL’s total Condom production capacity to 800

million pieces a year.

1991 - HLL recognized as a MOU signing organization by the Government of India.

HLL granted the 510(k) Certification by Food and Drug Administration (FDA) of the US,

needed for export of its Condoms to the USA.

1992 - Diversifies into manufacture of Surgical & Examination Gloves. Commences

formulation and tabletting of Saheli once-a-week pill at Belgaum.

1993 - Plant for formulation and tabletting of Mala-D Oral pills, commissioned at

Belgaum.

1994 - Commences production of Copper-T Intra-Uterine device at its Aakkulam plant.

Commences commercial production of Ceredrain Hydrocephalus Shunts.

1994-1995 - Introduces Surgical, Synthetic and Catgut Sutures.

1995-1996 - Introduces HL-Haemopack Blood Transfusion Bags. HLL awarded the NF

mark by the Laboratoire National D’essais, France, which is the certification required for

export of its Condoms to the European Nations.

1996 - HLL granted ISO 9002 - for its efficient Quality Management Systems - for its

Peroorkada plant manufacturing Condoms, and Aakkulam plant manufacturing Blood

Bags, Copper-T and Hydrocephalus Shunt.

1997 - HLL, the only Company from India selected by WHO for obtaining their

requirements of Condoms-for reaching countries worldwide.

1998 - HLL Peroorkada plant granted the prestigious CE mark- the prime requisite for

export of Condoms to the European Economic Community (from June 1998) - by

GMED, France, the official French Certification Agency.

HLL’s Akkulam plant also receives the CE mark from SGS Yarsley International

Certification Services, UK for its Blood Bags.

Hindustan Latex Family Planning Promotion Trust (HLFPPT) commences several social

marketing projects and services all over the country.



1999-2000 - Receives MOU award and Certificate of merit from the Vice President of

India, for excellence in the achievement of MOU targets. HLL’s Akkulam plant receives

ISO 14001 certification.

2002 - HLL’s Peroorkada plant and Belgaum plant awarded the ISO 14001 certifications.

2003 - HLL received on April 5, 2003, the MOU award of the Government of India, from

His Excellency the President of India Dr. A. P. J. Abdul Kalamji, for excellence in the

achievement of MOU targets for 2001-2002. Achieves highest turnover of Rs. 150

Crores. Records highest profits (PBDIT) of Rs. 20.30 Crores.

HLL commences trial production of Surgical Sutures and Tissue Expanders at its plant at

Akkulam in Thiruvananthapuram.

During 2002-2003 - HLL exported Rs.13 Crores worth of its Condoms, Blood Bags,

Hydrocephalus Shunts, and Latex Gloves to over 60 countries around the world.

2004- Launched Moods condoms in the Middle East on January 22.HLL’s Female

Condom launched on February 13, 2004, by the Secretary, Dept. of Family Welfare Sri

P.K. Hota, IAS at New Delhi. Records the highest turnover yet of Rs. 162.54 crores and

profits (after tax) of Rs.18.81 crores.

2005-HLL’s Peroorkada Plant at Thiruvananthapuram awarded the Golden Peacock

National Quality Award by the Institute of Directors, on the occasion of the 15th World

Congress on Total Quality organized at Mumbai on January 14, 2005.

2006 - Sri P. K. Hota IAS, Union Secretary for Health & Family Welfare, launches the

Women’s Health Care Pharma Division Products at a special function at Trivandrum on

13th January, 2006. HLL receives the National Award for Excellence in Cost

Management. Instituted by ICWAI at a special function at New Delhi on25th January,

2006.

HLL ties up with SUPPLYCO in Kerala for the distribution of its products through their

outlets all over the state. Sri C. Divakaran, Minister for Food and Civil Supplies,



Government of Kerala received the first pack of HLL products, from HLL’s C&MD Sri

M. Ayyappan on 9th November, 2006.

Production Facility

HLL started commercial production of condoms in 1969 at its manufacturing plant at

Peroorkada, Thiruvananthapuram, Kerala state, south India, with the assistance using

Japanese technology. Over the years HLL has grown rapidly and diversified into the

manufacturing of other health care products and had built up two more plants.

One at Akkulam, Thiruvananthapuram, Kerala state, south India for the manufacture of

Blood Bags, Copper T, Hydrocephalus Shunts, Surgical sutures, Tissue expanders and

the other at Kanagala, Belgaum, Karnataka State, south India, for the manufacture of

condoms and contraceptive pills. All these plants use modern state of the art production

facilities.

Akkulam plant

HLL's modern state of the art facility for the manufacture of medical devices Copper - T,

Blood Bags, Hydrocephalus Shunts, Surgical Sutures Tissue Expander and Tubular

Rings.

The manufacturing facility is centrally air - conditioned and has class 10000 and class

100 clean areas. The facility is certified for conformance to ISO 9001, WHO GMP and

ISO 14001. The annual installed capacity of this unit is 5 million pieces for Blood Bags,

5.5 million pieces for Copper T 10,000 pieces for Shunts, 2000 pieces of Tissue

Expander, 1.5 million pieces of surgical sutures and 5 million pieces of Tubular

Ring .The strength of this state of the art manufacturing facility lies in its commitment to

Total Quality Management. Quality Systems Building a company with a world class

quality



At Hindustan Latex Limited, delivering value to our customers is our primary objective.

Our customers count on us to deliver quality products on time, every time. We believe

that by utilizing our quality processes, we will provide added value to the product, which

our customers require and deserve. We achieve this goal by focusing on our Quality

Policy and unending commitment to our customers.

Quality Policy

Hindustan Latex Limited is committed to:

Provide products and services, conforming to international standards in the

healthcare area to the complete satisfaction of all customers and for building

healthy generations.

Achieve a high standard of personal, corporate and business excellence through

continual improvement, human resource development and teamwork.

Market the products and services of the company globally on the strength of

innovation, quality, cost and delivery.

Meet all statutory & regulatory requirements and be an organization with Good

Corporate Governance and Corporate Social Responsibility.

Safety, Health and Environment (SHE) policy

Hindustan Latex Limited is committed to:

Protect environment, prevent pollution and eliminate occupational health and

safety risks through continuous monitoring and control of the impact of its

activities, products or services on a continual basis.

Comply with all legal and other requirements, with respect to the organization's

activities.

Encourage concern and respect for the environment, health and safety of

employees and subcontractors and adopt appropriate operating practices and

training for the same.



Set measurable objectives for continual improvement.

Conserve raw materials, energy & reduce waste at source.

Extend all support to agencies for creating awareness regarding good

environment, health and safety policy to the public.

1.3 PRODUCT PROFILE

Health Care Product Division –AKKULAM PLANT

The Health Care Business Unit of HLL is responsible for the marketing of health care

products. Products handled by HCBU are targeted at Blood Banks, Corporate & Private

Hospitals, Government Hospitals etc. HLL has a dedicated team of sales personnel for

covering the blood banks in India. HCBU also collaborates with various voluntary bodies

for organizing blood donation camps. Organizing technical sessions for blood banking

professionals is a regular activity carried by HCBU for up gradation and sharing of

knowledge. HCBU has a wide distribution network covering all the towns in the country

for reaching their products to the customers in an effective and efficient manner.

The major products under this division are Blood bags, Hydrocephalus shunts, Surgical

Sutures, Gloves and Needle destroyers.



CHAPTER-2

LITERATURE REVIEW



INVENTORY MANAGEMENT

Inventory is the stock of any item or resource used in an organization. An inventory

System is a set of policies and controls that monitors levels of inventory and determine

what levels should be maintained, when stock should be replenished, and how large

orders should be.

Manufacturing Inventory refers to items that contribute to or to become part of a firm’s

product output. Manufacturing Inventory is typically classified into raw materials,

finished products, component parts, supplies and work-in-process.

The basic purpose in inventory analysis in manufacturing and stock keeping services is

to:

(1) When items should be ordered and

(2) How large the order should be

Many firms are tending to enter into longer-term relationships with vendors to supply

their needs for a year and this changes the “when” and “how many order” to “when” and

“how many to deliver”.

What is Inventory?

Inventory is a quantity or store of goods that is held for some purpose or use (the term

may also be used as a verb, meaning to take inventory or to count all goods held in

inventory). Inventory may be kept "in-house," meaning on the premises or nearby for

immediate use; or it may be held in a distant warehouse or distribution center for future

use. With the exception of firms utilizing just-in-time methods, more often than not, the

term "inventory" implies a stored quantity of goods that

exceeds what is needed for the firm to function at the current time (e.g., within the next

few hours).

Why keep Inventory?

The following is a list of reasons for maintaining what would appear to be "excess"

inventory.



January February March April May June

Demand 50 50 0 100 200 200

Produce 100 100 100 100 100 100

Month-end inventory 50 100 200 200 100 0

Meet Demand.

In order for a manufacturer to stay in business, it must have the products that the

customer wants on hand when the customer wants them. And more over the raw

materials and other items required for the production must be available in the inventory

for meeting the dependent and independent demand. Hence, in many instances, if a good

is not in inventory, a sale is lost forever.

Keep operations running.

A manufacturer must have certain purchased items (raw materials, components, or

subassemblies) in order to manufacture its product. Running out of only one item can

prevent a manufacturer from completing the production of its finished goods. Inventory

between successive dependent operations also serves to decouple the dependency of the

operations. A machine or work center is often dependent upon the previous operation to

provide it with parts to work on. If work ceases at a work center, then all subsequent

centers will shut down for lack of work. If a supply of work-in-process inventory is kept

between each work center, then each machine can maintain its operations for a limited

time, hopefully until operations resume the original center.

Lead time.

Lead time is the time that elapses between the placing of an order (either a purchase order

or a production order issued to the shop or the factory floor) and actually receiving the

goods ordered. If a supplier (an external firm or an internal department or plant) cannot

supply the required goods on demand, then the client firm must keep an inventory of the

needed goods. The longer the lead time, the larger the quantity of goods the firm must

carry in inventory.



Hedge.

Inventory can also be used as a hedge against price increases and inflation. Salesmen

routinely call purchasing agents shortly before a price increase goes into effect. This

gives the buyer a chance to purchase material, in excess of current need, at a price that is

lower than it would be if the buyer waited until after the price increase occurs.

Quantity discount.

Often firms are given a price discount when purchasing large quantities of a good. This

also frequently results in inventory in excess of what is currently needed to meet demand.

However, if the discount is sufficient to offset the extra holding cost incurred as a result

of the excess inventory, the decision to buy the large quantity is justified.

Smoothing requirements.

Sometimes inventory is used to smooth demand requirements in a market where demand

is somewhat erratic. Consider the demand forecast and production schedule outlined in

Table 1. The use of inventory has allowed the firm to maintain a steady rate of output

(thus avoiding the cost of hiring and training new personnel), while building up inventory

in anticipation of an increase in demand. In fact, this is often called anticipation

inventory. In essence, the use of inventory has allowed the firm to move demand

requirements to earlier periods, thus smoothing the demand.

Role of Inventory in the Supply Chain

Inventory exists in the supply chain because of a mismatch between supply and demand.

An important role that inventory plays in the supply chain is to increase the amount of

demand that can be satisfied by having the product ready and available when the

customer wants it. Another role that inventory plays is to reduce cost by exploiting

economies of scale that may exist during production and distribution. Inventory also has a

significant impact on the material flow time in a supply chain. Material flow time is the

time that elapses between the points at which material enters the supply chain to the point

at which it exits.



INVENTORY MANAGEMENT

The prime objective for all supply chains is to provide clients with what they want, when

they want it. Inventory management plays a central role in every supply chain’s need to

satisfy its clients.

Assess inventory management practices

Improve forecasting accuracy

Create more logical stocking (and non-stock!) policies

Manage cycle stock to reduce costs

Establish dynamic safety stock levels based on client service

Cross-dock, cycle count, transfer, and discontinue SKUs effectively

Reduce purchase transaction and manufacturing set-up/changeover costs

Continuously improve inventory performance

SPARE PARTS MANAGEMENT

Spare parts, also referred to as Service Parts is a term used to indicate extra parts

available and in proximity to the mechanical item, such as a automobile, boat, engine, for

which they might be used. Spare parts are also called “spares.”

Service Parts Management is the main component of a complete strategic service

management process that companies use to ensure that right spare part and resources are

at the right place (where the broken part is) at the right time.

Economic Considerations

Spare parts are sometimes considered uneconomical since:

• the parts might never be used

• the parts might not be stored properly

• the cost of inventory for spare parts on hand



• the ability to obtain the parts when needed from a remote source, such as a vendor,

supplier, parts department, etc.

But without the spare part on hand, a company's customer satisfaction levels could drop if

a customer has to wait too long for their item to be fixed. Therefore company's need to

plan and align their service parts inventory and workforce resources to achieve optimal

customer satisfaction levels with minimal costs.

User Considerations

The user of the mechanical item, which might require the parts, may overlook the

economic considerations because:

• the expense is not the users, but the employer’s

• of a known high rate of failure of certain equipment

• of delays in getting the part from a vendor or a supply room, resulting in machine

outage

• to have the parts on hand requires less “paperwork” when the parts are suddenly needed

• of the mental comfort it provides to the user in knowing the parts are on-hand when

needed

Cost-Effect Compromise

In many cases where the mechanical item is not stationary, a compromise is reached

between cost and statistical probability. Some examples:

• a member of a household buys extra light bulbs since it is probable that one of the lights in the house will eventually burn out and require replacement.

• a computer user will purchase a ream of computer paper instead of a sheet at a time.

• a race car team will bring with them to the race track another engine, “just in case.”



• a ship carries “spare parts” for its engine in case of breakdown at sea.

Spare Parts Management Indicators

There is a saying: “What you can’t measure, you can’t improve”. The saying is not

necessarily always true, but it is interesting, because a derivative of the saying is true:

“What you measure, is usually what you get”.

Reducing Inventory Value

It is common for plants to have a lot of focus on reducing inventory value. Inventory

value is one of those numbers that acts like salt in a wound for corporate accountants. It

doesn’t matter if it’s high or low, it always hurt to look at the number.

Cost of Keeping Spare Parts and Materials

The cost for keeping inventory is usually an estimated number, often called “inventory

interest” (or similar), that varies from 10-40% depending on company accounting rules.

The cost included storeroom, storeroom personnel, depreciation, etc. If you have a spare

parts and materials inventory value of 10 Million, it costs the company 1-4 Millions (10-

40%) a year to keep that spare parts and materials inventory.

The Problem

Since it is common that inventory value is the only number the plant really cares about, it

tends to get reduced. But, anyone can reduce inventory value very easily, IF it’s the only

thing that matters. I can tell you to scrap all spare parts right now bringing your spare

parts and materials inventory to zero. But the consequences will be devastating to

production since we don’t have any spare parts.

