Chapter-1: A Study On Spare Parts Management at HLL

A study on Spare parts Management at HLL
CHAPTER-1
INTRODUCTION
TKM Institute of Management
A study on Spare parts Management at HLL INTRODUCTION Hindustan Latex Ltd. (HLL), a Government of India Enterprise under the ministry of Health and Family Welfare is the leading produ er of ontra eptives and Health are produ ts. !he study "as underta#en in the Health are division of HLL at $##ulam, !rivandrum. !he aim of the study is to get the exposure to the pra ti al issues in the spare parts management. !he advent, through altruism or legislation, of environmental management has added a ne" dimension to inventory management%reverse supply hain logisti s. Environmental management has expanded the num&er of inventory types that firms have to oordinate. In addition to ra" materials, "or#%in%pro ess, finished goods, and '() goods, firms no" have to deal "ith post% onsumer items su h as s rap, returned goods, reusa&le or re y la&le ontainers, and any num&er of items that re*uire repair, reuse, re y ling, or se ondary use in another produ t .Instead of managing one+s inventory to maximi,e profit and minimi,e ost for the individual firm, today+s firm has to ma#e inventory de isions that &enefit the entire supply hain. -pare parts are a term used to indi ate extra parts availa&le and in proximity to the me hani al item, for "hi h they might &e used. Every a tivity affe ts and is influen ed &y numerous fa tors either dire tly or indire tly in varying degrees. .lanning is /ust a means to ma#e "or#ing easier, &y eliminating those fa tors "hi h have a lesser influen e and there&y paving a path having fe"er related fa tors to ontrol and on entrate upon. 0ut in the ase of spare parts management, even fa tors having dire t influen e are not stati and hange from time to time depending upon the operating and environmental onditions -pare parts refer to those parts "hi h are identi al "ith some parts in the ma hine &ut in general their life is less than the operating life of the ma hine itself and often re*uires repla ement at a shorter noti e. 'ost of them in lude items su h as &earings, gears, filters, axles, rotors, 1%&elts et , the hief hara teristi of "hi h is that they are meant for spe iali,ed use in one or limited num&er of e*uipment. !hey are further lassified &y
A study on Spare parts Management at HLL longer pro urement lead time, lo"er usage rate, un ertain demand, and also there are diffi ulties in predi ting their &ehavior and at times in identifying them. In spite of the hallenging nature of the maintenan e management pro&lem, the servi e fun tion of the maintenan e "hi h is also the servi e fun tion to maintenan e management have not attra ted suffi ient attention of top management. -upply of spare parts is not onsidered a pro&lem to elite management and is generally delegated to people at the lo"er levels in the management hierar hy. !his attitude has led many industries to possess a high level of spare parts inventories "hi h is of slo" and non moving nature "hi h is affe ting the effi ien y of the spare parts management and there&y inventory management. !he important fa tors that influen e spare parts planning are2 Lo ation%If the fa tory is lo ated in &a #"ard area or far from industrial enters, national high"ays, rail"ay lines, then it is in less favora&le position and is &ound to arry more sto # to a ount for transport delays. Government regulation for imports availa&le of foreign urren y, import li ense, ustom regulations, redit ontrol et -ophisti ated industry and degree of automation%!he more automated or sophisti ated an industry the servi e the sto # "ill &e more. If the produ tion an &e temporarily transferred to another ma hine if &rea# do"n o urs, then it is not so riti al resulting in less sto #. Lead time2 It is o&vious that longer the lead time more "ill &e inventory. !he lead time in most organi,ation &oth pu&li and private se tors do not estimate on s ientifi "ay. !he total lead time for spare parts found to very from 3 to 4 months for the indigenous parts and from 56 to 73 months for imported items. -ervi e level onsiderations and e onomi onsiderations. 0ut "ithout the spare part on
!he user of the me hani al item, "hi h might re*uire the parts, may overloo# the e onomi hand, a ompany+s ustomer satisfa tion levels ould drop if a ustomer has to "ait too long for their item to &e fixed. !herefore ompany+s need to plan and align their servi e parts inventory and "or#for e resour es to a hieve optimal ustomer satisfa tion levels "ith minimal osts. 3 TKM Institute of Management
A study on Spare parts Management at HLL 1.1 INDUSTRY PROFILE HLL at $##ulam is the Health are division.
Health as one of the Fundamental Human
Right, has been accepted in the Indian Constitution. Although Article 21 of the Constitution requires the State to ensure the health and nutritional importance of healthcare industr$, it has been conferred section 1% &2'!( of the Income )a* Act, ell being of all people, the Federal ith the Infrastructure status under !o"ernment has a substantial technical and financial role in the sector. #ue to gro ing
!he Indian health are se tor onstitutes2
'edi al are providers2 physi ians, spe ialist lini s, nursing homes and hospitals and 8iagnosti servi e enters and pathology la&oratories, 'edi al e*uipment manufa turers, 9ontra t resear h organi,ations (9()+s), pharma euti al manufa turers, !hird party support servi e providers ( atering, laundry)
0efore independen e the health are se tor "as in dismal ondition "ith high mor&idity and mortality rates and prevalen e of infe tious diseases. -in e independen e emphasis has &een put on .rimary Health 9are and India has "or#ed ontinuously to improve its health are system in the last several de ades. 9onsidera&le progress has &een made in expanding the pu&li system and redu ing the &urden of disease. 0ut the government funded fa ilities "ere not enough to meet to the gro"ing demand of population, "hether it "as primary, se ondary or tertiary are, "hi h ne essitated the need for alternate sour e of funding in the health are se tor. .ost Li&erali,ation, in the :;4<+s the entry norms for .rivate players in the Health servi es industry "as relaxed &y the Government. !he private health are fa ilities are o"ned and run &y for%profit ompanies, non%profit or harita&le organi,ations. !he entry of private se tor has opened a gamut of opportunities for India in terms of 'edi al E*uipment, Information te hnology in health servi es, 0.), !elemedi ine and 'edi al and Health !ourism. $n estimated :<<,<<< ='edi al !ourists= visited India last year, representing a 5< per ent /ump over the previous year. 4 TKM Institute of Management
A study on Spare parts Management at HLL !oday the health are industry has emerged as one of the most hallenging se tors as "ell as one of the largest servi e se tor industries in India "ith estimated revenue of a&out > 7< &illion (F? 5<<@) onstituting @A of the G8.. !he Indian Health -ervi es se tor is estimated to &e around (s. B@< &illion "ith hospitals a ounting for more than half of this. !he se tor has had a gro"th of over :5A p.a. in the past four years and is estimated to gro" &y :B<A &y 5<:5. !hough the private se tor has &een responsi&le in &ringing a&out the desired hanges in the health industry, the health se tor performan e re*uires mu h improvement in omparison "ith other emerging e onomies, in luding most ompara&le nations in the region. 8efi ien ies persist "ith respe t to a ess, afforda&ility, effi ien y, *uality and effe tiveness, despite the high level of overall private and pu&li expenditure on health.
Gro"th of health are in India

