Spare Parts Inventory Management in Engine Repair Shops (Case Study)

Abstract

Most of engine companies face the problem of holding and ordering spare parts that are used in maintenance operations. This study investigates the factors of spare parts inventory management for PENTA Diesel Generator in VOLVO Engineering Co. Ltd. The spare parts consumption data was collected from the heavy equipment department. ABC analysis approach was used for classifications of spare parts. Spare parts ordering and holding policy was suggested based on the classification obtained from this approach, the calculation of the Economic Order Quantity for all the spare parts will reduce the ordering cost and holding cost by not storing unnecessary spare parts. Making comparisons between the obtained values and the data collected from the company and it has been found that there are differences between the ordered quantities which increases the cost and makes the customer dissatisfied. The study came to a number of conclusions, the most important of which is that utilizing ABC inventory analysis for spare parts helps the company to place tighter and more frequent controls on high-priority inventory or class A inventory, It is important to constantly monitor the demand for class A and ensure stock levels match that demand. The study also placed a number of recommendations, the most important of which is that categorizing the stored materials into several subsystems (spare parts which have a same application) with ABC classification to insure more efficient handling of the resources and easy to control.