Measure a “Counterweight”

Spare parts inventory value is important, but to effectively reduce spare parts inventory

value, the “counterweight” has to be measured as well. The counterweight to inventory

value can be “stock-outs” for example (times we get the spare part needed divided by



total request for spare parts). When stock outs go over around 4-5%, you will start seeing

signs of people not trusting the store room. These signs are spare parts in supervisor’s

office, satellite stores, spare parts in crafts people’s toolboxes etc.

INVENTORY CONTROL

Stock control, otherwise known as inventory control, is used to show how much stock

you have at any one time, and how you keep track of it. It applies to every item you use

to produce a product or service, from raw materials to finished goods. It covers stock at

every stage of the production process, from purchase and delivery to using and re-

ordering the stock. Efficient stock control allows you to have the right amount of stock in

the right place at the right time. It ensures that capital is not tied up unnecessarily, and

protects production if problems arise with the supply chain.

This guide explains different stock control methods, shows you how to set one up and

tells you where to find more information

Stock control methods

There are several methods for controlling stock, all designed to provide an efficient

system for deciding what, when and how much to order.

Minimum stock level - you identify a minimum stock level, and re-order when stock

reaches that level. This is known as the Re-order Level.

Re order Level:

This is the level at which the order has to be placed. This is the vital stock level at which

the requisitions are made out for further supplies.

For finding out the ROL, the lead-time and the criticality of the item is needed.

The formula used is:

ROL=AMC * LT + K * √ AMC*LT

Where AMC= Average monthly consumption

LT = Lead time in months

K= Critical factor of items ( for V, K=2.33: E, K=1.65:D, K=1.00)

Also ROL is the sum of Buffer stock and Safety Stock



Buffer Stock:

This is the quantity of stock, which is consumed during the lead-time period. For

example, if the average monthly consumption is ‘AMC’ units/month and the Lead-Time

is ‘LT’ in months, then

Buffer Stock= AMC*LT units

Safety Stock:

In real life situations, two factors plays important role in the design of a system. The first

factor is that demand is never certain and is distributed over a set of probable values.

Secondly the lead time is never fixed but varies a certain range of days. Also it is a

function of the service level based on the criticality of the spare. The value of safety stock

can be calculated as follows:

Safety stock= K* √AMC *LT

Also the safety stock is usually kept as the minimum stock.

The reorder point for replenishment of stock occurs when the level of inventory drops

down to zero. In view of instantaneous replenishment of stock the level of inventory

jumps to the original level from zero level. In real life situations one never encounters a

zero lead-time. There is always a time lag from the date of placing an order for material

and the date on which materials are received. As a result the reorder level is always at a

level higher than zero, and if the firm places the order when the inventory reaches the

reorder point, the new goods will arrive before the firm runs out of goods to sell. The

decision on how much stock to hold is generally referred to as the order point problem,

that is, how low should the inventory be depleted before it is reordered.

The two factors that determine the appropriate order point are the procurement or

delivery time stock which is the Inventory needed during the lead time (i.e., the

difference between the order date and the receipt of the inventory ordered) and the safety

stock which is the minimum level of inventory that is held as a protection against

shortages.

Therefore Reorder Point = Normal consumption during lead-time + Safety Stock.



Several factors determine how much delivery time stock and safety stock should be held.

In summary, the efficiency of a replenishment system affects how much delivery time is

needed. Since the delivery time stock is the expected inventory usage between ordering

and receiving inventory, efficient replenishment of inventory would reduce the need for

delivery time stock. And the determination of level of safety stock involves a basic trade-

off between the risk of stock-out, resulting in possible customer dissatisfaction and lost

sales, and the increased costs associated with carrying additional inventory.

Another method of calculating reorder level involves the calculation of usage rate per

day, lead time which is the amount of time between placing an order and receiving the

goods and the safety stock level expressed in terms of several days' sales.

Reorder level = Average daily usage rate x lead-time in days.

From the above formula it can be easily deduced that an order for replenishment of

materials be made when the level of inventory is just adequate to meet the needs of

production during lead-time.

Stock review - you have regular reviews of stock. At every review you place an order to

return stocks to a predetermined level.

Just In Time (JIT) - this aims to reduce costs by cutting stock to a minimum - see our

guide on how to avoid the problems of overtrading. Items are delivered when they are

needed and used immediately. There is a risk of running out of stock, so you need to be

confident that your suppliers can deliver on demand. Download a fact sheet on JIT

production from the Manufacturing Advisory Service (MAS) website (PDF).These

methods can be used alongside other processes to refine the stock control system.

For example:

Re-order lead time - allows for the time between placing an order and receiving it.

Economic Order Quantity (EOQ) - a standard formula used to arrive at a balance between

holding too much or too little stock. It's quite a complex calculation, so you may find it

easier to use stock control software.


http://www.manufacturingadvice.org.uk/pluto-resources/1130401270724.pdf

http://www.manufacturingadvice.org.uk/pluto-resources/1130401270724.pdf

http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073925094&r.l1=1073858805&r.l3=1074039371&r.t=RESOURCES&r.i=1073792659&r.l2=1073859143&r.s=e


ECONOMIC ORDER QUANTITY

It is that quantity at which the cost of procuring the annual requirement of an item and the

inventory carrying cost are equal.i.e. where the total of the two costs is the lowest.

The formulae for finding the EOQ of an item is

Q= (2AP/UC) ^ (1/2)

Where A = Annual consumption in units

P = Procurement cost per order (1000 per order)

C = Inventory carrying cost (30% of unit price)

U = Unit price.

Types of stock

Everything you use to make your products, provide your services and to run your

business is part of your stock.

There are four main types of stock:

raw materials and components - ready to use in production

work in progress - stocks of unfinished goods in production

finished goods ready for sale

consumables - for example, fuel and stationery

How much stock should you keep?

Deciding how much stock to keep depends on the size and nature of your business, and

the type of stock involved. If you are short of space, you may be able to buy stock in bulk

and then pay a fee to your supplier to store it, calling it off as and when needed.

Keeping little or no stock and negotiating with suppliers to deliver stock as you need it



Advantages Disadvantages

Efficient and flexible - you only have what

you need, when you need it

Meeting stock needs can become

complicated and expensive

Lower storage costs You might run out of stock if there's a

hitch in the system

You can keep up to date and develop new

products without wasting stock

You are dependent on the efficiency

of your suppliers

This might suit your business if it's in a fast-moving environment where products develop

rapidly, the stock is expensive to buy and store, the items are perishable or replenishing

stock is quick and easy.

Keeping lots of stock

Advantages Disadvantages

Easy to manage Higher storage and insurance costs

Low management costs Certain goods might perish

You never run out Stock may become obsolete before it is used

Buying in bulk may be cheaper Your capital is tied up

This might suit your business if sales are difficult to predict (and it is hard to pin down

how much stock you need and when), you can store plenty of stock cheaply, the

components or materials you buy are unlikely to go through rapid developments or they

take a long time to re-order. Stock levels depending on type of stock

There are four main types of stock:

Raw materials and components

Ask yourself some key questions to help decide how much stock you should keep:

How reliable is the supply and are alternative sources available?

Are the components produced or delivered in batches?

Can you predict demand?

Is the price steady?

Are there discounts if you buy in bulk?

Work in progress - stocks of unfinished goods



Keeping stocks of unfinished goods can be a useful way to protect production if there are

problems down the line with other supplies.

Finished goods ready for sale

You might keep stocks of finished goods when:

demand is certain

goods are produced in batches

you are completing a large order

Consumables

For example, fuel and stationery. How much stock you keep will depend on factors such

as:

Reliability of supply

expectations of price rises

how steady demand is

discounts for buying in bulk



CHAPTER-3

OBJECTIVE, SCOPE, METHODOLOGY AND LIMITATIONS



3.1 OBJECTIVES

The main objective is to study the Spare parts Management with reference to following

specific objectives:

To classify the spares using VED, ABC and FSN analysis.

To fix the re order level and Economic Order Quantity of spares

To find out the money blocked in the non moving spares.

To formulate suggestions for improvement..

.

3.2 SCOPE

The study is limited to the analysis of machine spares in Akkulam plant of Hindustan

Latex Limited.

3.3 METHODOLOGY

The sources of data collection are

Primary Data

The Primary Data was collected through discussions with the managers of Stores

Department, IT Department, Finance Department and Engineering Department .

Secondary Data

The secondary data was collected from the Management Information System,

Company Website, company documents and books.

Tools Used

The tools used are EOQ model, Pareto analysis and Fish bone analysis.

3.4 LIMITATIONS

The carrying cost and ordering cost is the average estimation given by the finance

department.



CHAPTER-4

DATA ANALYSIS



DATA ANALYSIS

The data analysis is done with the help of certain selective Inventory control tools. The

techniques used in this study are:

VED Analysis (identification of criticality of spares)

ABC Analysis (classification of spares based on consumption value)

FSN Analysis (Identification of Fast, Slow and Non moving spares.

Calculation of Re order level and EOQ of spares

Computation of money blocked in the Non moving spares.

Fishbone diagram for the generating options for improvement..

VED Analysis

VED Analysis means Vital, Essential and Desirable Analysis. It is the Analysis for

monitoring and control of stores and spares inventory by classifying them into 3

categories viz., Vital, Essential and Desirable. The mechanics of VED analysis are

similar to those of ABC Analysis. The VED analysis is done to determine the criticality

of an item and its effect on production and other services. It is specially used for

classification of spare parts. If a part is vital it is given ‘V’ classification, if it is essential,

then it is given ‘E’ classification and if it is not so essential, the part is given ‘D’

classification. For ‘V’ items, a large stock of inventory is generally maintained, while for

‘D’ items, minimum stock is enough.

VED Classification

V= Vital;

E= Essential;

D= Desirable.

• If a part is vital it is given ‘V’ classification, if it is essential, then it is given ‘E’

classification and if it is not so essential, the part is given ‘D’ classification.

• For ‘V’ items, a higher stock of inventory is generally maintained, while for ‘D’

items, minimum stock is enough.



The VED analysis is carried out with the help of Engineering department by identifying

the critical spares. The spares of 10 machines was identified as critical and therefore as

Vital and the others are included in the category of both Essential and Desirable

TABLE 1-VED Analysis

SL NO

ITEM CODE ITEM DESCRIPTION STOCK VED ANALYSIS

1 7300500000 TOCHO GENERATOR DC MODEL TG 7457 DC [TUBE EXTRUDER] 2 V2 7300500010 DIE. M/C PROCURED FROM DGP WINDSOR,VATVA,AHMD- TUBE EXTRUDER 0 V3 7300500020 SCREW FOR TUBE EXTRUDER MODEL SX 30 0 V4 7300500030 BARREL FOR TUBE EXTRUDER M/C 0 V5 7300500040 POTENTIOMETER 10 TURN 10K,5W 4 V6 7300500050 POTENTIOMETER DAIL(ECIL MAKE 10 TURN) 2 V7 7300500060 CARD- ASSEMBLED SNUBBER CARD: 30HP/3PH & ABOVE 1 V8 7300500070 CARD- ASSEMBLED TRIGGER CARD (3-PH DRIVE) 1 V9 7300705040 CIRCUIT BREAKER S 272 K 6 A [ H.F. WELDING ] 1 V

10 7300705050 CIRCUIT BREAKER S 272 K 4 A [ H.F. WELDING MACHINE ] 2 V11 7300705060 CIRCUIT BREAKER S 272 K 2 A [ H.F. WELDING MACHINE ] 2 V12 7300705070 CIRCUIT BREAKER M - 25 TM - 4 R.5165 [ H.F WELDING MACHINE ] 1 V13 7300705080 For HF WELDING MACHINE PLC POWER SUPPLY 1 V14 7300706000 CAPACITOR (SIEMENS) B 85321 A - B4 [ H.F WELDING MACHIE ] 1 V15 7300706010 CPACITOR CERAMIC R.42 PD - 70 {160 PF} [H.F WELDING MACHINE] 1 V16 7300706020 CAPACITOR R-85 DB 645135 (100 PF) [ H.F WELDING MACHINE ] 1 V17 7300706030 VACCUM CAPACITOR 50 PF [ H.F WELDING MACHINE ] 3 V18 7300706040 VACCUM CAPACITOR 100 PF [ H.F WELDING MACHINE ] 1 V19 7300706050 CAPACITOR & B 1444, 0.5 F + OR - 20% MPE [ H F WELDING ] 1 V20 7300706060 CAPACITOR-LEAD THROUGH CAPACITOR DDMZ-3-00-1500PF 3 V21 7300706070 CAPACITOR CODE - LK – 100 - 504 FOR NEW HF WELDING M/C 1 V22 7300706080 CAPACITOR - FEEDTHROUGH CAPACITOR CODE - FP200AW 0 V23 7300706090 CAPACITOR - FEED THROUGH CAPACITOR FOR NEW HF WELDING M/C 2 V24 7300706100 CAPACITOR - FEED THROUGH CAPACITOR FOR NEW HF WELDING M/C 2 V25 7300706110 VACUUM CAPACITOR CODE CKT - 100 - 0035 FOR NEW HF WELD. M\C 2 V26 7300706120 PLATE CAPACITOR CODE-PD70-13KV-160PF-20%-R42 FOR NEW HF WELD 1 V27 7300706130 CAPACITOR - FEED THROUGH CAPACITOR FOR HF WELDING M/C 8 V28 7300706140 CAPACITOR- 1000PF +/- 20% FOR BOTTOM DIE GROUNDING PURPOSE 2 V29 7300706150 CAPACITOR 1600PF DRALORIC FOR HF WELDING MACHINE 1 V30 7300707000 CARD AUTO TUNING [ H.F WELDING MACHINE ] 2 V31 7300707010 CARD LIMIT CONTROL [ H.F WELDING MACHINE ] 4 V32 7300707020 CARD ARC SUPPRESSOR [ H.F WELDING MACHINE] 0 V33 7300707030 ETHERNET INTERFACE MODULE-NEW HF WELDING M/C 1 V34 7300707040 CARD-ATS CARD PROTECTION SYSTEM FOR NEW HF WELDING M/C 0 V35 7300708000 SPAN DEVICE [ H.F. WELDING MACHINE ] 1 V36 7300708010 TESTING DEVICE FOR APC-BOARDS OF H.F.WELDING M/C. 0 V37 7300708020 TESTING DEVICE FOR LIMIT CONTROL-BOARDS 0 V