India+s health are se tor has &een gro"ing rapidly and estimated to &e "orth C-> 6< &illion &y 5<:5, a ording to .ri e "ater house 9oopers in its report, +Health are in India2 Emerging mar#et report 5<<B+. (evenues from the health are se tor a ount for @.5 per ent of the G8., ma#ing it the third largest gro"th segment in India. !he se tor+s gro"th "ill &e driven &y the ountry+s gro"ing middle lass, "hi h an afford *uality health are. )ver :@< million Indians have annual in omes of more than C-> :,<<<, and many "ho "or# in the &usiness servi es se tor earn as mu h as C-> 5<,<<< a year. !oday at least @< million Indians an afford to &uy Western medi ines%a mar#et only 5< per ent smaller than that of the CD. !he gro"ing pur hasing po"er of Indian patients is revealed in the in reased &usiness of air am&ulan e servi es. $round 73@ airliftings "orth several millions of rupees happen in 8elhi in a year on average. If the e onomy ontinues to gro" faster than the e onomies of the developed "orld, and the litera y rate #eeps rising, mu h of "estern and southern India "ill &e middle lass &y 5<5<.
A study on Spare parts Management at HLL !o meet this demand, the ountry needs C-> @< &illion annually for the next 5< years, says a 9II study. India needs to add 5 million &eds to the existing :.: million &y 5<5B, and re*uires immediate investments of C-> 45 &illion. Funds in the se tor have &een largely private. In fa t, it is &elieved that the private se tor provides 3< per ent of all outpatient are in India and as mu h as 6< per ent of all in% patient are. It is estimated that nearly B< per ent of all hospitals and 6< per ent of hospital &eds in the ountry are in the private se tor, says .W9. 1.2 COMPANY PROFILE Hindustan LatexEs (HLL) /ourney started "ith its in orporation as a orporate entity under the 'inistry of Health and Family Welfare of the Government of India on March 1, 1966. HLL "as set up in the natural ru&&er ri h state of Derala, for the produ tion of male ontra eptive sheaths for the Fational Family .lanning .rogramme.
!he ompany ommen ed its ommer ial operations on $pril @, :;3; at .eroor#ada in !rivandrum. !he .lant "as esta&lished in te hni al olla&oration "ith )#amoto Industries In . Gapan.!"o most modern .lants "ere added, one at Thiru a!a!"ha#ura$ and the other at %&'(au$ in :;4@. With a vast array of innovative produ ts and so ial programmes laun hed, Hindustan Latex Ltd. (HLL) is year after year ta#ing a step loser to its vision of HInnovating for Healthy GenerationsI. HLL is today a multi%produ t, multi%unit organi,ation addressing various pu&li health hallenges fa ing humanity. Hindustan Latex is the only ompany in the "orld manufa turing and mar#eting the )i*&+" ra!(& ,- C,!"rac&#"i &+. It is uni*ue in providing a range of 9ondoms, in luding Female 9ondoms, Intra Cterine 8evi es, )ral 9ontra eptive .ills % steroidal, non%steroidal and Emergen y 9ontra eptive pillsJ 9ontra eptive 9ream, and !u&al (ings. HLLEs H&a'"h car& #r,*uc" ra!(& in lude2 0lood 9olle tion 0ags, -urgi al -utures, $uto 8isa&le -yringes, 1a ines, WomenEs Health 9are .harma produ ts, In % 1itro 8iagnosti !est Dits, Hydro ephalus -hunt, !issue Expanders, Feedle 8estroyers, 0lood 6 TKM Institute of Management
A study on Spare parts Management at HLL 0an# e*uipment, Iron and Foli $ id !a&lets, -anitary Fap#ins, and )ral (ehydration -alts. )ver the past sixteen years HLL has steadily set up a strong and sound infrastru ture for dire t mar#eting. HLL has put in pla e a vast distri&ution net"or# overing the length and &readth of the ountry. HLLEs produ ts today rea h over five la#h retail outlets, in luding over a la#h villages, in the remotest orners of the nation. HLLEs produ ts are today exported to over B< ountries. HLLEs asso iation "ith "orld leaders in lude those "ith )#amoto of GapanJ Finishing Enterprises, C-$J 0e ton and 8i #inson, C-$J Female Health 9ompany, C-$J Gam&ro 09!, -"eden and 0ei/ing Ki,hu .harma of 9hina. HLL has three state of the art manufa turing fa ilities "ith I-) ;<<:, I-) :6<<:% *uality and environmental management system ertifi ations. HLLEs .eroor#ada .lant "as also a"arded the )H-$- :4<<: 9ertifi ation for its effi ient ) upational Health and -afety 'anagement -ystem. .rodu ts manufa tured at its .lants also have the L9EE mar#ing. HLL is investing heavily in the area of (esear h and 8evelopment. It is setting up a national entre for (esear h in the area of 9ontra eptive produ ts !he 9ompany has a hieved a turnover of (s. 566 rores during the last finan ial year % 5<<3%<B and a profit after tax of (s. 5<.<3 rores. HLL . A /,r'* )i*& #r, i*&r ,- C,!"rac&#"i &+ a!* H&a'"h Car& Pr,*uc"+ HLL is today the leading provider of ontra eptive and health are produ ts for various pu&li health programmes managed &y international agen ies li#e M CFF.$, 'ission .harma, .-I and I8$. HLL is partnering "ith the Government of India in the Fational (ural Health 'ission, (eprodu tive and 9hild Health .ro/e t and the Fational $I89ontrol .rogramme. E$#',0&& I!i"ia"i &+
A study on Spare parts Management at HLL !he industrial relations s enario in all the 9ompanyEs Cnits has &een ex ellent and no man%days "ere lost on a ount of any industrial disputes. !raining and 8evelopment to enhan e s#ill, #no"ledge and ompeten y levels are an ongoing pro ess in the ompany. C,r#,ra"& 1i+i,! 2 P'a!+ ah&a* HLL has dra"n up a omprehensive plan to expand its portfolio in the area of Health 9are and 9ontra eptives % its ore areas, to a hieve rapid gro"th. !he o&/e tive is to a hieve through this pro ess a turnover of (s.:<<< rores &y 5<:<. With nearly :;<< highly s#illed and learned manpo"er, and several "orld leaders as partners, HLL has over the past four de ades stood to uphold its mission to a hieve and sustain a high gro"th path, and fo us on five #ey thrust areas to a hieve its vision. !hese are % ustomers, employees, &usiness, innovation and so ial initiatives. In the future, through te hni al olla&orations, mar#eting allian es and /oint ventures, HLL "ishes to #eep alive the dream of all humanity % of a healthier, happier "orld.
'otto, 1ision and 'ission

'otto Innovating for Healthy Generations. 1ision HLL "ill esta&lish itself as the Leader in its ore a tivities, through a pro ess of ontinuous innovation and parti ipatory approa h in order to % .rovide &est value to the ustomer. 0e an employer of hoi e. .romote the ause of family health in general, and "omen+s health in parti ular
'ission !o a omplish the 9orporate 1ision, HLL has outlined a 'ission to &e a World 9lass Health 9are 9ompany &y the year 5<:<, "ith fo us on five #ey areas, namely N 0usiness N 9ustomer N Innovation N Employee N -o ial -e tor initiatives.
A study on Spare parts Management at HLL 0usiness Leadership2% $ttain rapid gro"th and glo&al levels of operations "ith ost ompetitiveness. 0e among the top three players in ea h main produ t ategory. 0e ome the organi,ation to &e &en hmar#ed "ith. 0e ome an a #no"ledged and admired leader at industry forums. 9ustomer Fo us2% Fo us on *uality and ustomer delight at all time Innovation2% Esta&lish ore ompeten e through a pro ess of learning and innovation. 9reate a ulture of ontinuous innovation resulting in at least :<A of turnover from (esear h and 8evelopment initiative. Employee -atisfa tion2% -trive to &e the employer of hoi e in India "ith employee satisfa tion levels of over ;<A. -o ial -e tor Initiatives2% 0e re ogni,ed as the leading so ial organi,ation in the field of (eprodu tive and Women+s Health, "ith a ommitment to the so iety % a partner of hoi e for implementing all government and multi%lateral initiatives in these segments
)rigin and History

!o tra e &riefly, HLLEs landmar#s in the 6<th year sin e its formation2 :;33 % In orporated as a ompany under the 'inistry of Health and Family Welfare of the Government )f India on :st 'ar h, :;33. :;3; % 9ommen es on $pril @, ommer ial produ tion of 9ondoms at its plant at !hiruvananthapuram. .rodu tion apa ity M :66 million pie es a year. :;B3 % .rodu tion apa ity dou&led "ith the addition of t"o more lines in the moulding se tion. .rodu tion apa ity dou&les to 544 million pie es. :;4@ % !he addition of the plants at 0elgaum and !hiruvananthapuram "ith the latest state%of%art Gapanese !e hnology, raises HLLEs total 9ondom produ tion apa ity to 4<< million pie es a year. ! TKM Institute of Management
A study on Spare parts Management at HLL :;;: % HLL re ogni,ed as a ')C signing organi,ation &y the Government of India. HLL granted the @:<(#) 9ertifi ation &y Food and 8rug $dministration (F8$) of the C-, needed for export of its 9ondoms to the C-$. :;;5 % 8iversifies into manufa ture of -urgi al O Examination Gloves. 9ommen es formulation and ta&letting of -aheli on e%a%"ee# pill at 0elgaum. :;;7 % .lant for formulation and ta&letting of 'ala%8 )ral pills, ommissioned at 0elgaum. :;;6 % 9ommen es produ tion of 9opper%! Intra%Cterine devi e at its $a##ulam plant. 9ommen es ommer ial produ tion of 9eredrain Hydro ephalus -hunts. :;;6%:;;@ % Introdu es -urgi al, -yntheti and 9atgut -utures. :;;@%:;;3 % Introdu es HL%Haemopa # 0lood !ransfusion 0ags. HLL a"arded the FF mar# &y the La&oratoire Fational 8Eessais, Fran e, "hi h is the ertifi ation re*uired for export of its 9ondoms to the European Fations. :;;3 % HLL granted I-) ;<<5 % for its effi ient Puality 'anagement -ystems % for its .eroor#ada plant manufa turing 9ondoms, and $a##ulam plant manufa turing 0lood 0ags, 9opper%! and Hydro ephalus -hunt. :;;B % HLL, the only 9ompany from India sele ted &y WH) for o&taining their re*uirements of 9ondoms%for rea hing ountries "orld"ide. :;;4 % HLL .eroor#ada plant granted the prestigious 9E mar#% the prime re*uisite for export of 9ondoms to the European E onomi 9ommunity (from Gune :;;4) % &y G'E8, Fran e, the offi ial Fren h 9ertifi ation $gen y. HLLEs $##ulam plant also re eives the 9E mar# from -G- ?arsley International 9ertifi ation -ervi es, CD for its 0lood 0ags. Hindustan Latex Family .lanning .romotion !rust (HLF..!) ommen es several so ial mar#eting pro/e ts and servi es all over the ountry. :;;;%5<<< % (e eives ')C a"ard and 9ertifi ate of merit from the 1i e .resident of India, for ex ellen e in the a hievement of ')C targets. HLLEs $##ulam plant re eives I-) :6<<: ertifi ation.
1"
A study on Spare parts Management at HLL 5<<5 % HLLEs .eroor#ada plant and 0elgaum plant a"arded the I-) :6<<: ertifi ations. 5<<7 % HLL re eived on $pril @, 5<<7, the ')C a"ard of the Government of India, from His Ex ellen y the .resident of India 8r. $. .. G. $&dul Dalam/i, for ex ellen e in the a hievement of ')C targets for 5<<:%5<<5. $ hieves highest turnover of (s. :@< 9rores. (e ords highest profits (.08I!) of (s. 5<.7< 9rores. HLL ommen es trial produ tion of -urgi al -utures and !issue Expanders at its plant at $##ulam in !hiruvananthapuram. 8uring 5<<5%5<<7 % HLL exported (s.:7 9rores "orth of its 9ondoms, 0lood 0ags, Hydro ephalus -hunts, and Latex Gloves to over 3< ountries around the "orld. 5<<6% Laun hed 'oods ondoms in the 'iddle East on Ganuary 55.HLLEs Female 9ondom laun hed on Fe&ruary :7, 5<<6, &y the -e retary, 8ept. of Family Welfare -ri ..D. Hota, I$- at Fe" 8elhi. (e ords the highest turnover yet of (s. :35.@6 rores and profits (after tax) of (s.:4.4: rores. 5<<@%HLLEs .eroor#ada .lant at !hiruvananthapuram a"arded the Golden .ea o # Fational Puality $"ard &y the Institute of 8ire tors, on the o asion of the :@th World 9ongress on !otal Puality organi,ed at 'um&ai on Ganuary :6, 5<<@. 5<<3 % -ri .. D. Hota I$-, Cnion -e retary for Health O Family Welfare, laun hes the WomenEs Health 9are .harma 8ivision .rodu ts at a spe ial fun tion at !rivandrum on :7th Ganuary, 5<<3. HLL re eives the Fational $"ard for Ex ellen e in 9ost 'anagement. Instituted &y I9W$I at a spe ial fun tion at Fe" 8elhi on5@th Ganuary, 5<<3. HLL ties up "ith -C..L?9) in Derala for the distri&ution of its produ ts through their outlets all over the state. -ri 9. 8iva#aran, 'inister for Food and 9ivil -upplies, Government of Derala re eived the first pa # of HLL produ ts, from HLLEs 9O'8 -ri '. $yyappan on ;th Fovem&er, 5<<3.
.rodu tion Fa ility

11 TKM Institute of Management
A study on Spare parts Management at HLL HLL started ommer ial produ tion of ondoms in :;3; at its manufa turing plant at .eroor#ada, !hiruvananthapuram, Derala state, south India, "ith the assistan e using Gapanese te hnology. )ver the years HLL has gro"n rapidly and diversified into the manufa turing of other health are produ ts and had &uilt up t"o more plants. )ne at $##ulam, !hiruvananthapuram, Derala state, south India for the manufa ture of 0lood 0ags, 9opper !, Hydro ephalus -hunts, -urgi al sutures, !issue expanders and the other at Danagala, 0elgaum, Darnata#a -tate, south India, for the manufa ture of ondoms and ontra eptive pills. $ll these plants use modern state of the art produ tion fa ilities.
$##ulam plant
HLL+s modern state of the art fa ility for the manufa ture of medi al devi es 9opper % !, 0lood 0ags, Hydro ephalus -hunts, -urgi al -utures !issue Expander and !u&ular (ings. !he manufa turing fa ility is entrally air % onditioned and has lass :<<<< and lass :<< lean areas. !he fa ility is ertified for onforman e to I-) ;<<:, WH) G'. and I-) :6<<:. !he annual installed apa ity of this unit is @ million pie es for 0lood 0ags, @.@ million pie es for 9opper ! :<,<<< pie es for -hunts, 5<<< pie es of !issue Expander, :.@ million pie es of surgi al sutures and @ million pie es of !u&ular (ing .!he strength of this state of the art manufa turing fa ility lies in its ommitment to !otal Puality 'anagement. Puality -ystems 0uilding a ompany "ith a "orld lass *uality $t Hindustan Latex Limited, delivering value to our ustomers is our primary o&/e tive. )ur ustomers ount on us to deliver *uality produ ts on time, every time. We &elieve that &y utili,ing our *uality pro esses, "e "ill provide added value to the produ t, "hi h our ustomers re*uire and deserve. We a hieve this goal &y fo using on our Puality .oli y and unending ommitment to our ustomers.
Puality .oli y
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A study on Spare parts Management at HLL Hindustan Latex Limited is ommitted to2 .rovide produ ts and servi es, healthy generations. $ hieve a high standard of personal, orporate and &usiness ex ellen e through ontinual improvement, human resour e development and team"or#. 'ar#et the produ ts and servi es of the ompany glo&ally on the strength of innovation, *uality, ost and delivery. 'eet all statutory O regulatory re*uirements and &e an organi,ation "ith Good 9orporate Governan e and 9orporate -o ial (esponsi&ility. -afety, Health and Environment (-HE) poli y Hindustan Latex Limited is ommitted to2 .rote t environment, prevent pollution and eliminate o upational health and safety ris#s through ontinuous monitoring and ontrol of the impa t of its a tivities, produ ts or servi es on a ontinual &asis. 9omply "ith all legal and other re*uirements, "ith respe t to the organi,ation+s a tivities. En ourage on ern and respe t for the environment, health and safety of onforming to international standards in the
health are area to the omplete satisfa tion of all ustomers and for &uilding
employees and su& ontra tors and adopt appropriate operating pra ti es and training for the same. -et measura&le o&/e tives for ontinual improvement. 9onserve ra" materials, energy O redu e "aste at sour e. Extend all support to agen ies for reating a"areness regarding good
environment, health and safety poli y to the pu&li .
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A study on Spare parts Management at HLL 1.3 PRODUCT PROFILE Health 9are .rodu t 8ivision M$DDCL$' .L$F! !he Health 9are 0usiness Cnit of HLL is responsi&le for the mar#eting of health are produ ts. .rodu ts handled &y H90C are targeted at 0lood 0an#s, 9orporate O .rivate Hospitals, Government Hospitals et . HLL has a dedi ated team of sales personnel for overing the &lood &an#s in India. H90C also olla&orates "ith various voluntary &odies for organi,ing &lood donation amps. )rgani,ing te hni al sessions for &lood &an#ing professionals is a regular a tivity arried &y H90C for up gradation and sharing of #no"ledge. H90C has a "ide distri&ution net"or# overing all the to"ns in the ountry for rea hing their produ ts to the ustomers in an effe tive and effi ient manner. !he ma/or produ ts under this division are 0lood &ags, Hydro ephalus shunts, -urgi al -utures, Gloves and Feedle destroyers.
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CHAPTER-2
LITERATURE RE1IE/
IN1ENTORY MANA4EMENT Inventory is the sto # of any item or resour e used in an organi,ation. $n inventory -ystem is a set of poli ies and ontrols that monitors levels of inventory and determine "hat levels should &e maintained, "hen sto # should &e replenished, and ho" large orders should &e.
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A study on Spare parts Management at HLL 'anufa turing Inventory refers to items that ontri&ute to or to &e ome part of a firmEs produ t output. 'anufa turing Inventory is typi ally lassified into ra" materials, finished produ ts, omponent parts, supplies and "or#%in%pro ess. !he &asi purpose in inventory analysis in manufa turing and sto # #eeping servi es is to2 (:) When items should &e ordered and (5) Ho" large the order should &e 'any firms are tending to enter into longer%term relationships "ith vendors to supply their needs for a year and this hanges the H"henI and Hho" many orderI to H"henI and Hho" many to deliverI. What is InventoryQ Inventory is a *uantity or store of goods that is held for some purpose or use (the term may also &e used as a ver&, meaning to ta#e inventory or to ount all goods held in inventory). Inventory may &e #ept =in%house,= meaning on the premises or near&y for immediate useJ or it may &e held in a distant "arehouse or distri&ution enter for future use. With the ex eption of firms utili,ing /ust%in%time methods, more often than not, the term =inventory= implies a stored *uantity of goods that ex eeds "hat is needed for the firm to fun tion at the urrent time (e.g., "ithin the next fe" hours). Why #eep InventoryQ !he follo"ing is a list of reasons for maintaining "hat "ould appear to &e =ex ess= inventory.
Ganuary 8emand @< .rodu e :<< 'onth%end inventory @<