38 7300708030 E - STOP MODULE CODE=KI P.N XPS AM5140 HF WELDING M/C 1 V39 7300708040 GUARDS SAFETY MODULE CODE=K5 P.N XPS AS5140 FOR NEW HF WELDG 1 V40 7300708050 TWO - HAND CONTROL DEVICE, CODE = K8, P.N XPS-BC 1110 1 V41 7300708060 ANALOG COMBO MODULE 24V DC CODE ES P.N IC 693 LG 442 1 V42 7300708070 RF PROTECTION / ISOLATION FOR HF WELDING STATION 0 V43 7300708080 STEPPER MOTOR DRIVING SYSTEM 0 V44 7300708090 SLITTING PUNCHING SYSTEM FOR BOTTOM OUT LET BAG 0 V45 7300709000 POSIITIVE / NEGATIVE LOGIC 24 V DC, 2 V46 7300709010 POSITIVE LOGIC 24 V DC, 0.5 A 2 V47 7300710000 HEATING ELEMENT P 2 HZ [ H.F WELDING MACHINE ] 1 V48 7300710010 SWITCH ELEMENT CODE S2, S3, S4, S5 P.N-5.00100.103 1 V49 7300710020 SWITCH ELEMENT CODE-S2, S3, S4, S5 P.N 5.00100.053 1 V50 7300710030 SWITCH ELEMENT CODE-S20, S21, P.N 5.00100.105 1 V51 7300710040 SWITCH ELEMENT, CODE-S12 P.N 5.00100.134 FOR NEW HF WELD.M/C 1 V52 7300710050 HEATING ELEMENT CODE 1000W FOR NEW HF WELDING M/C 1 V53 7300710060 ADSORPTION DRYER MODEL LDF-HS-GI/2 24V DC PART NO. 178528 0 V54 7300710070 FEIN FILTER SIZE : 0.01 MICRON MODEL : LFMA 1/2-H-A 0 V55 7300710080 FILTER UNITS 5NIC – AUTO DRAIN 5 MICRON PART NO : 162624 0 V56 7300710090 FILTER UNITS 5MTC - AUTODRAIN, 5 MICRON PART NO: 162624 0 V57 7300710100 FILTER UNITS WITH AUTO DRAIN, 40 MICRON PART NO : 159618 0 V58 7300710110 MICRO FILTER I MICRON MODEL : LFMB-3/4-D-MAXI-A 1 V59 7300711000 CUTTING KNIFE P.N EP-0009-064 FOR HF WELDING M/C 0 V60 7300711010 CUTTING OVEN P.N EP-0009-073 FOR NEW HF WELDING M/C 0 V61 7300711020 CUTTING PIPE P.N DIA 9 * 23, 80, TYPE 2E FOR NEW HF WELD.M/C 0 V62 7300711030 CUTTING PIPE P.N DIA 3 * 23, 60, TYPE 2E FOR NEW HF WELD.M/C 0 V63 7300711040 CUTTING PLATE DRG NO SS-0500-000 FOR NEW HF WELDING M/C 1 V64 7300711050 BLADE-OUTER TRIMMING BLADE - 350 ML 0 V65 7300711060 BLADE-OUTER TRIMMING BLADE - 450 ML 0 V66 7300711070 BLADE-OUTER TRIMMING BLADE - 300 ML 0 V67 7300712000 CONTACT PLAT [ H.F WELDING MACHINE ] 0 V68 7300712010 PLATE CAPACITOR R. 85 - DS - 030070 [ H.F WELDING MACHINE ] 2 V69 7300712020 PLATE CONTACT [ H F WELDING MACHINE } 32 V70 7300712030 PLATE STENCIL FOR HF WELDING MACHINE 0 V71 7300712040 CONTACT PLATE ( HF WELDING MACHINE.) 0 V72 7300712050 CONTACT STRIP TYPE 35 V73 7300712060 CONTACT PLATE PART NO:20573 FOR HF WELDING M/C. 10 V74 7300712070 CONTACT PLATE PART NO:15037 FOR HF WELDING M/C. 10 V75 7300712080 CUTTING PLATE PART NO:SS-0501-003 POS1 FOR HF WELDING M/C. 3 V76 7300712090 CONTACT PLATE PART NO:20570 (36E 100) FOR HF WELDING M/C. 7 V77 7300712100 CONTACT PLATE FOR H.F.WELDING M/C. 0 V78 7300712110 CONTACT PLATE FOR H.F.WELDING M/C 11 V79 7300712120 CONTACT PLATE FOR H.F.WELDING M/C 8 V80 7300720250 SWITCH - PROXIMITY REED SWITCH CODE - Z - 15G M22 - B 1 V81 7300720260 SWITCH - PROXIMITY REED SWITCH - CODE - HPS - IS - 25 - PNP 3 V82 7300722010 SEAL KIT COMPLETE SET FOR TOX- PRESSOTECK CYLINDER (TOP DIE) 1 V83 7300723000 SHEET ALUMINIUM [ H.F WELDING MACHINE ] 0 V84 7300723010 TUBE H.F [ H.F WELDING MACHINE ] 1 V85 7300724000 TUBE H.F [ H.F WELDING MACHINE ] 0 V86 7300724010 PUSH ROD P.N EP-0009-063 FOR NEW HF WELDING M/C 0 V87 7300724027 TUBE-MANDRIL GUIDE TUBE FOR NEW HF WELDING M/C. 2 V



88 7300725000 TIMER 88 886 100 TDP 48 C 2 [ H.F WELDING ] 1 V89 7300725010 TIMER 15 K 2 RELAY 0 - 4 SEC (MEA) [ H F WELDING MACHINE ] 0 V90 7300725020 TIMER - MEA 3,6, 26VAC/DC 0-4 SEC HF WELDING MACHINE. 2 V91 7300726000 TRANSFORMER 140 L 57 [ H.F WELDING MACHINE ] 1 V92 7300726010 TRANSFORMER M2/ 36648000 [ H F WELDING MACHINE ] 1 V93 7300726020 TRANSFORMER M1/ 36648000 [ H F WELDING MACHINE ] 1 V94 7300726030 H.T TRANSFORMER CODE 25 - DKH - 41 FOR NEW HF WELDING M/C 1 V95 7300726040 FILAMENT TRANSFORMER CODE - 840 L44 FOR NEW HF WELDING M/C 1 V96 7300727000 COPPER SHEETt - 33 GUAGE 2 FEEL WIDTH 0 V97 7300727010 SEAL KIT COMPLETE SET FOR TOP DIE CYLINDER NEW HF WELDING

MACHINE0 V

98 7300727020 REGULATOR-AIR PRESSURE REGULATOR 2 V99 7300727030 PRESSURE GAUGE FOR LEAK CHECKING MACHINE 2 V

100 7300727040 ELECTROSTATIC DISCHARGE UNIT FOR NEW HF WELDING MACHINE 0 V101 7300727050 ACRYLIC BLOCK FOR HF WELDING MACHINE 3 V102 7300730000 VALVE (FESTO) CM 5 [ H.F. WELDING MACHINE ] 1 V103 7300730010 FESTO VALVE 5-3-G-D-3B [ H.F. WELDING MACHINE ] 2 V104 7300730020 VALVE AIR SHUT OFF (TYPE: HE - 3 - 1/2 - QF - 12) 1 V105 7300730030 VALVE (FESTO) 12-941[ H.F WELDING MACHINE ] 1 V106 7300730040 VALVE (FESTO) 13327 GRLA [ H.F WELDING MACHINE ] 7 V107 7300730050 VALVE (FESTO) 13329 GRLA [ H.F WELDING MACHINE ] 1 V108 7300730060 VALVE (FESTO) 151190 [ H.F WELDING MACHINE ] 1 V109 7300730070 VALVE - NON RETURN VALVE GRLA-M5-QS-6-B 3 V110 7300730080 VALVE - NON RETURN VALVE, CODE - HQS - 6 P.N 153468 0 V111 7300730090 VALVE - NON RETURN VALVE CODE-GRLA-1/4-QS-8-RS-B P.N 162968 0 V112 7300730100 VALVE - NON RETURN VALVE, CODE-GRLZ-1/8/PK-4-8 P.N 151190 1 V113 7300730110 VALVE - QUICK EXHAUST VALVE SE - 1/2-B 1 V114 7300730120 VALVE - QUICK EXHAUST VALVE MODEL Q-4 1/2 INCH BSP 3 V115 7300730130 VALVE CODE - MNIH - 5/2-D-3-FR-C 4 V116 7300730140 VALVE - NON RETURN VALVE CODE - H - QS - 12 1 V117 7300730150 VALVE - NON RETURN VALVE CODE GRLA-1/2-B 2 V118 7300730160 VALVE - NON RETURN VALVE CODE-GRLA-1/8-QS-6-RS-B 6 V119 7300730170 VALVE - NON RETURN VALVE CODE - GRLA - M5 - QS - 6 – RS - B 3 V120 7300800060 RUBBER SLEEVE P/N Q-241 (HOT MARKING) 10 E121 7300800070 CONNECTOR-MALE CONNECTOR CK-1/4-PK-6 0 E122 7300800080 CONNECTOR-PUSH-IN TEE CONNECTOR QST-8 0 E123 7300805000 BOLT M 5 X 16 - 10 [ HOT MARKING MACHINE ] 0 E124 7300805010 BOLT M 5 X 12 - 10 [ HOT MARKING MACHINE ] 0 E125 7300805020 BOLT M 5 X 25 - 7 [ HOT MARKING MACHINE ] 0 E126 7300805030 BOLT M 5 X 20 - 8 [ HOT MARKING MACHINE ] 0 E127 7300805040 PLANE STOCK, PART NO: Q 308 FOR HOT STAMPING M/C 2 E128 7300806000 LEFT SIDE BUSH P/N-1-73 DRG.NO:P11 HOT MARKING MACHINE 7 E129 7300806010 RIGHT SIDE BUSH-P/N-1-73,DRG.NO.P10 HOT MARKING MACHINE 9 E130 7300806020 BUSH - INTERMEDIATE GEAR SHAFT 15-JA.NO:1 HOT MARKING MACHIE 2 E131 7300806030 BUSH FOR HOT STAMPING M/C MATERIAL : HYLUM 2 E132 7300806040 BUSH FOR HOT STAMPING M/C MATERIAL : BLACK TEFLON 0 D133 7300807000 SHAFT-CHARACTER WHEEL-1 73 RG. NO: P 60 HOT MARKING MACHINE 4 D134 7300807010 CHARACTER WHEEL P/N -1 (HOT MARKING) 8 D135 7300807020 INDEXING WHEEL 4 D136 7300807030 CHARACTER WHEEL TURNING GEAR P/N B -118 (HOT MARKING) 13 D



137 7300807040 RIGHT SIDE WHEEL COVER (WHITE)P/N P-61(HOT MARKING) 0 D138 7300807050 LEFT SIDE WHEEL COVER (WHITE)P/N P-59 (HOT MARKING) 0 D139 7300807060 CHARACTER PRINTING WHEEL 2.4 * 2.4 MM FLAT FACE, PART NO:P 1 3 D140 7300810000 FUSE EP 7-5 [ HOT MARKING MACHINE ] 3 D141 7300810010 FUSE - GLASS FUSE P/W- EP 3 D142 7300810020 FUSE-GLASS FUSE 30 MM 1 K 0 D143 7300815000 PLATE P\N - B 172 - 3 [ HOTMARKING MACHINE ] 8 D144 7300815010 MIDDLE PLATE P\N -P 28-11 [ HOTMARKING MACHINE ] 2 D145 7300815020 MIDDLE PLATE P\N-P 27-2 [ HOTMARKING MACHINE ] 3 D146 7300815030 MIDDLE PLATE P\N -P 3-2 [ HOT MARKING MACHINE ] 14 D147 7300815040 MIDDLE PLATE P\N -P 5-2 [ HOT MARKING MACHINE ] 7 D148 7300815050 MIDDLE PLATE P\N –D 4-22 [ HOT MARKING MACHINE ] 5 D149 7300815060 DISK PLATE FULL SET [ LETTER & NUMBER ] HOT MARKING MACHINE 0 D150 7300815070 ARM & HANDLE SET (SET OF P/N W1 521 THROUGH 547) 0 D

The VED analysis is carried out for 500 items of machine spares. For reference, VED

Analysis of 150 items is shown in the table 1. The inference of the analysis is as listed

Total number of vital items 116

Total number of essential items 264

Total number of desirable items 120

ABC Analysis

The ABC classification process is an analysis of a range of items, such as finished

products or customers into three categories: A - outstandingly important; B - of average

importance; C - relatively unimportant as a basis for a control scheme. Each category can

and sometimes should be handled in a different way, with more attention being devoted

to category A, less to B, and still less to C. Popularly known as the "80/20" rule ABC

concept is applied to inventory management as a rule-of-thumb. It says that about 80% of

the Rupee value, consumption wise, of an inventory remains in about 20% of the items.

This rule, in general, applies well and is frequently used by inventory managers to put



their efforts where greatest benefits , in terms of cost reduction as well as maintaining a

smooth availability of stock, are attained.

The ABC concept is derived from the Pareto's 80/20 rule curve .It is also known as the

80-20 concept. Here, Rupee value of each individual inventory item calculated on annual

or monthly consumption basis as High value (A), intermediary value (B) , Low value (C)

20% of the items account for 80% of total inventory investment specific items on which

efforts can be concentrated profitably provides a sound basis on which to allocate funds

and time . A,B & C , all have a purchasing / storage policy i.e A, most critically reviewed

, B little less while C still less with greater results

Inventory Control Application: The ABC classification system is to grouping items

according to annual issue value, (in terms of money), in an attempt to identify the small

number of items that will account for most of the issue value and that are the most

important ones to control for effective inventory management. The emphasis is on putting

effort where it will have the most effect.

All the items of inventories are put in three categories, as below :

A Items : These Items are seen to be of high Rupee consumption volume. "A" items

usually include 10-20% of all inventory items, and account for around 80% of

consumption value

B Items : "B" items are those that are 30-40% of all inventory items, and account for

15% of consumption value. These are important, but not critical, and don't possess

sourcing difficulties.

C Items : "C" items account for 40-50% of all inventory items, but only 5 % of

consumption value. Characteristically, these are standard, low-cost and readily available

items.

This classification allows the inventory manager to assign priorities for inventory control.

Strict control needs to be kept on A and B items, with preferably low safety stock level.

Taking a lenient view, the C class items can be maintained with looser control and with

high safety stock level. The ABC concept puts emphasis on the fact that every item of

inventory is critical and has the potential of affecting adversely production, or sales to a



customer or operations. The categorization helps in better control on A and B items. The

methodology used here in the analysis is to find out the cumulative consumption value

and thus classifying the spares with 80-20 principle.