Meet Demand.
Fe&ruary @< :<< :<<
'ar h $pril < :<< :<< :<< 5<< 5<<
'ay 5<< :<< :<<
Gune 5<< :<< <
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A study on Spare parts Management at HLL In order for a manufa turer to stay in &usiness, it must have the produ ts that the ustomer "ants on hand "hen the ustomer "ants them. $nd more over the ra" materials and other items re*uired for the produ tion must &e availa&le in the inventory for meeting the dependent and independent demand. Hen e, in many instan es, if a good is not in inventory, a sale is lost forever.
Keep operations running.
$ manufa turer must have ertain pur hased items (ra" materials, omponents, or su&assem&lies) in order to manufa ture its produ t. (unning out of only one item an prevent a manufa turer from ompleting the produ tion of its finished goods. Inventory &et"een su essive dependent operations also serves to de ouple the dependen y of the operations. $ ma hine or "or# enter is often dependent upon the previous operation to provide it "ith parts to "or# on. If "or# eases at a "or# enter, then all su&se*uent enters "ill shut do"n for la # of "or#. If a supply of "or#%in%pro ess inventory is #ept &et"een ea h "or# enter, then ea h ma hine an maintain its operations for a limited time, hopefully until operations resume the original enter.
Lead time.
Lead time is the time that elapses &et"een the pla ing of an order (either a pur hase order or a produ tion order issued to the shop or the fa tory floor) and a tually re eiving the goods ordered. If a supplier (an external firm or an internal department or plant) annot supply the re*uired goods on demand, then the lient firm must #eep an inventory of the needed goods. !he longer the lead time, the larger the *uantity of goods the firm must arry in inventory.
Hedge.
Inventory an also &e used as a hedge against pri e in reases and inflation. -alesmen routinely all pur hasing agents shortly &efore a pri e in rease goes into effe t. !his gives the &uyer a han e to pur hase material, in ex ess of urrent need, at a pri e that is lo"er than it "ould &e if the &uyer "aited until after the pri e in rease o urs.
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Quantity discount.
)ften firms are given a pri e dis ount "hen pur hasing large *uantities of a good. !his also fre*uently results in inventory in ex ess of "hat is urrently needed to meet demand. Ho"ever, if the dis ount is suffi ient to offset the extra holding ost in urred as a result of the ex ess inventory, the de ision to &uy the large *uantity is /ustified.
Smoothing requirements.
-ometimes inventory is used to smooth demand re*uirements in a mar#et "here demand is some"hat errati . 9onsider the demand fore ast and produ tion s hedule outlined in !a&le :. !he use of inventory has allo"ed the firm to maintain a steady rate of output (thus avoiding the ost of hiring and training ne" personnel), "hile &uilding up inventory in anti ipation of an in rease in demand. In fa t, this is often re*uirements to earlier periods, thus smoothing the demand. (ole of Inventory in the -upply 9hain Inventory exists in the supply hain &e ause of a mismat h &et"een supply and demand. $n important role that inventory plays in the supply hain is to in rease the amount of demand that an &e satisfied &y having the produ t ready and availa&le "hen the ustomer "ants it. $nother role that inventory plays is to redu e ost &y exploiting e onomies of s ale that may exist during produ tion and distri&ution. Inventory also has a signifi ant impa t on the material flo" time in a supply hain. 'aterial flo" time is the time that elapses &et"een the points at "hi h material enters the supply hain to the point at "hi h it exits. IN1ENTORY MANA4EMENT !he prime o&/e tive for all supply hains is to provide lients "ith "hat they "ant, "hen they "ant it. Inventory management plays a entral role in every supply hainEs need to satisfy its lients.

alled anti ipation
inventory. In essen e, the use of inventory has allo"ed the firm to move demand
$ssess inventory management pra ti es Improve fore asting a ura y TKM Institute of Management

9reate more logi al sto #ing (and non%sto #R) poli ies 'anage y le sto # to redu e osts Esta&lish dynami safety sto # levels &ased on lient servi e 9ross%do #, y le ount, transfer, and dis ontinue -DCs effe tively (edu e pur hase transa tion and manufa turing set%upS hangeover osts 9ontinuously improve inventory performan e
SPARE PARTS MANA4EMENT -pare parts, also referred to as -ervi e .arts is a term used to indi ate extra parts availa&le and in proximity to the me hani al item, su h as a automo&ile, &oat, engine, for "hi h they might &e used. -pare parts are also alled Hspares.I -ervi e .arts 'anagement is the main omponent of a omplete strategi servi e
management pro ess that ompanies use to ensure that right spare part and resour es are at the right pla e ("here the &ro#en part is) at the right time. Ec,!,$ic C,!+i*&ra"i,!+ -pare parts are sometimes onsidered une onomi al sin e2 T the parts might never &e used T the parts might not &e stored properly T the ost of inventory for spare parts on hand T the a&ility to o&tain the parts "hen needed from a remote sour e, su h as a vendor, supplier, parts department, et . 0ut "ithout the spare part on hand, a ompany+s ustomer satisfa tion levels ould drop if a ustomer has to "ait too long for their item to &e fixed. !herefore ompany+s need to plan and align their servi e parts inventory and "or#for e resour es to a hieve optimal ustomer satisfa tion levels "ith minimal osts.
1!
A study on Spare parts Management at HLL U+&r C,!+i*&ra"i,!+ !he user of the me hani al item, "hi h might re*uire the parts, may overloo# the e onomi onsiderations &e ause2
T the expense is not the users, &ut the employerEs T of a #no"n high rate of failure of ertain e*uipment T of delays in getting the part from a vendor or a supply room, resulting in ma hine outage T to have the parts on hand re*uires less Hpaper"or#I "hen the parts are suddenly needed T of the mental omfort it provides to the user in #no"ing the parts are on%hand "hen needed C,+"-E--&c" C,$#r,$i+& In many ases "here the me hani al item is not stationary, a ompromise is rea hed &et"een ost and statisti al pro&a&ility. -ome examples2 T a mem&er of a household &uys extra light &ul&s sin e it is pro&a&le that one of the lights in the house "ill eventually &urn out and re*uire repla ement. T a omputer user "ill pur hase a ream of omputer paper instead of a sheet at a time. T a ra e ar team "ill &ring "ith them to the ra e tra # another engine, H/ust in ase.I T a ship arries Hspare partsI for its engine in ase of &rea#do"n at sea. S#ar& Par"+ Ma!a(&$&!" I!*ica",r+ !here is a saying2 HWhat you anEt measure, you anEt improveI. !he saying is not ne essarily al"ays true, &ut it is interesting, &e ause a derivative of the saying is true2 HWhat you measure, is usually "hat you getI. (edu ing Inventory 1alue 2" TKM Institute of Management
A study on Spare parts Management at HLL It is ommon for plants to have a lot of fo us on redu ing inventory value. Inventory value is one of those num&ers that a ts li#e salt in a "ound for orporate a ountants. It doesnEt matter if itEs high or lo", it al"ays hurt to loo# at the num&er. 9ost of Deeping -pare .arts and 'aterials !he ost for #eeping inventory is usually an estimated num&er, often alled Hinventory interestI (or similar), that varies from :<%6<A depending on ompany a ounting rules. !he ost in luded storeroom, storeroom personnel, depre iation, et . If you have a spare parts and materials inventory value of :< 'illion, it osts the ompany :%6 'illions (:<% 6<A) a year to #eep that spare parts and materials inventory. !he .ro&lem -in e it is ommon that inventory value is the only num&er the plant really ares a&out, it tends to get redu ed. 0ut, anyone an redu e inventory value very easily, IF itEs the only thing that matters. I an tell you to s rap all spare parts right no" &ringing your spare parts and materials inventory to ,ero. 0ut the onse*uen es "ill &e devastating to produ tion sin e "e donEt have any spare parts. 'easure a H9ounter"eightI -pare parts inventory value is important, &ut to effe tively redu e spare parts inventory value, the H ounter"eightI has to &e measured as "ell. !he ounter"eight to inventory value an &e Hsto #%outsI for example (times "e get the spare part needed divided &y total re*uest for spare parts). When sto # outs go over around 6%@A, you "ill start seeing signs of people not trusting the store room. !hese signs are spare parts in supervisorEs offi e, satellite stores, spare parts in rafts peopleEs tool&oxes et . IN1ENTORY CONTROL -to # ontrol, other"ise #no"n as inventory ontrol, is used to sho" ho" mu h sto # you have at any one time, and ho" you #eep tra # of it. It applies to every item you use to produ e a produ t or servi e, from ra" materials to finished goods. It overs sto # at 21 TKM Institute of Management
A study on Spare parts Management at HLL every stage of the produ tion pro ess, from pur hase and delivery to using and re% ordering the sto #. Effi ient sto # ontrol allo"s you to have the right amount of sto # in the right pla e at the right time. It ensures that apital is not tied up unne essarily, and prote ts produ tion if pro&lems arise "ith the supply hain. !his guide explains different sto # ontrol methods, sho"s you ho" to set one up and tells you "here to find more information S",c5 c,!"r,' $&"h,*+ !here are several methods for ontrolling sto #, all designed to provide an effi ient system for de iding "hat, "hen and ho" mu h to order. 'inimum sto # level % you identify a minimum sto # level, and re%order "hen sto # rea hes that level. !his is #no"n as the (e%order Level. R& ,r*&r L& &'2 !his is the level at "hi h the order has to &e pla ed. !his is the vital sto # level at "hi h the re*uisitions are made out for further supplies. For finding out the ()L, the lead%time and the riti ality of the item is needed. !he formula used is2 ()LU$'9 N L! V D N W $'9NL! Where $'9U $verage monthly onsumption L! U Lead time in months DU 9riti al fa tor of items ( for 1, DU5.772 E, DU:.3@28, DU:.<<) $lso ()L is the sum of 0uffer sto # and -afety -to # 0uffer -to #2 !his is the *uantity of sto #, "hi h is onsumed during the lead%time period. For example, if the average monthly onsumption is L$'9E unitsSmonth and the Lead%!ime is LL!E in months, then 0uffer -to #U $'9NL! units -afety -to #2 In real life situations, t"o fa tors plays important role in the design of a system. !he first fa tor is that demand is never ertain and is distri&uted over a set of pro&a&le values.
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A study on Spare parts Management at HLL -e ondly the lead time is never fixed &ut varies a ertain range of days. $lso it is a fun tion of the servi e level &ased on the riti ality of the spare. !he value of safety sto # an &e al ulated as follo"s2 -afety sto #U DN W$'9 NL! $lso the safety sto # is usually #ept as the minimum sto #. !he reorder point for replenishment of sto # o urs "hen the level of inventory drops do"n to ,ero. In vie" of instantaneous replenishment of sto # the level of inventory /umps to the original level from ,ero level. In real life situations one never en ounters a ,ero lead%time. !here is al"ays a time lag from the date of pla ing an order for material and the date on "hi h materials are re eived. $s a result the reorder level is al"ays at a level higher than ,ero, and if the firm pla es the order "hen the inventory rea hes the reorder point, the ne" goods "ill arrive &efore the firm runs out of goods to sell. !he de ision on ho" mu h sto # to hold is generally referred to as the order point pro&lem, that is, ho" lo" should the inventory &e depleted &efore it is reordered. !he t"o fa tors that determine the appropriate order point are the pro urement or delivery time sto # "hi h is the Inventory needed during the lead time (i.e., the differen e &et"een the order date and the re eipt of the inventory ordered) and the safety sto # "hi h is the minimum level of inventory that is held as a prote tion against shortages. !herefore (eorder .oint U Formal onsumption during lead%time V -afety -to #. -everal fa tors determine ho" mu h delivery time sto # and safety sto # should &e held. In summary, the effi ien y of a replenishment system affe ts ho" mu h delivery time is needed. -in e the delivery time sto # is the expe ted inventory usage &et"een ordering and re eiving inventory, effi ient replenishment of inventory "ould redu e the need for delivery time sto #. $nd the determination of level of safety sto # involves a &asi trade% off &et"een the ris# of sto #%out, resulting in possi&le ustomer dissatisfa tion and lost sales, and the in reased osts asso iated "ith arrying additional inventory.
23
A study on Spare parts Management at HLL $nother method of al ulating reorder level involves the al ulation of usage rate per day, lead time "hi h is the amount of time &et"een pla ing an order and re eiving the goods and the safety sto # level expressed in terms of several days+ sales. (eorder level U $verage daily usage rate x lead%time in days. From the a&ove formula it an &e easily dedu ed that an order for replenishment of materials &e made "hen the level of inventory is /ust ade*uate to meet the needs of produ tion during lead%time. -to # revie" % you have regular revie"s of sto #. $t every revie" you pla e an order to return sto #s to a predetermined level. Gust In !ime (GI!) % this aims to redu e osts &y utting sto # to a minimum % see our guide on ho" to avoid the pro&lems of overtrading. Items are delivered "hen they are needed and used immediately. !here is a ris# of running out of sto #, so you need to &e onfident that your suppliers an deliver on demand. 8o"nload a fa t sheet on GI! produ tion from the 'anufa turing $dvisory -ervi e ('$-) "e&site (.8F).!hese methods an &e used alongside other pro esses to refine the sto # ontrol system. For example2 (e%order lead time % allo"s for the time &et"een pla ing an order and re eiving it. E onomi )rder Puantity (E)P) % a standard formula used to arrive at a &alan e &et"een holding too mu h or too little sto #. It+s *uite a omplex al ulation, so you may find it easier to use sto # ontrol soft"are. ECONOMIC ORDER 6UANTITY It is that *uantity at "hi h the ost of pro uring the annual re*uirement of an item and the inventory arrying ost are e*ual.i.e. "here the total of the t"o osts is the lo"est. !he formulae for finding the E)P of an item is PU (5$.SC9) X (:S5)
24
A study on Spare parts Management at HLL Where $ U $nnual onsumption in units . U .ro urement ost per order (:<<< per order) 9 U Inventory arrying ost (7<A of unit pri e) C U Cnit pri e. T0#&+ ,- +",c5 Everything you use to ma#e your produ ts, provide your servi es and to run your &usiness is part of your sto #. !here are four main types of sto #2 ra" materials and omponents % ready to use in produ tion "or# in progress % sto #s of unfinished goods in produ tion finished goods ready for sale onsuma&les % for example, fuel and stationery H,) $uch +",c5 +h,u'* 0,u 5&&#7 8e iding ho" mu h sto # to #eep depends on the si,e and nature of your &usiness, and the type of sto # involved. If you are short of spa e, you may &e a&le to &uy sto # in &ul# and then pay a fee to your supplier to store it, alling it off as and "hen needed. Deeping little or no sto # and negotiating "ith suppliers to deliver sto # as you need it
$dvantages you need, "hen you need it Lo"er storage osts
8isadvantages an &e ome ompli ated and expensive ?ou might run out of sto # if there+s a
Effi ient and flexi&le % you only have "hat 'eeting sto # needs
hit h in the system ?ou an #eep up to date and develop ne" ?ou are dependent on the effi ien y of produ ts "ithout "asting sto # your suppliers
25
A study on Spare parts Management at HLL !his might suit your &usiness if it+s in a fast%moving environment "here produ ts develop rapidly, the sto # is expensive to &uy and store, the items are perisha&le or replenishing sto # is *ui # and easy. Deeping lots of sto # $dvantages Easy to manage Lo" management osts ?ou never run out 0uying in &ul# may &e heaper 8isadvantages Higher storage and insuran e osts 9ertain goods might perish -to # may &e ome o&solete &efore it is used ?our apital is tied up
!his might suit your &usiness if sales are diffi ult to predi t (and it is hard to pin do"n ho" mu h sto # you need and "hen), you an store plenty of sto # heaply, the omponents or materials you &uy are unli#ely to go through rapid developments or they ta#e a long time to re%order. -to # levels depending on type of sto # !here are four main types of sto #2 (a" materials and omponents $s# yourself some #ey *uestions to help de ide ho" mu h sto # you should #eep2 Ho" relia&le is the supply and are alternative sour es availa&leQ $re the omponents produ ed or delivered in &at hesQ 9an you predi t demandQ Is the pri e steadyQ $re there dis ounts if you &uy in &ul#Q Wor# in progress % sto #s of unfinished goods Deeping sto #s of unfinished goods an &e a useful "ay to prote t produ tion if there are pro&lems do"n the line "ith other supplies. Finished goods ready for sale ?ou might #eep sto #s of finished goods "hen2 demand is ertain goods are produ ed in &at hes you are ompleting a large order 9onsuma&les For example, fuel and stationery. Ho" mu h sto # you #eep "ill depend on fa tors su h as2 26 TKM Institute of Management
A study on Spare parts Management at HLL (elia&ility of supply expe tations of pri e rises ho" steady demand is dis ounts for &uying in &ul#
27
CHAPTER-3
O%8ECTI1E, SCOPE, METHODOLO4Y AND LIMITATIONS
3.1 O%8ECTI1ES !he main o&/e tive is to study the -pare parts 'anagement "ith referen e to follo"ing spe ifi o&/e tives2 . !o lassify the spares using 1E8, $09 and F-F analysis. !o fix the re order level and E onomi )rder Puantity of spares !o find out the money &lo #ed in the non moving spares. !o formulate suggestions for improvement..
A study on Spare parts Management at HLL 3.2 SCOPE !he study is limited to the analysis of ma hine spares in $##ulam plant of Hindustan Latex Limited. 3.3 METHODOLO4Y !he sour es of data olle tion are .rimary 8ata !he .rimary 8ata "as olle ted through dis ussions "ith the managers of -tores 8epartment, I! 8epartment, Finan e 8epartment and Engineering 8epartment . -e ondary 8ata !he se ondary data "as olle ted from the 'anagement Information -ystem, 9ompany We&site, ompany do uments and &oo#s. !ools Csed !he tools used are E)P model, .areto analysis and Fish &one analysis. 3.9 LIMITATIONS !he arrying ost and ordering ost is the average estimation given &y the finan e department.
2!
CHAPTER-9 DATA ANALYSIS
DATA ANALYSIS !he data analysis is done "ith the help of ertain sele tive Inventory ontrol tools. !he te hni*ues used in this study are2 1E8 $nalysis (identifi ation of riti ality of spares) $09 $nalysis ( lassifi ation of spares &ased on onsumption value) F-F $nalysis (Identifi ation of Fast, -lo" and Fon moving spares.
3"
A study on Spare parts Management at HLL 9al ulation of (e order level and E)P of spares 9omputation of money &lo #ed in the Fon moving spares. Fish&one diagram for the generating options for improvement..
1ED A!a'0+i+
1E8 $nalysis means 1ital, Essential and 8esira&le $nalysis. It is the $nalysis for monitoring and ontrol of stores and spares inventory &y lassifying them into 7 ategories vi,., 1ital, Essential and 8esira&le. !he me hani s of 1E8 analysis are similar to those of $09 $nalysis. !he 1E8 analysis is done to determine the riti ality of an item and its effe t on produ tion and other servi es. It is spe ially used for lassifi ation of spare parts. If a part is vital it is given L1E lassifi ation, if it is essential, then it is given LEE lassifi ation and if it is not so essential, the part is given L8E lassifi ation. For L1E items, a large sto # of inventory is generally maintained, "hile for L8E items, minimum sto # is enough. 1E8 9lassifi ation 1U 1italJ EU EssentialJ 8U 8esira&le. T T If a part is vital it is given L1E lassifi ation, if it is essential, then it is given LEE lassifi ation and if it is not so essential, the part is given L8E lassifi ation. For L1E items, a higher sto # of inventory is generally maintained, "hile for L8E items, minimum sto # is enough. !he 1E8 analysis is arried out "ith the help of Engineering department &y identifying the riti al spares. !he spares of :< ma hines "as identified as riti al and therefore as 1ital and the others are in luded in the ategory of &oth Essential and 8esira&le
TA%LE 1-1ED A!a'0+i+