TABLE 2- ABC Analysis

NO ITEM CODE & ITEM NAME CONSMP CONSMP VALUE

CUM C.V

% CV

CLASS

1 7300790070 DIE - WELDING DIE 3 PORT TOP & 98 20355462 20355462 29 A2 7100400070 WIRE GUIDE ASSEMBLY UNIT

WITH52 5061888 25417350 37 A

3 7300790180 DIE-WELDING 3 PORT NEW [ TP + 40 3153288 28570638 41 A4 7300751053 MANDRIL TIP -TP [ FOR NEW & OL 170 2397427 30968065 45 A5 7300712000 CONTACT PLAT [ H.F WELDING

MA87 2339949 33308014 48 A

6 7300751043 MANDRIL TIP-CONNECTOR & SLEEVE

162 2183211 35491225 51 A

7 7300790050 DIE - WELDING DIE 4 PORT TOP [ 30 1906320 37397545 54 A8 7300790060 DIE - WELDING DIE 4 PORT BOTT 30 1893870 39291415 57 A9 7300751033 MANDRIL TIP - TUBE - [ FOR NEW 150 1872000 41163415 60 A

10 7300751070 MANDRIL BUSH - SLEEVE & CONNEC

139 1601066 42764481 62 A

11 7300751080 MANDRIL BUSH - TUBE -[ OLD & N 130 1404831 44169312 64 A12 7300703460 CYLINDER – DOUBLE ACTING

CYLIN2 1396323 45565634 66 A

13 7301510010 SENSOR - TEMPERATURE SENSOR RT

33 1248138 46813772 68 A

14 7300700920 BLADE - SIDE SLITT BLADE ( N 38 1221168 48034940 70 A15 7302201000 DISK FILTER FOR INKJET PR 15 1079959 49114899 71 A16 7300751060 MANDRIL BUSH – TP [ OLD & NEW 110 1006625 50121524 73 A17 7300751120 Mandrel block without mandrels 2 897636 51019161 74 A18 7300751160 BUSH -FOR TP ( NEW TYPE) 100 884000 51903161 75 A19 7300751180 BUSH - FOR TUBE 9 NEW TYPE) 100 884000 52787161 76 A20 7300751170 BUSH -SLEEVE & CONN. ( NEW TYP 100 884000 53671161 78 A21 7307101080 CERAMIC INSERT- SIDE ( NEW ) 25 738275 54409436 79 A22 7300790172 DIE-U-WELD DIE 450 ML TOP[SING 5 671888 55081323 80 A23 7302201010 PREPUMP FILTER FOR INKJET P 15 605115 55686438 81 B24 7300700750 CERAMIC INSERTS FOR BOTTOM

SLI24 587064 56273502 82 B

25 7307101030 CERAMIC INSERT – SIDE - WELD 24 569088 56842590 82 B26 7300711000 CUTTING KNIFE P.N EP-0009-064 24 556980 57399571 83 B27 7100400000 WIRE GUIDE HEAD 30 514800 57914371 84 B28 7301500010 STEAM CLOX CAT NO 00103 18 479390 58393761 85 B29 7300700710 BLADE - SIDE SLIT BLADE FOR TO 24 479232 58872993 85 B30 7300740000 A.R.C GAURD [ H.F WELDING MAC 3 402471 59275464 86 B31 7300790162 DIE-U-WELD DIE 450 ML BOTTOM [ 4 399360 59674824 86 B32 7300790142 DIE-U-WELD DIE-350 ML BOTTOM [ 4 382720 60057544 87 B



33 7300711010 CUTTING OVEN P.N EP-0009-073 F 6 363501 60421045 88 B34 7300703310 DOUBLE ACTING CYLINDER

CODE -2 342394 60763439 88 B

35 7300723010 TUBE H.F [ H.F WELDING MACHI 1 296871 61060310 88 B36 7300712130 CONTACT STRIP FOR NEW HF

WELDI11 279402 61339711 89 B

37 7307300010 NOZZLE FOR BAG LEAK CHECKING

16 250272 61589983 89 B

38 7300790152 DIE-U-WELD DIE 350 ML TOP [ SI 3 219960 61809943 90 B39 7300750040 INSULATOR BLOCK FOR MANDRIL

CA5 193243 62003186 90 B

40 7300600270 BRUSH LESS AC SERVO M/N 5RA020

1 184273 62187459 90 B

41 7307201040 Mandrel pin ( sl +conn) Monga 40 183040 62370499 90 B42 7307201050 MANDREL PIN (TP) MONGA M/C 40 183040 62553539 91 B43 7300600520 EMBOSSING ROLL(HARD

CHROMIUM P1 170201 62723740 91 B

44 7600600310 ELECTRONIC PRECISION VALVE CON

8 145760 62869500 91 B

45 7302255000 VALVE - 460 SI VALVE FOR INKJ 4 140533 63010033 91 B46 7300370080 Ejector pin - Needle Cover 32 24 133488 63143521 91 B47 7300703340 SINGLE ACTING CYLINDER (TYPE 2 130659 63274180 92 B48 7301700060 BUSH - HYLAM BUSH SET FOR

ALU50 121000 63395180 92 B

49 7300700280 CERAMIC BAR AT-0000-058 FOR H. 6 119574 63514753 92 B50 7600605060 H E P A FILTER 5 117000 63631753 92 B51 7100400010 RECTIFIRE FOR CU – T WINDING 11 112158 63743911 92 B52 7300790242 DIE - U WELD DIE 300 ML TOP [S 2 111600 63855511 92 B53 7300900010 CARD - LOGIC [ LABELLING

MACH3 108972 63964483 93 B

54 7300790192 DIE - U WELD DIE FOR 300 ML BO 2 108900 64073383 93 B55 7100105000 CORE PIN FOR COPPER WIRE HOLE 16 104426 64177809 93 B56 7300727010 SEAL KIT COMPLETE SET FOR TOP 2 103358 64281167 93 B57 7300732000 VACCUM UNIT KVP 31 -9H [H.F 2 102049 64383216 93 B58 7300712050 CONTACT STRIP TYPE 15 100026 64483242 93 B59 7604000000 AIR FILTER 5 MICRON(PRE FILTER 25 97500 64580742 94 B60 7300732020 VACUUM GENERATOR CODE -

YQ47, Y2 94246 64674988 94 B

61 7100105010 Core pins for suture wire hole 16 93670 64768658 94 B62 7600103030 L O FILTER STD. AR 3238204 K 16 88359 64857018 94 B63 7300720300 SWITCH - PROXIMITY REED

SWITCH9 83635 64940653 94 B

64 7300707040 CARD-ATS CARD PROTECTION SYSTE

1 82983 65023636 94 B

65 7300861120 SPACE RING ( SMALL), PART NO. 24 80774 65104410 94 B66 7300920010 RETRO RELEX SENSOR (MAKE

OMRON4 76797 65181207 94 B

67 7300655040 BARREL HEATER (SHEET EXTRUDER

1 74380 65255586 95 B



68 7702400000 HUMIDITY AND TEMPERATURE TRANS

2 73412 65328998 95 B

69 7302255010 VALVE - PICO VALVE FOR INKJET 4 73087 65402086 95 B70 7600103060 ELEMENT AUCLEANER AR 3238151 4 66227 65468313 95 B71 7302400050 UV valve for Loctite gluing ma 1 65577 65533889 95 B72 7302000030 PUMP-PRESSURE PUMP OF INKJET

P1 64480 65598369 95 B

73 7600103050 ELEMENT SLO BYPASS 3873576 K 10 63641 65662010 95 B74 7300712100 CONTACT PLATE FOR

H.F.WELDING7 58133 65720143 95 B

75 7305501000 MOTOR - DC MOTOR MODEL : 9C 1 55908 65776051 95 B76 7300700520 D.C MOTOR (HF WELDING M/C) 2 54694 65830745 95 B77 7300940020 SENSORS - PHOTOELECTRIC SLOT

S2 52987 65883732 95 B

78 7300700260 KNIFE- CERAMIC KNIFE AT-0000-0 3 52621 65936353 96 C79 7600605070 MICROVEE FILTER- 21" * 21" * 1 6 51367 65987720 96 C80 7300727030 PRESSURE GAUGE FOR LEAK

CHECKI6 50625 66038345 96 C

81 7600103040 ELEMENT OUTER 3237953 4 49056 66087401 96 C82 7100000100 SHIM FOR SWAGING M/C DIE 24 47928 66135329 96 C83 7300790250 DIE FIXING PLATE - First wel 4 47424 66182753 96 C84 7100000080 DIE ASSEMBLY FOR SWAGING

MACHI2 47380 66230133 96 C

85 7300303010 TEMP: CONTROLLER (PID) MAKE:FU

3 46673 66276806 96 C

86 7300790260 DIE FIXING PLATE U weld die 3 44928 66321734 96 C87 7601080030 TIMER – ELCTRONIC. 7 44376 66366110 96 C88 7300703010 CYLINDER (FESTO) ADV 32 - 25 A 4 43681 66409791 96 C89 7300703650 CYLINDER-RODLESS CYLINDER

OSP-1 42568 66452359 96 C

90 7300718190 RELAY - POWER RELAY - TYPE A63 2 41992 66494351 96 C91 7300310000 RELAY SOLID STATE I/P:230VAC 0 6 41652 66536003 96 C92 7600827010 SPRING SUCTION VALVE [ A/C SP 53 40899 66576902 96 C93 7300700140 INSERTS- CERAMIC INSERTS FOR P 4 38096 66614998 96 C94 7307400030 PUMP HEAD FOR COLE PARMER

PERI1 38062 66653060 97 C

95 7301601000 SEAL - MECHANICAL - FOR CPDA M

4 37836 66690896 97 C

96 7600770020 VALVE PLATE ASSEMBLY VOLTAS A/

3 37040 66727936 97 C

97 7203000050 Core pin for shunt PP base mou 6 36690 66764626 97 C98 7300655000 PLATE HEATER [ SHEET

EXTRUDER1 35562 66800188 97 C

99 7600830000 AC VARIABLE SPEED DRIVE MODE

1 35392 66835580 97 C

100 7300703270 CYLINDER DOUBLE ACTING ADVU-25

4 34496 66870075 97 C

101 7300703320 DOUBLE ACTING CYLINDER CODE -

1 33832 66903908 97 C



102 7100040000 HEATING ELEMENT FOR IMPLUS HEA

10 33750 66937658 97 C

103 7302256000 NOZZLE FOR INKJET PRINTER 1 33224 66970881 97 C104 7600104040 FUEL FILTER FOR DG SET PART NO 8 32909 67003790 97 C105 7600750110 CR BEARING INSERTS 610-00-02(V 12 32780 67036570 97 C106 7600604010 GASKET - PERMENITE 1/64" 15 32378 67068948 97 C107 7600827020 SPRING DISCHARGE VALVE [ A/C 44 32215 67101163 97 C108 7600001300 HEATING ELEMENT - HCS

SEALING100 32132 67133295 97 C

109 7300721170 SEAL KIT FOR BOTTOM DIE PRESS 2 32008 67165303 97 C110 7600700090 GUIDE ASSEMBLY FOR VOLTAS

COMP6 31500 67196803 97 C

111 7601118000 RIDER RING LP FOR HX2T-60N CHI 2 31396 67228199 97 C112 7300700270 CERAMIC BAR AT-0000-057 FOR H. 2 30772 67258972 97 C113 7601600270 DIGITAL TEMPERATURE

INDICATOR3 30307 67289279 97 C

114 7702601000 PRINTER HEAD,TYPE:TEC-B572,RES

1 29848 67319127 98 C

115 7302100000 MAIN INK PI FILTER FOR INKJ 2 29732 67348858 98 C116 7302000000 MAIN INK SI FILTER FOR INKJ 2 29517 67378375 98 C117 7300700810 VAQCUUM PUMP FOR OLD HF

WELDIN1 29257 67407632 98 C

118 7300314000 CARD – PROPORTIONAL AMPLIFIER

2 28432 67436064 98 C

119 7300703290 DOUBLE ACTING CYLINDER ADVU-40

3 28234 67464298 98 C

120 7300700540 BUSH - SLIDING BUSH FOR HF WEL 8 27386 67491684 98 C121 7300704130 CONTACTOR RELAY N31E, ABB

MAKE6 27218 67518902 98 C

122 7301250030 SHEET-TEFLON SHEET NON-ADHESIV

11 24330 67543231 98 C

123 7600600490 FAN-COOLING TOWER FAN (FRP) 1 23917 67567148 98 C124 7301600070 PUMP-MIXING PUMP 1 23823 67590971 98 C125 7702500010 DIE-20 CAVITY DIE FOR PAPER BO 1 23383 67614354 98 C126 7601610026 FLANGE M.S. 1" [ BOILE 14 23359 67637713 98 C127 7300707020 CARD ARC SUPPRESSOR [ H.F WEL 1 23272 67660985 98 C128 7603000140 DISK MEDIA (FOR FILTER) 5 22540 67683525 98 C129 7700320000 TEFLON BELT FOR PSCH-7200

CONT12 22464 67705989 98 C

130 7702380000 PROXIMITY SWITCH M12 PNP FO 3 22410 67728399 98 C131 7301508000 SHAFT SEAL FOR BLOWER MOTOR

[S1 22358 67750757 98 C

132 7300200050 CARD- ASSEMBLED TRIGGER CARD (

2 22081 67772838 98 C

133 7600839000 BLOWER – ALUMINIUM 2 20552 67793390 98 C134 7302402000 UV LAMP (ACS 14-2) FOR UV CURI 1 20010 67813400 98 C135 7300800040 INTERMEDIATE GEAR P/N P-

37(HOT7 18324 67831724 98 C

136 7300790270 DIE FIXING PLATE - U weld 350 2 18304 67850028 98 C



137 7300941000 VALVE - SOLENOID VALVE FOR 3 18126 67868154 98 C138 7300720150 PROX.REED SWITCH P.N SME-8-S-L 3 17960 67886114 98 C139 7300711020 CUTTING PIPE P.N DIA 9 * 23, 8 12 17267 67903381 98 C140 7307207080 ELECTRODE - U WELD TOP (450 ML 1 16640 67920021 98 C141 7100000140 STATIC ELIMINATOR COMPLETE

SE1 16599 67936620 98 C

142 7300807010 CHARACTER WHEEL P/N -1 (HOT MA

2 16517 67953137 98 C

143 7300703300 DOUBLE ACTING CYLINDER MODEL

3 16088 67969224 98 C

144 7300700080 FILTER REGULATOR UNIT WITH GAU

2 15930 67985154 98 C

145 7300706130 CAPACITOR - FEED THROUGH CAPAC

4 15638 68000793 98 C

146 7300500110 TEMPERATURE CONTROLLER ON-OFF

3 15624 68016417 99 C

147 7601600070 PHOTOCELL FOR VAPOUR THERM BOI

2 15107 68031524 99 C

148 7600840030 DISCHARGE VALVE STOPPER [ A/C

4 14913 68046437 99 C

149 7307400020 Keypad for cole parmer perista 1 14852 68061289 99 C150 7700230000 HEATER-TUBULAR 6 14793 68076082 99 C

The ABC Analysis is done for 500 spares and out of which 150 is listed in the table 2.