SL NO ITEM ODE ITEM DES !I"TION STO K #ED $N$L%SIS
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& 2 ( , * 8 ' = > &) && &2 &( &, &* &8 &' &= &> 2) 2& 22 2( 2, 2* 28 2' 2= 2> () (& (2 (( (, (* (8 (' (= (> ,) ,& ,2 ,( ,, ,* ,8 ,' ,= ,> *) '())*))))) '())*)))&) '())*)))2) '())*)))() '())*))),) '())*)))*) '())*)))8) '())*)))') '())')*),) '())')*)*) '())')*)8) '())')*)') '())')*)=) '())')8))) '())')8)&) '())')8)2) '())')8)() '())')8),) '())')8)*) '())')8)8) '())')8)') '())')8)=) '())')8)>) '())')8&)) '())')8&&) '())')8&2) '())')8&() '())')8&,) '())')8&*) '())')'))) '())')')&) '())')')2) '())')')() '())')'),) '())')=))) '())')=)&) '())')=)2) '())')=)() '())')=),) '())')=)*) '())')=)8) '())')=)') '())')=)=) '())')=)>) '())')>))) '())')>)&) '())'&)))) '())'&))&) '())'&))2) '())'&))() TO HO +ENE!$TO! D MODEL T+ ',*' D -T./E E0T!.DE!1 DIE. M3 "!O .!ED 4!OM D+" 5INDSO!6#$T#$6$HMD7 T./E E0T!.DE! S !E5 4O! T./E E0T!.DE! MODEL S0 () /$!!EL 4O! T./E E0T!.DE! M3 "OTENTIOMETE! &) T.!N &)K6*5 "OTENTIOMETE! D$IL9E IL M$KE &) T.!N: $!D7 $SSEM/LED SN.//E! $!D; ()H"3("H < $/O#E $!D7 $SSEM/LED T!I++E! $!D 9(7"H D!I#E: I! .IT /!E$KE! S 2'2 K 8 $ - H.4. 5ELDIN+ 1 I! .IT /!E$KE! S 2'2 K , $ - H.4. 5ELDIN+ M$ HINE 1 I! .IT /!E$KE! S 2'2 K 2 $ - H.4. 5ELDIN+ M$ HINE 1 I! .IT /!E$KE! M 7 2* TM 7 , !.*&8* - H.4 5ELDIN+ M$ HINE 1 4or H4 5ELDIN+ M$ HINE "L "O5E! S.""L% $"$ ITO! 9SIEMENS: / =*(2& $ 7 /, - H.4 5ELDIN+ M$ HIE 1 "$ ITO! E!$MI !.,2 "D 7 ') ?&8) "4@ -H.4 5ELDIN+ M$ HINE1 $"$ ITO! !7=* D/ 8,*&(* 9&)) "4: - H.4 5ELDIN+ M$ HINE 1 #$ .M $"$ ITO! *) "4 - H.4 5ELDIN+ M$ HINE 1 #$ .M $"$ ITO! &)) "4 - H.4 5ELDIN+ M$ HINE 1 $"$ ITO! < / &,,,6 ).* 4 A O! 7 2)B M"E - H 4 5ELDIN+ 1 $"$ ITO!7LE$D TH!O.+H $"$ ITO! DDMC7(7))7&*))"4 $"$ ITO! ODE 7 LK D &)) 7 *), 4O! NE5 H4 5ELDIN+ M3 $"$ ITO! 7 4EEDTH!O.+H $"$ ITO! ODE 7 4"2))$5 $"$ ITO! 7 4EED TH!O.+H $"$ ITO! 4O! NE5 H4 5ELDIN+ M3 $"$ ITO! 7 4EED TH!O.+H $"$ ITO! 4O! NE5 H4 5ELDIN+ M3 #$ ..M $"$ ITO! ODE KT 7 &)) 7 ))(* 4O! NE5 H4 5ELD. ME "L$TE $"$ ITO! ODE7"D')7&(K#7&8)"472)B7!,2 4O! NE5 H4 5ELD $"$ ITO! 7 4EED TH!O.+H $"$ ITO! 4O! H4 5ELDIN+ M3 $"$ ITO!7 &)))"4 A37 2)B 4O! /OTTOM DIE +!O.NDIN+ ".!"OSE $"$ ITO! &8))"4 D!$LO!I 4O! H4 5ELDIN+ M$ HINE $!D $.TO T.NIN+ - H.4 5ELDIN+ M$ HINE 1 $!D LIMIT ONT!OL - H.4 5ELDIN+ M$ HINE 1 $!D $! S.""!ESSO! - H.4 5ELDIN+ M$ HINE1 ETHE!NET INTE!4$ E MOD.LE7NE5 H4 5ELDIN+ M3 $!D7$TS $!D "!OTE TION S%STEM 4O! NE5 H4 5ELDIN+ M3 S"$N DE#I E - H.4. 5ELDIN+ M$ HINE 1 TESTIN+ DE#I E 4O! $" 7/O$!DS O4 H.4.5ELDIN+ M3 . TESTIN+ DE#I E 4O! LIMIT ONT!OL7/O$!DS E 7 STO" MOD.LE ODEFKI ".N 0"S $M*&,) H4 5ELDIN+ M3 +.$!DS S$4ET% MOD.LE ODEFK* ".N 0"S $S*&,) 4O! NE5 H4 5ELD+ T5O 7 H$ND ONT!OL DE#I E6 ODE F K=6 ".N 0"S7/ &&&) $N$LO+ OM/O MOD.LE 2,# D ODE ES ".N I 8>( L+ ,,2 !4 "!OTE TION 3 ISOL$TION 4O! H4 5ELDIN+ ST$TION STE""E! MOTO! D!I#IN+ S%STEM SLITTIN+ ".N HIN+ S%STEM 4O! /OTTOM O.T LET /$+ "OSIITI#E 3 NE+$TI#E LO+I 2, # D 6 "OSITI#E LO+I 2, # D 6 ).* $ HE$TIN+ ELEMENT " 2 HC - H.4 5ELDIN+ M$ HINE 1 S5IT H ELEMENT ODE S26 S(6 S,6 S* ".N7*.))&)).&)( S5IT H ELEMENT ODE7S26 S(6 S,6 S* ".N *.))&)).)*( S5IT H ELEMENT ODE7S2)6 S2&6 ".N *.))&)).&)* 2 ) ) ) , 2 & & & 2 2 & & & & & ( & & ( & ) 2 2 2 & = 2 & 2 , ) & ) & ) ) & & & & ) ) ) 2 2 & & & & # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # #
32

*& *2 *( *, ** *8 *' *= *> 8) 8& 82 8( 8, 8* 88 8' 8= 8> ') '& '2 '( ', '* '8 '' '= '> =) =& =2 =( =, =* =8 =' == => >) >& >2 >( >, >* >8 >' >= >> '())'&)),) '())'&))*) '())'&))8) '())'&))') '())'&))=) '())'&))>) '())'&)&)) '())'&)&&) '())'&&))) '())'&&)&) '())'&&)2) '())'&&)() '())'&&),) '())'&&)*) '())'&&)8) '())'&&)') '())'&2))) '())'&2)&) '())'&2)2) '())'&2)() '())'&2),) '())'&2)*) '())'&2)8) '())'&2)') '())'&2)=) '())'&2)>) '())'&2&)) '())'&2&&) '())'&2&2) '())'2)2*) '())'2)28) '())'22)&) '())'2())) '())'2()&) '())'2,))) '())'2,)&) '())'2,)2' '())'2*))) '())'2*)&) '())'2*)2) '())'28))) '())'28)&) '())'28)2) '())'28)() '())'28),) '())'2'))) '())'2')&) '())'2')2) '())'2')() S5IT H ELEMENT6 ODE7S&2 ".N *.))&)).&(, 4O! NE5 H4 5ELD.M3 HE$TIN+ ELEMENT ODE &)))5 4O! NE5 H4 5ELDIN+ M3 $DSO!"TION D!%E! MODEL LD47HS7+I32 2,# D "$!T NO. &'=*2= 4EIN 4ILTE! SICE ; ).)& MI !ON MODEL ; L4M$ &327H7$ 4ILTE! .NITS *NI D $.TO D!$IN * MI !ON "$!T NO ; &8282, 4ILTE! .NITS *MT 7 $.TOD!$IN6 * MI !ON "$!T NO; &8282, 4ILTE! .NITS 5ITH $.TO D!$IN6 ,) MI !ON "$!T NO ; &*>8&= MI !O 4ILTE! I MI !ON MODEL ; L4M/7(3,7D7M$0I7$ .TTIN+ KNI4E ".N E"7)))>7)8, 4O! H4 5ELDIN+ M3 .TTIN+ O#EN ".N E"7)))>7)'( 4O! NE5 H4 5ELDIN+ M3 .TTIN+ "I"E ".N DI$ > G 2(6 =)6 T%"E 2E 4O! NE5 H4 5ELD.M3 .TTIN+ "I"E ".N DI$ ( G 2(6 8)6 T%"E 2E 4O! NE5 H4 5ELD.M3 .TTIN+ "L$TE D!+ NO SS7)*))7))) 4O! NE5 H4 5ELDIN+ M3 /L$DE7O.TE! T!IMMIN+ /L$DE 7 (*) ML /L$DE7O.TE! T!IMMIN+ /L$DE 7 ,*) ML /L$DE7O.TE! T!IMMIN+ /L$DE 7 ()) ML ONT$ T "L$T - H.4 5ELDIN+ M$ HINE 1 "L$TE $"$ ITO! !. =* 7 DS 7 )())') - H.4 5ELDIN+ M$ HINE 1 "L$TE ONT$ T - H 4 5ELDIN+ M$ HINE @ "L$TE STEN IL 4O! H4 5ELDIN+ M$ HINE ONT$ T "L$TE 9 H4 5ELDIN+ M$ HINE.: ONT$ T ST!I" T%"E ONT$ T "L$TE "$!T NO;2)*'( 4O! H4 5ELDIN+ M3 . ONT$ T "L$TE "$!T NO;&*)(' 4O! H4 5ELDIN+ M3 . .TTIN+ "L$TE "$!T NO;SS7)*)&7))( "OS& 4O! H4 5ELDIN+ M3 . ONT$ T "L$TE "$!T NO;2)*') 9(8E &)): 4O! H4 5ELDIN+ M3 . ONT$ T "L$TE 4O! H.4.5ELDIN+ M3 . ONT$ T "L$TE 4O! H.4.5ELDIN+ M3 ONT$ T "L$TE 4O! H.4.5ELDIN+ M3 S5IT H 7 "!O0IMIT% !EED S5IT H ODE 7 C 7 &*+ M22 7 / S5IT H 7 "!O0IMIT% !EED S5IT H 7 ODE 7 H"S 7 IS 7 2* 7 "N" SE$L KIT OM"LETE SET 4O! TO07 "!ESSOTE K %LINDE! 9TO" DIE: SHEET $L.MINI.M - H.4 5ELDIN+ M$ HINE 1 T./E H.4 - H.4 5ELDIN+ M$ HINE 1 T./E H.4 - H.4 5ELDIN+ M$ HINE 1 ".SH !OD ".N E"7)))>7)8( 4O! NE5 H4 5ELDIN+ M3 T./E7M$ND!IL +.IDE T./E 4O! NE5 H4 5ELDIN+ M3 . TIME! == ==8 &)) TD" ,= 2 - H.4 5ELDIN+ 1 TIME! &* K 2 !EL$% ) 7 , SE 9ME$: - H 4 5ELDIN+ M$ HINE 1 TIME! 7 ME$ (686 28#$ 3D )7, SE H4 5ELDIN+ M$ HINE. T!$NS4O!ME! &,) L *' - H.4 5ELDIN+ M$ HINE 1 T!$NS4O!ME! M23 (88,=))) - H 4 5ELDIN+ M$ HINE 1 T!$NS4O!ME! M&3 (88,=))) - H 4 5ELDIN+ M$ HINE 1 H.T T!$NS4O!ME! ODE 2* 7 DKH 7 ,& 4O! NE5 H4 5ELDIN+ M3 4IL$MENT T!$NS4O!ME! ODE 7 =,) L,, 4O! NE5 H4 5ELDIN+ M3 O""E! SHEETt 7 (( +.$+E 2 4EEL 5IDTH SE$L KIT OM"LETE SET 4O! TO" DIE %LINDE! NE5 H4 5ELDIN+ M$ HINE !E+.L$TO!7$I! "!ESS.!E !E+.L$TO! "!ESS.!E +$.+E 4O! LE$K HE KIN+ M$ HINE & & ) ) ) ) ) & ) ) ) ) & ) ) ) ) 2 (2 ) ) (* &) &) ( ' ) && = & ( & ) & ) ) 2 & ) 2 & & & & & ) ) 2 2 # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # # #
33