The inference of the analysis is as shown below:

Total number of Items In Class A 22

Total number of Items In Class B 55

Total number of Items in Class C 423

Thus it is clear that only 22 items of spares is having high consumption value and the 55

items of spares is having a medium consumption and the rest 423 items of spares are of

lower consumption value. ABC classifications allow the inventory manager to assign

priorities for inventory control.

FSN Analysis



Here, classification is based on the pattern of issues from stores and is useful in

controlling obsolescence.

F = Fast moving

S = Slow Moving;

N = Non Moving.

To carry out an FSN analysis, the date of receipt or the last date of issue, whichever is

later, is taken to determine the number of months, which have lapsed since the last

transaction. The items are usually grouped in periods of 12 months.FSN analysis is

helpful in identifying active items which need to be reviewed regularly and surplus items

which have to be examined further. Non-moving items may be examined further and their

disposal can be considered

Methodology

The number of months for which the spares are being moved is computed and the analyis

is done based on that. The spares are classified as Non moving (N) if it is not having any

movement for more than 60 months. The spares are classified as Slow moving (S) if at

least one or more spares are used in between 12 months and 60 months. The spares are

classified as Fast moving (F) if one or more spares are used within 12 months.

Inference

The analysis is done for 500 spares and out of which 294 spares is identified as Non

moving and 201 items as Slow and 5 items as Fast moving spares and it shows the break

down maintenance is less.

CALCULATION OF RE ORDER LEVEL OF SPARES

Re order Level:

This is the level at which the order has to be placed. This is the vital stock level at which

the requisitions are made out for further supplies.

For finding out the ROL, the lead-time and the criticality of the item is needed.

The formula used is:

ROL=AMC * LT + K * √ AMC*LT



Where AMC= Average monthly consumption

LT = Lead time in months

K= Critical factor of items ( for V, K=2.33: E, K=1.65:D, K=1.00)

Also ROL is the sum of Buffer stock and Safety Stock

Buffer Stock:

This is the quantity of stock, which is consumed during the lead-time period. For

example, if the average monthly consumption is ‘AMC units/month and the Lead-Time is

‘LT’ months, then

Buffer Stock= AMC*LT units

Safety Stock:

In real life situations, two factors plays important role in the design of a system. The first

factor is that demand is never certain and is distributed over a set of probable values.

Secondly the lead time is never fixed but varies a certain range of days. Also it is a

function of the service level based on the criticality of the spare. The value of safety stock

can be calculated as follows:

Safety stock= K* √AMC *LT

Also the safety stock is usually kept as the minimum stock.

the reorder point for replenishment of stock occurs when the level of inventory drops

down to zero. In view of instantaneous replenishment of stock the level of inventory

jumps to the original level from zero level. In real life situations one never encounters a

zero lead-time. There is always a time lag from the date of placing an order for material

and the date on which materials are received. As a result the reorder level is always at a

level higher than zero, and if the firm places the order when the inventory reaches the

reorder point, the new goods will arrive before the firm runs out of goods to sell. The

decision on how much stock to hold is generally referred to as the order point problem,

that is, how low should the inventory be depleted before it is reordered.

The two factors that determine the appropriate order point are the procurement or

delivery time stock which is the Inventory needed during the lead time (i.e., the

difference between the order date and the receipt of the inventory ordered) and the safety



stock which is the minimum level of inventory that is held as a protection against

shortages.

Therefore Reorder Point = Normal consumption during lead-time + Safety Stock.

Several factors determine how much delivery time stock and safety stock should be held.

In summary, the efficiency of a replenishment system affects how much delivery time is

needed. Since the delivery time stock is the expected inventory usage between ordering

and receiving inventory, efficient replenishment of inventory would reduce the need for

delivery time stock. And the determination of level of safety stock involves a basic trade-

off between the risk of stock-out, resulting in possible customer dissatisfaction and lost

sales, and the increased costs associated with carrying additional inventory.

Another method of calculating reorder level involves the calculation of usage rate per

day, lead time which is the amount of time between placing an order and receiving the

goods and the safety stock level expressed in terms of several days' sales.

Reorder level = Average daily usage rate x lead-time in days.

From the above formula it can be easily deduced that an order for replenishment of

materials be made when the level of inventory is just adequate to meet the needs of

production during lead-time.

The ROL OF 500 item of spares is calculated and out of which calculation of 150 items is

shown for reference in table 3.

Table 3-Fixing the ROL

SL NO

ITEM CODE

ITEM NAME STOCK AMC LT K ROL

1 7300706050 CAPACITOR & B 1444, 0.5 F + OR - 20% MPE [ H F WELDING ] 1 0.03 5 2.33 12 7300706060 CAPACITOR-LEAD THROUGH CAPACITOR DDMZ-3-00-

1500PF3 0.02 5 2.33 1

3 7300706070 CAPACITOR CODE - LK - 100 - 504 FOR NEW HF WELDING M/C

1 0.02 10 2.33 1

4 7300706080 CAPACITOR – FEEDTHROUGH CAPACITOR CODE - FP200AW

5 0.45 10 2.33 10

5 7300706090 CAPACITOR - FEED THROUGH CAPACITOR FOR NEW HF WELDING M/C

2 0.56 6 2.33 8

6 7300706100 CAPACITOR - FEED THROUGH CAPACITOR FOR NEW HF WELDING M/C

2 0.07 13 2.33 3



7 7300706110 VACUUM CAPACITOR CODE CKT - 100 - 0035 FOR NEW HF WELD. M\C

10 0.8 13 2.33 18

8 7300706120 PLATE CAPACITOR CODE-PD70-13KV-160PF-20%-R42 FOR NEW HF WELD

1 0.01 13 2.33 1

9 7300706130 CAPACITOR - FEED THROUGH CAPACITOR FOR HF WELDING M/C

8 0.02 7 2.33 1

10 7300706140 CAPACITOR- 1000PF +/- 20% FOR BOTTOM DIE GROUNDING PURPOSE

2 0.05 8 2.33 2

11 7300706150 CAPACITOR 1600PF DRALORIC FOR HF WELDING MACHINE

1 0.04 14 2.33 2

12 7300707000 CARD AUTO TUNING [ H.F WELDING MACHINE ] 2 0 6 2.33 013 7300707010 CARD LIMIT CONTROL [ H.F WELDING MACHINE ] 4 0 9 2.33 014 7300707020 CARD ARC SUPPRESSOR [ H.F WELDING MACHINE] 0 0.01 9 2.33 115 7300707030 ETHERNET INTERFACE MODULE-NEW HF WELDING M/C 1 0 9 2.33 016 7300707040 CARD-ATS CARD PROTECTION SYSTEM FOR NEW HF

WELDING M/C0 0 9 2.33 0

17 7300708000 SPAN DEVICE [ H.F. WELDING MACHINE ] 1 0.04 9 2.33 218 7300708010 TESTING DEVICE FOR APC-BOARDS OF H.F.WELDING M/C. 0 0.03 9 2.33 119 7300708020 TESTING DEVICE FOR LIMIT CONTROL-BOARDS 0 0.03 8 2.33 120 7300708030 E - STOP MODULE CODE=KI P.N XPS AM5140 HF WELDING

M/C1 0.04 9 2.33 2

21 7300708040 GUARDS SAFETY MODULE CODE=K5 P.N XPS AS5140 FOR NEW HF WELDG

1 0.08 6 2.33 2

22 7300708050 TWO - HAND CONTROL DEVICE, CODE = K8, P.N XPS-BC 1110

1 0.01 8 2.33 1

23 7300708060 ANALOG COMBO MODULE 24V DC CODE ES P.N IC 693 LG 442

1 0 8 2.33 0

24 7300708070 RF PROTECTION / ISOLATION FOR HF WELDING STATION 0 0.02 7 2.33 125 7300708080 STEPPER MOTOR DRIVING SYSTEM 0 0.42 4 2.33 426 7300708090 SLITTING PUNCHING SYSTEM FOR BOTTOM OUT LET BAG 0 0.42 2 2.33 327 7300709000 POSIITIVE / NEGATIVE LOGIC 24 V DC, 2 0.45 2 2.33 328 7300709010 POSITIVE LOGIC 24 V DC, 0.5 A 2 0.45 3 2.33 429 7300710000 HEATING ELEMENT P 2 HZ [ H.F WELDING MACHINE ] 1 0.45 6 2.33 730 7300710010 SWITCH ELEMENT CODE S2, S3, S4, S5 P.N-5.00100.103 1 0.45 9 2.33 931 7300710020 SWITCH ELEMENT CODE-S2, S3, S4, S5 P.N 5.00100.053 1 0.47 2 2.33 432 7300710030 SWITCH ELEMENT CODE-S20, S21, P.N 5.00100.105 1 0.47 2 2.33 433 7300710040 SWITCH ELEMENT, CODE-S12 P.N 5.00100.134 FOR NEW HF

WELD.M/C1 0.47 1 2.33 3

34 7300710050 HEATING ELEMENT CODE 1000W FOR NEW HF WELDING M/C

1 0.02 12 2.33 1

35 7300710060 ADSORPTION DRYER MODEL LDF-HS-GI/2 24V DC PART NO. 178528

0 0.54 14 2.33 14

36 7300710070 FEIN FILTER SIZE : 0.01 MICRON MODEL : LFMA 1/2-H-A 0 0.83 13 2.33 1837 7300710080 FILTER UNITS 5NIC - AUTO DRAIN 5 MICRON PART NO :

1626240 0.17 16 2.33 7

38 7300710090 FILTER UNITS 5MTC - AUTODRAIN, 5 MICRON PART NO: 162624

0 0.02 13 2.33 1

39 7300710100 FILTER UNITS WITH AUTO DRAIN, 40 MICRON PART NO : 159618

0 0.16 11 2.33 5



40 7300710110 MICRO FILTER I MICRON MODEL : LFMB-3/4-D-MAXI-A 1 0.34 10 2.33 841 7300711000 CUTTING KNIFE P.N EP-0009-064 FOR HF WELDING M/C 0 0.54 4 2.33 642 7300711010 CUTTING OVEN P.N EP-0009-073 FOR NEW HF WELDING

M/C0 0.02 4 2.33 1

43 7300711020 CUTTING PIPE P.N DIA 9 * 23, 80, TYPE 2E FOR NEW HF WELD.M/C

0 0.24 7 2.33 5

44 7300711030 CUTTING PIPE P.N DIA 3 * 23, 60, TYPE 2E FOR NEW HF WELD.M/C

0 0.02 5 2.33 1

45 7300711040 CUTTING PLATE DRG NO SS-0500-000 FOR NEW HF WELDING M/C

1 0.04 8 2.33 2

46 7300711050 BLADE-OUTER TRIMMING BLADE - 350 ML 0 0.04 5 2.33 147 7300711060 BLADE-OUTER TRIMMING BLADE - 450 ML 0 0.04 8 2.33 248 7300711070 BLADE-OUTER TRIMMING BLADE - 300 ML 0 0.04 5 2.33 149 7300712000 CONTACT PLAT [ H.F WELDING MACHINE ] 0 0.04 13 2.33 250 7300712010 PLATE CAPACITOR R. 85 – DS - 030070 [ H.F WELDING

MACHINE ]2 0.05 13 2.33 3

51 7300712020 PLATE CONTACT [ H F WELDING MACHINE } 32 0.07 13 2.33 352 7300712030 PLATE STENCIL FOR HF WELDING MACHINE 0 0.12 15 2.33 553 7300712040 CONTACT PLATE ( HF WELDING MACHINE.) 0 0.16 15 2.33 654 7300712050 CONTACT STRIP TYPE 35 0.16 15 2.33 655 7300712060 CONTACT PLATE PART NO:20573 FOR HF WELDING M/C. 10 0.16 12 2.33 556 7300712070 CONTACT PLATE PART NO:15037 FOR HF WELDING M/C. 10 0.17 12 2.33 557 7300712080 CUTTING PLATE PART NO:SS-0501-003 POS1 FOR HF

WELDING M/C.3 0.17 8 2.33 4

58 7300712090 CONTACT PLATE PART NO:20570 (36E 100) FOR HF WELDING M/C.

7 0.17 11 2.33 5

59 7300712100 CONTACT PLATE FOR H.F.WELDING M/C. 0 0.21 11 2.33 660 7300712110 CONTACT PLATE FOR H.F.WELDING M/C 11 0.24 8 2.33 561 7300712120 CONTACT PLATE FOR H.F.WELDING M/C 8 0.27 7 2.33 562 7300720250 SWITCH - PROXIMITY REED SWITCH CODE - Z - 15G M22 –

B1 0.31 7 2.33 5

63 7300720260 SWITCH - PROXIMITY REED SWITCH - CODE - HPS - IS - 25 – PNP

3 0.39 3 2.33 4

64 7300722010 SEAL KIT COMPLETE SET FOR TOX- PRESSOTECK CYLINDER (TOP DIE)

1 0.4 18 2.33 14

65 7300723000 SHEET ALUMINIUM [ H.F WELDING MACHINE ] 0 0.4 3 2.33 466 7300723010 TUBE H.F [ H.F WELDING MACHINE ] 1 0.42 8 2.33 867 7300724000 TUBE H.F [ H.F WELDING MACHINE ] 0 0.42 1 2.33 268 7300724010 PUSH ROD P.N EP-0009-063 FOR NEW HF WELDING M/C 0 0.42 1 2.33 269 7300724027 TUBE-MANDRIL GUIDE TUBE FOR NEW HF WELDING M/C. 2 0.05 1 2.33 070 7300725000 TIMER 88 886 100 TDP 48 C 2 [ H.F WELDING ] 1 0.07 12 2.33 371 7300725010 TIMER 15 K 2 RELAY 0 - 4 SEC (MEA) [ H F WELDING

MACHINE ]0 0.12 5 2.33 2

72 7300725020 TIMER - MEA 3,6, 26VAC/DC 0-4 SEC HF WELDING MACHINE.