&)) &)& &)2 &)( &), &)* &)8 &)' &)= &)> &&) &&& &&2 &&( &&, &&* &&8 &&' &&= &&> &2) &2& &22 &2( &2, &2* &28 &2' &2= &2> &() &(& &(2 &(( &(, &(* &(8 &(' &(= &(> &,) &,& &,2 &,( &,, &,* &,8 &,' &,= &,> '())'2'),) '())'2')*) '())'()))) '())'())&) '())'())2) '())'())() '())'()),) '())'())*) '())'())8) '())'())') '())'())=) '())'())>) '())'()&)) '())'()&&) '())'()&2) '())'()&() '())'()&,) '())'()&*) '())'()&8) '())'()&') '())=)))8) '())=)))') '())=)))=) '())=)*))) '())=)*)&) '())=)*)2) '())=)*)() '())=)*),) '())=)8))) '())=)8)&) '())=)8)2) '())=)8)() '())=)8),) '())=)'))) '())=)')&) '())=)')2) '())=)')() '())=)'),) '())=)')*) '())=)')8) '())=&)))) '())=&))&) '())=&))2) '())=&*))) '())=&*)&) '())=&*)2) '())=&*)() '())=&*),) '())=&*)*) '())=&*)8) ELE T!OST$TI DIS H$!+E .NIT 4O! NE5 H4 5ELDIN+ M$ HINE $ !%LI /LO K 4O! H4 5ELDIN+ M$ HINE #$L#E 94ESTO: M * - H.4. 5ELDIN+ M$ HINE 1 4ESTO #$L#E *7(7+7D7(/ - H.4. 5ELDIN+ M$ HINE 1 #$L#E $I! SH.T O44 9T%"E; HE 7 ( 7 &32 7 Q4 7 &2: #$L#E 94ESTO: &27>,&- H.4 5ELDIN+ M$ HINE 1 #$L#E 94ESTO: &((2' +!L$ - H.4 5ELDIN+ M$ HINE 1 #$L#E 94ESTO: &((2> +!L$ - H.4 5ELDIN+ M$ HINE 1 #$L#E 94ESTO: &*&&>) - H.4 5ELDIN+ M$ HINE 1 #$L#E 7 NON !ET.!N #$L#E +!L$7M*7QS787/ #$L#E 7 NON !ET.!N #$L#E6 ODE 7 HQS 7 8 ".N &*(,8= #$L#E 7 NON !ET.!N #$L#E ODE7+!L$7&3,7QS7=7!S7/ ".N &82>8= #$L#E 7 NON !ET.!N #$L#E6 ODE7+!LC7&3=3"K7,7= ".N &*&&>) #$L#E 7 Q.I K E0H$.ST #$L#E SE 7 &327/ #$L#E 7 Q.I K E0H$.ST #$L#E MODEL Q7, &32 IN H /S" #$L#E ODE 7 MNIH 7 *327D7(74!7 #$L#E 7 NON !ET.!N #$L#E ODE 7 H 7 QS 7 &2 #$L#E 7 NON !ET.!N #$L#E ODE +!L$7&327/ #$L#E 7 NON !ET.!N #$L#E ODE7+!L$7&3=7QS787!S7/ #$L#E 7 NON !ET.!N #$L#E ODE 7 +!L$ 7 M* 7 QS 7 8 D !S 7 / !.//E! SLEE#E "3N Q72,& 9HOT M$!KIN+: ONNE TO!7M$LE ONNE TO! K7&3,7"K78 ONNE TO!7".SH7IN TEE ONNE TO! QST7= /OLT M * 0 &8 7 &) - HOT M$!KIN+ M$ HINE 1 /OLT M * 0 &2 7 &) - HOT M$!KIN+ M$ HINE 1 /OLT M * 0 2* 7 ' - HOT M$!KIN+ M$ HINE 1 /OLT M * 0 2) 7 = - HOT M$!KIN+ M$ HINE 1 "L$NE STO K6 "$!T NO; Q ()= 4O! HOT ST$M"IN+ M3 LE4T SIDE /.SH "3N7&7'( D!+.NO;"&& HOT M$!KIN+ M$ HINE !I+HT SIDE /.SH7"3N7&7'(6D!+.NO."&) HOT M$!KIN+ M$ HINE /.SH 7 INTE!MEDI$TE +E$! SH$4T &*7H$.NO;& HOT M$!KIN+ M$ HIE /.SH 4O! HOT ST$M"IN+ M3 M$TE!I$L ; H%L.M /.SH 4O! HOT ST$M"IN+ M3 M$TE!I$L ; /L$ K TE4LON SH$4T7 H$!$ TE! 5HEEL7& '( !+. NO; " 8) HOT M$!KIN+ M$ HINE H$!$ TE! 5HEEL "3N 7& 9HOT M$!KIN+: INDE0IN+ 5HEEL H$!$ TE! 5HEEL T.!NIN+ +E$! "3N / 7&&= 9HOT M$!KIN+: !I+HT SIDE 5HEEL O#E! 95HITE:"3N "78&9HOT M$!KIN+: LE4T SIDE 5HEEL O#E! 95HITE:"3N "7*> 9HOT M$!KIN+: H$!$ TE! "!INTIN+ 5HEEL 2., G 2., MM 4L$T 4$ E6 "$!T NO;" & 4.SE E" '7* - HOT M$!KIN+ M$ HINE 1 4.SE 7 +L$SS 4.SE "357 E" 4.SE7+L$SS 4.SE () MM & K "L$TE "EN 7 / &'2 7 ( - HOTM$!KIN+ M$ HINE 1 MIDDLE "L$TE "EN 7" 2=7&& - HOTM$!KIN+ M$ HINE 1 MIDDLE "L$TE "EN7" 2'72 - HOTM$!KIN+ M$ HINE 1 MIDDLE "L$TE "EN 7" (72 - HOT M$!KIN+ M$ HINE 1 MIDDLE "L$TE "EN 7" *72 - HOT M$!KIN+ M$ HINE 1 MIDDLE "L$TE "EN DD ,722 - HOT M$!KIN+ M$ HINE 1 DISK "L$TE 4.LL SET - LETTE! < N.M/E! 1 HOT M$!KIN+ M$ HINE ) ( & 2 & & ' & & ( ) ) & & ( , & 2 8 ( &) ) ) ) ) ) ) 2 ' > 2 2 ) , = , &( ) ) ( ( ( ) = 2 ( &, ' * ) # # # # # # # # # # # # # # # # # # # # E E E E E E E E E E E E D D D D D D D D D D D D D D D D D D
34