2 0.16 7 2.33 3

73 7300726000 TRANSFORMER 140 L 57 [ H.F WELDING MACHINE ] 1 0.16 6 2.33 374 7300726010 TRANSFORMER M2/ 36648000 [ H F WELDING MACHINE ] 1 0.16 5 2.33 375 7300726020 TRANSFORMER M1/ 36648000 [ H F WELDING MACHINE ] 1 0.17 3 2.33 2



76 7300726030 H.T TRANSFORMER CODE 25 - DKH - 41 FOR NEW HF WELDING M/C

1 0.17 8 2.33 4

77 7300726040 FILAMENT TRANSFORMER CODE - 840 L44 FOR NEW HF WELDING M/C

1 0.17 7 2.33 4

78 7300727000 COPPER SHEETt - 33 GUAGE 2 FEEL WIDTH 0 0.21 6 2.33 479 7300727010 SEAL KIT COMPLETE SET FOR TOP DIE CYLINDER NEW HF

WELDING MACHINE0 0.24 4 2.33 3

80 7300727020 REGULATOR-AIR PRESSURE REGULATOR 2 0.24 10 2.33 681 7300727030 PRESSURE GAUGE FOR LEAK CHECKING MACHINE 2 0.05 10 2.33 282 7300727040 ELECTROSTATIC DISCHARGE UNIT FOR NEW HF WELDING

MACHINE0 0.07 14 2.33 3

83 7300727050 ACRYLIC BLOCK FOR HF WELDING MACHINE 3 0.12 17 2.33 584 7300730000 VALVE (FESTO) CM 5 [ H.F. WELDING MACHINE ] 1 0.16 10 2.33 585 7300730010 FESTO VALVE 5-3-G-D-3B [ H.F. WELDING MACHINE ] 2 0.16 14 2.33 686 7300730020 VALVE AIR SHUT OFF (TYPE: HE - 3 - 1/2 - QF - 12) 1 0.16 17 2.33 787 7300730030 VALVE (FESTO) 12-941[ H.F WELDING MACHINE ] 1 0.17 10 2.33 588 7300730040 VALVE (FESTO) 13327 GRLA [ H.F WELDING MACHINE ] 7 0.17 14 2.33 689 7300730050 VALVE (FESTO) 13329 GRLA [ H.F WELDING MACHINE ] 1 0.17 17 2.33 790 7300730060 VALVE (FESTO) 151190 [ H.F WELDING MACHINE ] 1 0.21 4 2.33 391 7300730070 VALVE - NON RETURN VALVE GRLA-M5-QS-6-B 3 0.24 4 2.33 392 7300730080 VALVE - NON RETURN VALVE, CODE - HQS - 6 P.N 153468 0 0.24 4 2.33 393 7300730090 VALVE - NON RETURN VALVE CODE-GRLA-1/4-QS-8-RS-B

P.N 1629680 0.03 8 2.33 1

94 7300730100 VALVE - NON RETURN VALVE, CODE-GRLZ-1/8/PK-4-8 P.N 151190

1 0.03 4 2.33 1

95 7300730110 VALVE - QUICK EXHAUST VALVE SE - 1/2-B 1 0.04 10 2.33 296 7300730120 VALVE - QUICK EXHAUST VALVE MODEL Q-4 1/2 INCH

BSP3 0.08 5 2.33 2

97 7300730130 VALVE CODE - MNIH - 5/2-D-3-FR-C 4 0.01 20 2.33 198 7300730140 VALVE - NON RETURN VALVE CODE - H - QS – 12 1 0 6 2.33 099 7300730150 VALVE - NON RETURN VALVE CODE GRLA-1/2-B 2 0.01 9 2.33 1

100 7300730160 VALVE - NON RETURN VALVE CODE-GRLA-1/8-QS-6-RS-B 6 0.01 5 2.33 1101 7300730170 VALVE - NON RETURN VALVE CODE - GRLA - M5 - QS - 6 -

RS – B3 0 18 2.33 0

102 7300800060 RUBBER SLEEVE P/N Q-241 (HOT MARKING) 10 0.06 8 1.65 2103 7300800070 CONNECTOR-MALE CONNECTOR CK-1/4-PK-6 0 0 10 1.65 0104 7300800080 CONNECTOR-PUSH-IN TEE CONNECTOR QST-8 0 0.02 9 1.65 1105 7300805000 BOLT M 5 X 16 - 10 [ HOT MARKING MACHINE ] 0 0 9 1.65 0106 7300805010 BOLT M 5 X 12 - 10 [ HOT MARKING MACHINE ] 0 0 4 1.65 0107 7300805020 BOLT M 5 X 25 - 7 [ HOT MARKING MACHINE ] 0 0.05 5 1.65 1108 7300805030 BOLT M 5 X 20 - 8 [ HOT MARKING MACHINE ] 0 0 8 1.65 0109 7300805040 PLANE STOCK, PART NO: Q 308 FOR HOT STAMPING M/C 2 0.04 8 1.65 1110 7300806000 LEFT SIDE BUSH P/N-1-73 DRG.NO:P11 HOT MARKING

MACHINE7 0.03 6 1.65 1

111 7300806010 RIGHT SIDE BUSH-P/N-1-73,DRG.NO.P10 HOT MARKING MACHINE

9 0.02 11 1.65 1

112 7300806020 BUSH - INTERMEDIATE GEAR SHAFT 15-JA.NO:1 HOT MARKING MACHIE

2 0.09 6 1.65 2



113 7300806030 BUSH FOR HOT STAMPING M/C MATERIAL : HYLUM 2 0.06 9 1.65 2114 7300806040 BUSH FOR HOT STAMPING M/C MATERIAL : BLACK

TEFLON0 0.04 3 1 1

115 7300807000 SHAFT-CHARACTER WHEEL-1 73 RG. NO: P 60 HOT MARKING MACHINE

4 0.1 4 1 1

116 7300807010 CHARACTER WHEEL P/N -1 (HOT MARKING) 8 0 4 1 0117 7300807020 INDEXING WHEEL 4 0 6 1 0118 7300807030 CHARACTER WHEEL TURNING GEAR P/N B -118 (HOT

MARKING)13 0 9 1 0

119 7300807040 RIGHT SIDE WHEEL COVER (WHITE)P/N P-61(HOT MARKING)

0 0 3 1 0

120 7300807050 LEFT SIDE WHEEL COVER (WHITE)P/N P-59 (HOT MARKING)

0 0.01 6 1 0

121 7300807060 CHARACTER PRINTING WHEEL 2.4 * 2.4 MM FLAT FACE, PART NO:P 1

3 0 5 1 0

122 7300810000 FUSE EP 7-5 [ HOT MARKING MACHINE ] 3 0.04 4 1 1123 7300810010 FUSE - GLASS FUSE P/W- EP 3 0.03 3 1 0124 7300810020 FUSE-GLASS FUSE 30 MM 1 K 0 0.49 3 1 3125 7300815000 PLATE P\N - B 172 - 3 [ HOTMARKING MACHINE ] 8 0.49 3 1 3126 7300815010 MIDDLE PLATE P\N -P 28-11 [ HOTMARKING MACHINE ] 2 0.49 3 1 3127 7300815020 MIDDLE PLATE P\N-P 27-2 [ HOTMARKING MACHINE ] 3 0.51 3 1 3128 7300815030 MIDDLE PLATE P\N -P 3-2 [ HOT MARKING MACHINE ] 14 0.51 10 1 7129 7300815040 MIDDLE PLATE P\N -P 5-2 [ HOT MARKING MACHINE ] 7 0.51 10 1 7130 7300815050 MIDDLE PLATE P\N -D 4-22 [ HOT MARKING MACHINE ] 5 0.68 10 1 9131 7300815060 DISK PLATE FULL SET [ LETTER & NUMBER ] HOT

MARKING MACHINE0 0.68 6 1 6

132 7300815070 ARM & HANDLE SET (SET OF P/N W1 521 THROUGH 547) 0 0.84 7 1 9133 7300816000 COVER (A, RIGHT), PART NO: P.61 FOR HOT STAMPING

M/C0 0.84 7 1 9

134 7300816010 COVER (B), PART NO. P 48 FOR HOT STAMPING M/C 0 0.84 9 1 11135 7300816020 COVER (A, LEFT), PART NO. P 59 FOR HOT STAMPING M/C 0 0.86 7 1 8136 7300820000 NUT & WASHER [ HOT MARKING MACHINE ] 2 0.03 2 1 0137 7300820010 WHEEL WASHER (LEFT), PART NO. P 5 FOR HOT STAMPING

M/C0 0.03 2 1 0

138 7300820020 WHEEL WASHER (RIGHT), PART NO: P 3 FOR HOT STAMPING M/C

0 0.04 4 1 1

139 7300820030 WHEEL WASHER, PART NO: P4 FOR HOT STAMPING M/C 0 0.08 4 1 1140 7300820040 GEAR COLLAR WASHER (A), PART NO. P 32 FOR HOT

STAMPING M/C0 0.01 4 1 0

141 7300820050 GEAR COLLAR WASHER (B), PART NO. P 30 FOR HOT STAMPING M/C

0 0.01 4 1 0

142 7300820060 GEAR WASHER (B), PART NO. P 28 FOR HOT STAMPING M/C 0 0.01 4 1 0143 7300820070 GEAR WASHER (LEFT), PART NO. P 27 FOR HOT STAMPING

M/C0 0.03 4 1 0

144 7300820080 GEAR WASHER (RIGHT), PART NO. P 27 FOR HOT STAMPING M/C

0 0.04 1 1 0

145 7300820090 WHEEL WASHER, PART NO: P 45 FOR HOT STAMPING M/C 0 0.08 1 1 0146 7300821000 SOLENOID VALE MODEL VP 300, 7/W, V - 100AC HOT

MARKING M\C2 0.01 1 1 0



147 7300845000 HEATER P\N -P- 2-1 [ HOTMARKING MACHINE ] 4 0.02 2 1 0148 7300845010 HEATER 230 V 200 W PART FOR H 402 A 12 [HOTMARER] 1 0.42 4 1 3149 7300845020 HEATER - TUBULAR HEATER FOR HOT MARKING M/C

BRASS BODY2 0.42 2 1 2

150 7300846000 RELAY - MATSUSHITA HC2-H-AC 110V, 100/110V 0 0.45 3 1 3

ECONOMIC ORDER QUANTITY

It is that quantity at which the cost of procuring the annual requirement of an item and the

inventory carrying cost are equal.i.e. where the total of the two costs is the lowest.

The formulae for finding the EOQ of an item is

Q= (2AP/UC) ^ (1/2)

Where A = Annual Average consumption in units

P = Procurement cost per order (1000 per order)

C = Inventory carrying cost (30% of unit price)

U = Unit price.

EOQ is calculated for 500 items of spares and out of which 150 items is shown below

Table 4-Calculation of EOQ

NO ITEM CODE ITEM NAME AAC

UNIT PRICE

EOQ

1 7000100000 ACTIVATED ALUMINA (DESICANT) FOR HEATLSS TYPE DRIER 2 281.11 02 7000200000 BEARING ROLLER 30204 SKF 2 153.92 13 7000200020 BEARING ROLLER 3NU06EC/306 1 905.87 04 7000200040 BEADING - TOP COVER BEADING FOR HEATER MIXER M/C 98 1078 15 7000210000 BEARING - BALL 6308 1 306.23 06 7000210010 BEARING - BALL 6306 2 152.88 17 7000210020 BEARING – BALL 6203 Z 1 49.43 28 7000210030 BEARING – BALL 6000 ZZ 5 58.24 39 7000210050 BEARING BALL 340 V 3 3 336.06 0

10 7000210080 BEARING BALL - NO: 6205 4 101.17 211 7000210090 BEARING BALL - NO: 6202 52 44.72 1312 7000210100 BEARING BALL NO:6306 4 167.47 113 7000210120 BEARING DEN316 1 6032 014 7000210130 BEARING 6314 - FOR KIRLOSKAR MOTOR 100HP FRAME LCW 2505 40 1018.16 115 7000210140 BEARING – BALL 6307 - REQUIRED FOR VOLTAS WATER PUMP 1 285.87 016 7000210150 BEARING – BALL BEARING 6206 2Z 3 174.72 117 7000210160 BEARING BALL NO: 6203 15 56.11 618 7000210170 BEARING BALL NO: 6308 1 260 019 7000210180 BEARING 6004 ZZ 2 69.68 220 7000210190 BEARING-TAPER ROLLER 30303 FOR STERILIZER BLOWER. 1 462.18 0



21 7000210200 BEARING - ROLLER BEARING T - 1782 Q 30 3016 022 7000210210 BEARING NEEDLE FOR SWAGING M/C B 1816 30 95.68 523 7000210220 BEARING 6003 6 92 224 7000210230 BEARING 6301 1 100 125 7000210240 BALL FOR AUTO CLAVE TROLLEY ( 1/4 " ) 2 0.33 35026 7000210250 BALL FOR AUTO CLAVE TROLLEY ( 3/5 " ) 2 0.42 27527 7000211000 BEARING BALL 6000 Z 2 57.2 228 7000211010 BALL BEARING 627 Z 2 52 229 7000211030 BEARING – BALL BEARING 6202 ZE 2 49.43 230 7000211040 BEARING – BALL BEARING 608 Z 1 41.6 231 7000211050 BALL BEARING 6001-Z 15 54.76 632 7000211060 BEARING - SPACER BEARING (DG SET) 5 11.23 1633 7000212000 BEARING – BALL SKF 6206 ZZ 1 154.68 134 7000212010 BEARING BALL - NO: 6203 ZZ 33 69.68 735 7000212020 BEARING BALL NO: 6204 ZZ 2 85.19 136 7000212030 BEARING BALL NO: 6205 ZZ 3 131.25 137 7000212040 BEARING BALL NO: 6305 ZZ 1 117.14 138 7000212050 BEARING BALL NO: 6207 ZZ 1 168.48 039 7000212060 BEARING BALL NO: 6208 ZZ 4 187.12 140 7000212070 BEARING BALL NO: 6209 ZZ 1 234 041 7000212080 BEARING BALL NO: 6210 ZZ 1 249.6 042 7000212090 BEARING BALL NO: 6216 ZZ 38 1456 043 7000212100 BEARING BALL NO: 6218 ZZ 1 2080 044 7000212110 BEARING BALL NO: 6320 25 2912 045 7000212120 BEARING BALL NO: 6221 ZZ 1 4264 046 7000212130 BEARING BALL NO:6206 ZZ 2 164.3 147 7000212140 BEARING BALL NO: 6000 ZZ 87 52 1548 7000212150 BALL BEARING 629 -2Z 18 46.8 749 7000212160 BEARING 6002 ZZ 2 102.49 150 7000213000 BEARING BALL NO: 6308 UU 11 400.4 151 7000213020 BEARING BALL NO: 6310 UU 24 571.22 152 7000213040 BEARING BALL NO: 6304 UU 1 152.5 153 7000213050 BEARING BALL NO: 6305 UU 1 130 154 7000213060 BRARING BALL NO: 6306 UU 24 258.43 255 7000213070 BEARING BALL NO: 6309 UU 2 535.6 056 7000213090 BEARING BALL NO: 6312 UU 5 858 057 7000213100 BEARING BALL NO: 6314 UU 1 1873.58 058 7000213110 BEARING BALL NO: 6315 UU 1 3027.44 059 7000213120 BEARING BALL NO: 6316 UU 24 2886 060 7000213130 BEARING BALL NO:6306 1 152.88 161 7000221000 BEARING PILLOW BLOCK UCP 208 NTN 2 2014.54 062 7000221010 BEARING PILLOW BLOCK UCP 206 NTN 1 656.74 063 7000221020 BEARING PILLOW BLOCK UCP 204 NTN 24 364 164 7000221030 BEARING PILLOW BLOCK UCP 205 NTN 6 379.6 165 7000221040 BEARING - PILLOW BLOCK BEARING 3/4" 4 348.4 066 7000230000 BEARING PLUMBER BLOCK I D 1 1\4" 4 691.6 067 7000230010 BEARING – PILLOW BLOCK BEARING P 210 J 8 1102.4 068 7000230020 BEARING – PILLOW BLOCK BEARING UL 508 3 842.4 069 7000230030 BEARING – PILLOW BLOCK BEARING UC 204, INNER DIA : 19 MM 30 364 170 7000250000 BUSH -BRASS MAKE: BEACON TYPE : 3 DM 4 [ 10 HP] 1 310 0



71 7000252000 BRUSH - SLIPRING CARBON BRUSH SET MODEL:NO:LCW 250 S 1 46.8 272 7000300000 CERAMIC CANDLE FOR HEATLESS TYPE DRIER OD: 70, ID: 40 4 1326 073 7000301000 SPECIALIX TERMINAL ADAPTOR - 8 PORT 2 39.5 374 7000301010 SX PCI 32 PORT SPECIALIX CARD 2 16790 075 7000301020 ETHERNET CARD 16 450 176 7000301030 DATA CABLE – PRINTER 3 1600 077 7001301060 MOTOR INDUCTION 3 PHASE MAKE : KIRLOSKAR 2 3781 078 7001301070 MOTOR - INDUCTION - 3 PHASE MAKE : KIRLOSKER 3 2859 079 7001301130 MOTOR INDUCTION 0.37 KW / 0.55 HP 690\1690 RPM FLANGE 2 5665.25 080 7001301140 MOTOR INDUCTION 3 PHASE 3.7 KW/ 5 HP TYPE: FLANGE 1 6984 081 7001301150 MOTOR - D.C-15 KW- MAKE-KIRLOSKAR. 2 41522.03 082 7001301160 MOTOR-D.C.-3.7 KW - MAKE-KIRLOSKAR. 2 23557.04 083 7001301170 MOTOR -D.C.-1.5 KW-MAKE-KIRLOSKAR. 170 13444.08 084 7001301190 INDUCTION MOTOR-0.25 KW.-MAKE KIRLOSKAR. 162 3357 085 7001301200 BLOWER WITH INDUCTION MOTOR-0.075KW 1 6115.2 086 7001301210 MOTOR FOR SHUNT OVEN,RATING:1/35 HP 150 677 187 7001301220 MOTOR 2 HP FOR COOLING TOWER 3 12319 088 7001610000 BLADE - D 5910 [ PHOTOCOPY MACHINE ] 1 1146.6 089 7001610010 HEAT ROLLER D 5910 [ PHOTOCOPY MACHINE ] 4 2996 090 7001610030 DEVELOPER - D 5910 [ PHOTOCOPY MACHINE ] 1 1911 091 7001610050 DRUM 5910 [ PHOTOCOPY MACHINE ] 4 8736 092 7001610060 LAMP EXPOSURAL FOR PHOTO COPIER THOSHIBA 5910 1 3822 093 7001610070 TONNER 139 1092 194 7001610080 BLADE - RECOVERY [ PHOTOCOPY MACHINE ] 1 1365 095 7001610090 BLADE - H [ PHOTOCOPY MACHINE ] 2 899 096 7001610100 PRESSURE ROLLER [ PHOTOCOPY MACHINE ] 4 3116 097 7001610110 HEATER KIT-FOR PHOTOCOPY MACHINE 130 7098 098 7001610120 LAMP - HEATER LAMP FOR PHOTO COPY MACHINE 1 2736 099 7001620020 MONOBLOCK PUMPSET MOTOR -1HP RPM-2880 440V.PUMP 2 8840 0

100 7001620030 PUMP-ISMATEC MICROPROCESSOR CONTROLLED 16 CHANNEL CARTRIDGE 2

11 35949.3 0

101 7001620040 PUMP- HIGH VACUUM PUMP FOR ETO STERILISER. 1 20592 0102 7001620050 PUMP - SUBMERSIBLE PUMP HP : 2, PHASE : 3, HEAD: 99MM 1 16250 0103 7001620060 PUMP MONOBLOCK HP: 5, KW: 3.7, DELIVERY HEAD: 24M 3 8200 0104 7001620070 PUMP - MONO BLOCK PUMP HP : 0.5, PHASE : SINGLE 1 2600 0105 7001620080 PUMP - FLAME PROOF PUMP WITH MOTOR 1 12084.8 0106 7001630000 PRINTER HEAD FOR TVSE MSP 155 PRINTER (9 PIN) 4 3750 0107 7001630010 HEAD-PRINTER HEAD 24 PIN 4 4800 0108 7002000000 TYRE 700*15 MAKE: CEAT / MRF / MODI 3 3030 0109 7002000010 TUBE 700*15 MAKE: CEAT / MRF /MODI 1 220 0110 7002000020 THERMOSTAT FOR REFRIGERATOR - 165 LTRS. 2 180 1111 7002000030 REMOTE CONTROL-SPARES FOR ZWICK UNIVERSAL TESTING MACHINE. 9 70293.17 0112 7002000040 CONNECTION REMOTE CONTROL UNIT. 4 75679.73 0113 7002000050 TONNER - FOR CANNON PHOTOCOPY MACHINE : MODEL NO.NP.6016 1 3135 0114 7002000060 TYRE 590 * 15 MAKE: CEAT/MRF 2 1175 0115 7002000070 TUBE 590 * 15 MAKE: CEAT/MRF 2 200 1116 7002000080 THERMOSTAT FOR WATER COOLER 1 286 0117 7002000090 TYRE - JK.TYRE - RADIAL 215/75 R15 100 S. 110 3375 0118 7002000100 TUBE - RADIAL JK 215/75 R15 100 S. 4 295 1119 7002000110 THERMOSTAT DANFOSS KP 69 1 2900 0120 7002001000 TERMINAL BLOCK FOR MONO BLOCK PUMP TYPE: 3 DM 4 2 390 0



121 7002200000 VALVE - SOLENOID FOR VACUUM SEALING M/C. 100 1606.5 1122 7100000030 PLATE -FOR WINDING MACHINE-(CU-T). 1 40 2123 7100000050 WIRE GUIDE SHAFT: PART 1 & 2 FOR CU-T WINDING M/C 100 650 1124 7100000070 BLOWER IMPELLAR FOR AHU 4 7200 0125 7100000080 DIE ASSEMBLY FOR SWAGING MACHINE OF 380-A COPPER-T 100 11845 0126 7100000090 HAMMER FOR SWAGING M/C DIE 5 624 0127 7100000100 SHIM FOR SWAGING M/C DIE 4 83.21 2128 7100000110 BLADE - CUTTING BLADE FOR PP COVER MAKING M/C 5 2298.5 0129 7100000120 COMP - SEGREGATOR COMP FOR CU - T 6 42 5130 7100000130 SCREW AND NUT WITH WASHER 4 MM * 8 MM (SS) 18 3 115131 7100000140 STATIC ELIMINATOR COMPLETE SET (FOR PP COVER SEALING M/C) 8 16599 0132 7100000150 BELT – CNOVEYOR BELT (FOOD GRADE) FOR PP COVER SEALING M/C 3 3024 0133 7100000160 FOAM FOR BB SEALING MACHINE 7 260 1134 7100000170 HYLAM BLOCK FOR CU-T SEALING MACHINE 2 50 2135 7100000180 MOTOR-AC GEARED MOTOR FOR PP COVER SEALING M/C 2 8702 0136 7100009000 TIMER-SPECIAL TYPE FOR CU-T VETROD SEALING M/C. 2 1518.71 0137 7100009010 CAPACITOR 160MFD, 450V DC - (VETROD M/C) 1 192.6 0138 7100030010 GUIDE ASSEMBLY UNIT WITHOUT SPINDLE, WITH ALL SCREWS 3 1976 0139 7100030020 DIE ASSEMBLY FOR SWAGING M/C 1 11845 0140 7100030030 WIRE GUIDE ASSEMBLY:FOR CU-T WINDING M/C 2 1985 0141 7100030040 GUIDER ASSEMBLY: FOR CU-T WINDING M/C 2 1248 0142 7100040000 HEATING ELEMENT FOR IMPLUS HEAT SEALING MACHINE H 311 -16206 2 337.5 0143 7100070000 RECTIFIER FOR SEALING MACHINE MODEL 15 MG 1\4 WC [161-C473] 2 1200 0144 7100080000 FIXTURE-ASSEMBLY FIXTURE SET FOR CU-T 3 1200 0145 7100100010 THERMOCOUPLE FOR T – FORMING INJECTION MOULDING M/C 1 459.91 0146 7100100020 THERMOCOUPLE FOR PLUNGER FORMING INJECTION MOULDING M/C 4 459.91 0147 7100100040 DME Ejector side Spring For 8- cavity Tee Mould 3 254 1148 7100100050 BLACK & WHITE TELEVISION 1 788 0149 7100101000 RING CHECK VALUE 40 NI PART NO: 2808.300.0140 1 34214.34 0150 7100101010 R. P. SET FOR PLUNGER FORMING MACHINE (PVC) 1 3052.92 0

The EOQ of 500 items of spares are calculated and out of which 150 items are shown in

the Table 5 for reference. The EOQ is calculated with the help of Annual consumption,

unit price which is collected from the IT department. The procurement cost is given by

the Finance department

Calculation of Money blocked in Non moving spares

The excess of money blocked in the non moving spares is identified using aging analysis.

The age wise analysis is done using the stock in hand, its value, number of days and thus

the money blocked by this spares. The age wise analysis is simple and can be done only

with the help of stores department.

Table 5 –Calculation of money blocked



NO Item Code Item Name UOM QTY Days Months Value in Rs

1 7300200010 SCREW FOR PELLETIZER M/C

NOS 1 2481 82 85445

2 7300200020 BARREL FOR PELLETIZER M/C

NOS 1 2481 82 69577

3 7300211000 BEARING BALL 6218-Z [PELETIZER]

NOS 8 3761 124 19552

4 7300211010 BEARING BALL 6310-Z [PELETIZER]

NOS 6 3329 109 4069

6 7300211030 BEARING SPHERICAL ROLLER 22207 [PELETIZ

NOS 4 2036 67 5305

8 7300211040 BEARING SPHERICAL ROLLER THRUST 29415 [P

NOS 4 3742 123 38272

9 7300211050 V BELT C-85 [PELETIZER] NOS 7 2485 82 113210 7300211060 HEATER FLAT STRIP 170

MM X 80 MM { FOR PNOS 5 1955 64 780

11 7300212000 KNURLING WHEEL FOR PELLETISER CUTTING UN

NOS 1 1399 46 3250

12 7300220070 SUCTION BELLOWS NOS 2 1290 42 100013 7300230020 VALVE BUTTERFLY 2" NOS 3 2272 75 256514 7300300180 COMPRESSOR KIRLOSKER

COPLAND AH 5515 ENOS 1 1318 43 25500

15 5019000070 COIL ONLY FOR SOLENOID MAKE(FLOCON,AVCON

COL 11 34 1 2023

16 6100301200 CARD-ADC WITH DIGITAL INPUT/OUTPUT

NOS 1 1927 63 19800

17 6100303070 CARD - ADC CARD PCL - 207

NOS 1 1581 52 4250

18 6100306010 RELAY-PILZ. NOS 3 1496 49 4523419 6100306030 RELAY- EARTH FAULT

RELAY(INVERSE)TYPE CDNOS 2 2239 74 12064

20 6101801120 MOTOR INDUCTION 0.37 KW / 0.55 HP 690\

NOS 1 2495 82 5665

21 6101801150 MOTOR-D.C.-3.7 KW - MAKE-KIRLOSKAR.

NOS 1 2420 80 23557

22 7001301130 MOTOR -D.C.-1.5 KW-MAKE-KIRLOSKAR.

NOS 1 2443 80 13444

23 7001301160 PCLD 7702 REV A1 NOS 8 1896 62 2600024 7001301170 BAYONET BUSH 70MM NOS 6 2737 90 36825 7201000000 MONOLITHIC RECTIFIER

BRIDGE MD6BU1514NOS 2 2737 90 1104

26 7300200060 CARD-LOGIC- INJECTION MOULDING MACHINE F

NOS 2 1796 59 6500

27 7300200070 DIAGNOSTIC CARD - FOR INJECTION MOULDING

NOS 2 1796 59 8963

28 7300300300 BARREL -INJECTION BARREL FOR INJECTION M

NOS 1 1887 62 31350



29 7300300340 CARD - DIGITAL I/O CARD - 144 LINES - SI

NOS 1 1904 63 3550

30 7300300470 CARD – DYNALOG DMS 2726 V 2.0

NOS 4 1466 48 47200

31 7300305000 CARD - DYNALOG DMS 2711

NOS 1 1904 63 19800

32 7300307000 INPUT CARD FOR DGP WINDSOR FRK 40 INJECT

NOS 2 2351 77 10669

51 7300313000 SPEED CONTROLLER AS32OOS-O2-1OS(SMC)

PC 1 2239 74 1399

52 7300315020 SOLENOID VALVE - VF5120-2G-03(SMC MAKE)

SET 1 2239 74 9906

53 7300316020 AUXILARY RELAY, TYPE -MY4N, MAKE - OMRON

SET 4 1216 40 1560

54 7300504030 RELAY - LY 2N CR 100- 110 V [SHEET EXTRU

NOS 3 2198 72 1582

55 7300567030 SWITCH - MAGNETIC SWITCH MSO K 25 [SHEE

NOS 2 2769 91 13791

56 7300600010 SWITCH - MAGNETIC SWITCH MSO K 10 [SHEET

NOS 2 2769 91 9705

63 7300600020 PLC INPUT / OUTPUT PORT EA 22 0620 - 4

NOS 2 2622 86 81215

64 7300600180 SENSOR-ELECTRONIC PROXIMITY SENSOR WELDI

NOS 6 1703 56 17806

65 7300600200 SENSOR-ELECTRONIC PROXIMITY SENSOR WELDI

NOS 5 2769 91 16676

68 7300600240 POTENTIOMETER P3 (2K2 , LIN DR GEWUND.)

NOS 2 1608 53 24

69 7300600260 POTENTIOMETER 10K 1 TURN

NOS 4 1204 40 60

70 7300600300 NIPPLE PART NO: SS-0501-002 POS1 FOR HF

NOS 10 2774 91 51076

71 7300600310 COIL-SOLENOID COIL FOR MFH-3-1/8 SOLENOI

NOS 2 1176 39 798

72 7300600320 MOTOR - AC MOTOR FOR LINEAR INDEXING SY

NOS 1 1661 55 1430

73 7300600330 PROXIMITY SENSORS FOR OLD HF WELDING M/

NOS 7 1703 56 6290

74 7300600370 SPARE FOR OLD HF WELDING M/C TYPE: CAB-1

NOS 1 1841 61 593

88 7300600380 DOUBLE ACTING CYLINDER FOR OLD HF WELDIN

NOS 2 1839 60 6360

89 7300600390 DOUBLE ACTING CYLINDER FOR OLD HF WELDI

NOS 2 1526 50 19670



90 7300600400 DOUBLE ACTING CYLINDER FOR OLD HF WELDIN

NOS 1 1703 56 2304

91 7300600410 DOUBLE ACTING CYLINDER EMGQM-32-15

NOS 2 1540 51 19670

92 7300600420 CONTACT 12919 (4F249) HF WELDING MACHINE

NOS 5 1204 40 77

93 7300600430 CONTACT 20571 HF WELDING MACHINE.

PKT 6 2192 72 6500

94 7300600480 MINI CONTACTOR, P.N LP4-K0601 BW2 FOR NE

NOS 2 2383 78 2897

95 7300618010 CIRCUIT BREAKER S 272 K 6 A [ H.F. WELD

NOS 1 1661 55 82

96 7300652000 CIRCUIT BREAKER M - 25 TM - 4 R.5165 [ H

NOS 1 1661 55 74

97 7300652010 CAPACITOR-LEAD THROUGH CAPACITOR DDMZ-3-

NOS 3 1767 58 1099

98 7300655000 CAPACITOR CODE - LK - 100 - 504 FOR NEW

NOS 1 2380 78 6730

99 7300655010 CAPACITOR - FEED THROUGH CAPACITOR FOR N

NOS 2 2380 78 33102

100 7300655070 CAPACITOR - FEED THROUGH CAPACITOR FOR N

NOS 2 2380 78 7577

101 7300655100 VACUUM CAPACITOR CODE CKT - 100 - 0035 F

NOS 2 2380 78 35276

102 7300655110 PLATE CAPACITOR CODE-PD70-13KV-160PF-20%

NOS 1 2380 78 5169

103 7300700010 CAPACITOR- 1000PF +/- 20% FOR BOTTOM DIE

NOS 2 1206 40 226

104 7300700020 CARD LIMIT CONTROL [ H.F WELDING MACHIN

NOS 4 1640 54 48213

105 7300700110 E - STOP MODULE CODE=KI P.N XPS AM5140 H

NOS 1 2383 78 9900

106 7300700120 GUARDS SAFETY MODULE CODE=K5 P.N XPS AS5

NOS 1 2383 78 6270

107 7300700160 TWO - HAND CONTROL DEVICE, CODE = K8, P.

NOS 1 2383 78 16510

108 7300700170 ANALOG COMBO MODULE 24V DC CODE ES P.N

NOS 1 2383 78 40903

109 7300700180 POSIITIVE / NEGATIVE LOGIC 24 V DC,

NOS 2 2184 72 58168

110 7300700310 POSITIVE LOGIC 24 V DC, 0.5 A

NOS 2 2184 72 73375

111 7300700350 HEATING ELEMENT CODE 1000W FOR NEW HF WE

NOS 1 2380 78 2011



112 7300700510 MICRO FILTER I MICRON MODEL : LFMB-3/

NOS 1 1703 56 5110

113 7300700760 CONTACT PLATE PART NO:15037 FOR HF WELDI

NOS 10 2774 91 43585

114 7300700800 CUTTING PLATE PART NO:SS-0501-003 POS1 F

NOS 3 2774 91 39839

115 7300700820 BLANKING PLATE, TYPE CDB ¼

NOS 1 1839 60 760

116 7300702020 PHOTO CELL VT 180 - P - 142 [ H.F WELDI

NOS 3 2867 94 26193

117 7300703030 RECTIFIER UGE 3126 AY4 [ H.F WELDING MA

NOS 8 3082 101 12681

118 7300703050 AMPEREMETER CODE EIV 96 0-4A FOR NEW HF

NOS 1 390 13 56

119 7300703060 RESISTOR CODE ZSDI 150 K 150 W FOR NEW H

NOS 1 2380 78 2023

120 7300703080 RESISTOR CODE CDWI 390 OHM 250W FOR NEW

NOS 1 2380 78 1443

121 7300703110 RESISTOR CODE 250 OHM 12 W CDWI INST FOR

NOS 1 2380 78 307

122 7300703130 RELAY OMRON MK 3 PN - 5S [ H.F. WELDING

NOS 1 1904 63 435

123 7300703170 RELAY - EMERGENCY STOP P NOZ [ H.F WE

NOS 3 2329 77 68098

124 7300703200 RELAY SCHRACK MK3P 11 PINS 24VAC HF WELD

NOS 3 3082 101 2696

125 7300703320 RELAY-PITZ EMERGENCY STOP RELAY TYPE 17.

NOS 4 1496 49 49128

126 7300703330 RELAY-PITZ 2-HAND CONTROL RELAY TYPE P2H

NOS 2 2622 86 92453

127 7300703350 RELAY CODE MY2K 12V DC FOR NEW HF WELDIN

NOS 1 2380 78 845

128 7300703370 RELAY - POWER RELAY CODE - K2 TYPE A12

NOS 2 2184 72 6720

129 7300703380 SUB BASE, TYPE NAS 1/4 - 01 - VDMA

NOS 1 1839 60 457

130 7300703390 RELAY-OVER LOAD RELAY,TYPE:LR2D13 FOR NE

NOS 2 1290 42 1740

131 7300703400 COOLING ROD FOR WELDING PIN FOR TRANSFE

NOS 6 483 16 1252

132 7300703470 SPARK PLUG [ H.F WELDING MACHINE ]

NOS 1 2192 72 0

133 7300704030 SWITCH PROXIMITY SMEO 0-1-LED-24 [ H.F W

NOS 2 1180 39 1976



134 7300704040 SWITCH PROXIMITY (TYPE : SME-3-LED-24-K5

NOS 4 1231 40 4796

135 7300704050 SWITCH-MAIN SWITCH(SI) N60 EA4+SV4.

NOS 2 2622 86 32003

136 7300705040 PRESSURE SWITCH CODE-PEV-1/4-B P.N 10773

NOS 1 2380 78 4634

137 7300705070 SWITCH - PROX REED SWITCH P.N SMEO-S-LED

NOS 2 2380 78 3553

138 7300706060 SWITCH - PROX REED SWITCH P.N SME - 3SQ

NOS 2 2380 78 3212

139 7300706070 SWITCH - PROXIMITY REED SWITCH CODE SME

NOS 4 1745 57 3372

140 7300706090 WITCH - PROXIMITY REED SWITCH CODE SM

NOS 4 1745 57 1734

141 7300706100 PUSH BUTTON SWITCH FOR APC ON/OFF WITH I

NOS 1 1368 45 20

142 7300706110 SEAL KIT DRG NO AA-1000-000 FOR NEW HF W

NOS 1 2383 78 503

143 7300706120 SEAL KIT DRG NO PP-0226-000 FOR NEW HF W

NOS 1 2383 78 21301

144 7300706140 SEAL KIT CODE-DNC-40-PPV-A P.N-369196 FO

NOS 1 2380 78 3017

145 7300707010 SEAL KIT MGQ - 32 - PS FOR NEW HF WELDIN

NOS 1 2184 72 844

146 7300708030 SEAL KIT FOR SMC CYLINDER TYPE : MGQM

NOS 3 1980 65 765

147 7300708040 TIMER - MEA 3,6, 26VAC/DC 0-4 SEC HF WEL

NOS 2 3082 101 11667

148 7300708050 H.T TRANSFORMER CODE 25 - DKH - 41 FOR N

NOS 1 2380 78 111303

149 7300708060 FILAMENT TRANSFORMER CODE - 840 L44 FOR

NOS 1 2380 78 16671

150 7300709000 VALVE (FESTO) CM 5 [ H.F. WELDING MACHI

NOS 1 1839 60 3985

The 294 spares which are identified as non moving spares in the FSN analysis is taken to

calculate the money blocked in the non moving spares. The calculation shows that around

Rs 2135240 is being blocked in the non moving spares. This shows the need of an

effective and efficient Spare parts management in the organization. So more care has to

be taken in the case of reorder level of the machine spares



FISHBONE DIAGRAM

Using the fishbone diagram the reasons contributing to excess number of spares and

money blocked were identified. The reasons were analyzed in discussion with concerned

employees and executives.

Fig 1-Fish bone diagram

Lack of Lead time monitoring Lack of proper training

Non Non indegenous lack of inventory Availability of Spares planning Matching parts Lack of

Data analysis

Purchase of Lack of Recommended spares Experience


Excess of money blocked

Purchase Men

Method Machine


Effective implementationMonitoring of quality of machine scheduleIn spares Maintenance Machine breakdown Excess inventory problem

Duplication of itemInventory Code Mgmt techniques Monitoring the deterioration Availability of data on Of spares machine failure

The major causes of the problem can be broadly included in the following category

Men

Purchase

Method

Machine

From among the above possible causes shown in the fish bone diagram, the company is

likely to be affected by the following reason.

Non indigenous spares: - As most of the machines used in the company are

imported from foreign countries, the spares are also not indigenous. So the

department tends to purchase a large number of spares if the break down occurs.

Lack of inventory planning: - The responsible departments are not aware of any

inventory control methods and techniques that are available to properly control

the excess inventory.

Lack of training: - Those workers who are operating the machine are not trained

in routine maintenance management and the executives are not trained in proper

management.

Monitoring of quality of spares: - The quality of spares is not frequently

monitored and some times spares had to be ordered again or will be in store.



Application of Inventory management techniques: - The inventory management

techniques like ABC, VED, FSN, HML etc can be carried out to find out the

status of spares.

Duplication of codes:- The item code of spares can be duplicated and thus excess

of items will be ordered even if the same item is there in the stock.

Machine breakdown:- Due to the non availability of data regarding the frequency

of machine breakdown.

Data regarding machine breakdown or replacement of spares are not kept for

analysis and proper planning of spares.

All the spares recommended by the suppliers of the machinery are purchased

without due analysis of requirement based on probability of failure.

.

CHAPTER-5



FINDINGS

\

FINDINGS

The VED Analysis shows that among 500 spares, 116 items are Vital, 264 are

Essential and 120 items are Desirable

The ABC Analysis shows that among 500 spares, 22 items are under the Class A,

55 under B and 423 items under Class C

The FSN Analysis shows that among 500 spares, 294 items are non moving and

the rest 206 items includes Slow and Fast moving spares.

The inventory control parameters like ROL and EOQ is fixed for the same 500

items of spares.

The study reveals that Rs 2135240 are being blocked by the Non moving Spares.

The main reasons for accumulation of spares under slow moving and non moving

category are found to be:

Lack of inventory planning and monitoring of spares.

Purchase of spares recommended by suppliers without proper analysis of

requirement based on probability of failure.

Record of machine failures is not kept.



Duplication of spare codes.

Lack of training in maintenance management for operators and inventory

management fro executives.

CHAPTER-6

SUGGESTIONS, RECOMMENDATIONS AND

CONCLUSIONS



6.1 SUGGESTIONS and RECOMMENDATIONS

The major problem identified in the context of Spares part Management is that a large

amount of money is blocked by the excess inventory of Non moving spares. So the

suggestions include:

The spares that are useful for the other units of HLL can be identified from the

excess inventory and can be given for their use.

The quality of spares beyond 5 years may be checked out. If unsuitable, they may

be disposed off.

The possibility of salvaging the scrap may be examined.

The classification and analysis may be done on all the other remaining spares.

Detailed analysis of the excess inventory may be done and effective inventory

planning and monitoring systems may be implemented.

Requirement of spares may be estimated based on analysis of probability of

failure prior to purchase.

Proper training in maintenance may be provided to operators and inventory

management techniques to executives.

All the spare codes may be examined to identify duplication,

.



6.2 CONCLUSION

Spare parts management is the most important and dynamic area of Materials and

Inventory Management requiring a high degree of attention. The study of machine spare

parts at HLL reveals the extent of excess spares, money blocked in it and also the reasons

there of.

The researcher could get the exposure to the practical issues in the spare parts

management. The findings derived out of the study throws light on the need for

improving inventory planning, monitoring, training of employees and effective decisions

on purchase of spares. It is also recommended that the study can be extended to all the

other spares.

.

It is unlikely that all theoretical problems of spare parts management will ever have

complete solution. Any control system to be introduced and degree of success to be

attained obviously depends upon the initiative, culture of the organization, inter-relations

among the different departments in the form of cooperation and coordination. The

organization should have enthusiasm to change things, when they need to be changed,

when they cannot be changed..



BIBILOGRAPHY

Reuben Roy, “Stores Management”( Himalaya Publishing Company: New Delhi-

First Edition 1997)

A.K.Datta, “Materials Management , Inventory Control and Logistics”( Jaico

Publishing Home: New Delhi-Second Edition 1995)

K.S.Menon, “Stores Management” (Mc Millan Publishing Company: New Delhi-

First Edition 1983)

Richard B Chase, F Robert Jacobs, Nicholas J Aquilano, Nitin K Agarwal,

“Operations Management for Competitive advantage” ( Mc Graw Hill Publishing

Company- New Delhi- Eleventh Edition 2006)

Benjamin.S.Blanchard,” Logistics,Engineering and Management” (Pearsons

Education- New Delhi-First Edition 2006)


spare part management

Documents

case of spare parts

environmental management

supply of spare parts

spare parts planning

management hierarchy

elite management

maintenance management

extra parts available