&*) '())=&*)') $!M < H$NDLE SET 9SET O4 "3N 5& *2& TH!O.+H *,': ) D
!he 1E8 analysis is arried out for @<< items of ma hine spares. For referen e, 1E8 $nalysis of :@< items is sho"n in the ta&le :. !he inferen e of the analysis is as listed
!otal num&er of vital items
::3
!otal num&er of essential items
536
!otal num&er of desira&le items
:5<
A%C A!a'0+i+
!he $09 lassifi ation pro ess is an analysis of a range of items, su h as finished produ ts or ustomers into three ategories2 $ % outstandingly importantJ 0 % of average importan eJ 9 % relatively unimportant as a &asis for a ontrol s heme. Ea h ategory an and sometimes should &e handled in a different "ay, "ith more attention &eing devoted to ategory $, less to 0, and still less to 9. .opularly #no"n as the =4<S5<= rule $09 on ept is applied to inventory management as a rule%of%thum&. It says that a&out 4<A of the (upee value, onsumption "ise, of an inventory remains in a&out 5<A of the items. !his rule, in general, applies "ell and is fre*uently used &y inventory managers to put their efforts "here greatest &enefits , in terms of ost redu tion as "ell as maintaining a smooth availa&ility of sto #, are attained. !he $09 on ept is derived from the .areto+s 4<S5< rule urve .It is also #no"n as the 4<%5< on ept. Here, (upee value of ea h individual inventory item al ulated on annual or monthly onsumption &asis as High value ($), intermediary value (0) , Lo" value (9) 5<A of the items a ount for 4<A of total inventory investment spe ifi items on "hi h efforts an &e on entrated profita&ly provides a sound &asis on "hi h to allo ate funds 35 TKM Institute of Management
A study on Spare parts Management at HLL and time . $,0 O 9 , all have a pur hasing S storage poli y i.e $, most riti ally revie"ed , 0 little less "hile 9 still less "ith greater results Inventory 9ontrol $ppli ation2 !he $09 lassifi ation system is to grouping items a ording to annual issue value, (in terms of money), in an attempt to identify the small num&er of items that "ill a ount for most of the issue value and that are the most important ones to ontrol for effe tive inventory management. !he emphasis is on putting effort "here it "ill have the most effe t. $ll the items of inventories are put in three ategories, as &elo" 2 A I"&$+ 2 !hese Items are seen to &e of high (upee onsumption volume. =$= items usually in lude :<%5<A of all inventory items, and a ount for around 4<A of onsumption value % I"&$+ 2 =0= items are those that are 7<%6<A of all inventory items, and a ount for :@A of onsumption value. !hese are important, &ut not riti al, and don+t possess sour ing diffi ulties. C I"&$+ 2 =9= items a ount for 6<%@<A of all inventory items, &ut only @ A of onsumption value. 9hara teristi ally, these are standard, lo"% ost and readily availa&le items. !his lassifi ation allo"s the inventory manager to assign priorities for inventory ontrol. -tri t ontrol needs to &e #ept on $ and 0 items, "ith prefera&ly lo" safety sto # level. !a#ing a lenient vie", the 9 lass items an &e maintained "ith looser ontrol and "ith high safety sto # level. !he $09 on ept puts emphasis on the fa t that every item of inventory is riti al and has the potential of affe ting adversely produ tion, or sales to a ustomer or operations. !he ategori,ation helps in &etter ontrol on $ and 0 items. !he methodology used here in the analysis is to find out the umulative onsumption value and thus lassifying the spares "ith 4<%5< prin iple. TA%LE 2- A%C A!a'0+i+
F) I!E' 9)8E O I!E' F$'E 9)F-'. 9)F-'. 9C' A 9L$-1$LCE 9.1 91 ;4 5<7@@635 5<7@@635 5; $ @5 @<3:444 5@6:B7@< 7B $
: B7<<B;<<B< 8IE % WEL8IFG 8IE 7 .)(! !). O 5 B:<<6<<<B< WI(E GCI8E $--E'0L? CFI! WI!H
36

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37

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B3 B7<<B<<@5< 8.9 ')!)( (HF WEL8IFG 'S9) BB B7<<;6<<5< -EF-)(- % .H)!)ELE9!(I9 -L)! B4 B7<<B<<53< DFIFE% 9E($'I9 DFIFE $!%<<<<%< B; B3<<3<@<B< 'I9()1EE FIL!E(% 5:= N 5:= N : 4< B7<<B5B<7< .(E--C(E G$CGE F)( LE$D 9HE9DI 4: B3<<:<7<6< ELE'EF! )C!E( 757B;@7 45 B:<<<<<:<< -HI' F)( -W$GIFG 'S9 8IE 47 B7<<B;<5@< 8IE FIZIFG .L$!E % First "el 46 B:<<<<<<4< 8IE $--E'0L? F)( -W$GIFG '$9HI 4@ B7<<7<7<:< !E'.2 9)F!()LLE( (.I8) '$DE2FC 43 B7<<B;<53< 8IE FIZIFG .L$!E C "eld die 4B B3<:<4<<7< !I'E( M EL9!()FI9. 44 B7<<B<7<:< 9?LIF8E( (FE-!)) $81 75 % 5@ $ 4; B7<<B<73@< 9?LIF8E(%()8LE-- 9?LIF8E( )-.% ;< B7<<B:4:;< (EL$? % .)WE( (EL$? % !?.E $37 ;: B7<<7:<<<< (EL$? -)LI8 -!$!E IS.257<1$9 < ;5 B3<<45B<:< -.(IFG -C9!I)F 1$L1E Y $S9 -. ;7 B7<<B<<:6< IF-E(!-% 9E($'I9 IF-E(!- F)( . ;6 B7<B6<<<7< .C'. HE$8 F)( 9)LE .$('E( .E(I ;@ B7<:3<:<<< -E$L % 'E9H$FI9$L % F)( 9.8$ ' ;3 B3<<BB<<5< 1$L1E .L$!E $--E'0L? 1)L!$$S ;B B5<7<<<<@< 9ore pin for shunt .. &ase mou ;4 B7<<3@@<<< .L$!E HE$!E( Y -HEE! EZ!(C8E( ;; B3<<47<<<< $9 1$(I$0LE -.EE8 8(I1E ')8E :<< B7<<B<75B< 9?LIF8E( 8)C0LE $9!IFG $81C%5@ :<: B7<<B<775< 8)C0LE $9!IFG 9?LIF8E( 9)8E % :<5 B:<<<6<<<< HE$!IFG ELE'EF! F)( I'.LCHE$ :<7 B7<55@3<<< F)KKLE F)( IFDGE! .(IF!E( :<6 B3<<:<6<6< FCEL FIL!E( F)( 8G -E! .$(! F) :<@ B3<<B@<::< 9( 0E$(IFG IF-E(!- 3:<%<<%<5(1 :<3 B3<<3<6<:< G$-DE! % .E('EFI!E :S36= :<B B3<<45B<5< -.(IFG 8I-9H$(GE 1$L1E Y $S9 :<4 B3<<<<:7<< HE$!IFG ELE'EF! % H9-E$LIFG :<; B7<<B5::B< -E$L DI! F)( 0)!!)' 8IE .(E-::< B3<<B<<<;< GCI8E $--E'0L? F)( 1)L!$5 5 7 3 3 6 56 6 5 7 7 B 6 : 5 3 @7 6 : 6 7 3 : : 6 : :< : 4 :5 :@ 66 :<< 5 3 @63;6 @5;4B @535: @:73B @<35@ 6;<@3 6B;54 6B656 6B74< 633B7 66;54 667B3 6734: 65@34 6:;;5 6:3@5 6<4;; 74<;3 74<35 7B473 7B<6< 733;< 7@@35 7@7;5 766;3 77475 77B@< 77556 75;<; 75B4< 757B4 755:@ 75:75 75<<4 7:@<< 3@47<B6@ 3@447B75 3@;737@7 3@;4BB5< 33<7476@ 33<4B6<: 33:7@75; 33:45B@7 3357<:77 335B34<3 3375:B76 33733::< 336<;B;: 336@57@; 336;67@: 33@73<<7 33@B3;<5 333:6;;4 333@7<3< 333;<4;3 33B5B;73 33B36353 334<<:44 3347@@4< 334B<<B@ 33;<7;<4 33;7B3@4 33;B<44: 3B<<7B;< 3B<73@B< 3B<34;64 3B:<::37 3B:775;@ 3B:3@7<7 3B:;34<7 ;@ 0 ;@ 0 ;3 9 ;3 9 ;3 9 ;3 ;3 ;3 ;3 9 9 9 9
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;4 9 ;4 9 ;4 9 ;4 9 ;4 9 ;4 9 ;4 ;4 ;4 ;4 ;4 ;4 9 9 9 9 9 9
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4"

:6@ :63 :6B :64 :6; :@< G$C B7<<B<3:7< 9$.$9I!)( % FEE8 !H()CGH 9$.$9 B7<<@<<::< !E'.E($!C(E 9)F!()LLE( )F% )FF B3<:3<<<B< .H)!)9ELL F)( 1$.)C( !HE(' 0)I B3<<46<<7< 8I-9H$(GE 1$L1E -!)..E( Y $S9 B7<B6<<<5< Deypad for ole parmer perista BB<<57<<<< HE$!E(%!C0CL$( 6 7 5 6 : 3 :@374 :@356 :@:<B :6;:7 :64@5 :6B;7 34<<<B;7 34<:36:B 34<7:@56 34<6367B 34<3:54; 34<B3<45 ;4 9 ;; 9 ;; 9 ;; 9 ;; 9 ;; 9
!he $09 $nalysis is done for @<< spares and out of "hi h :@< is listed in the ta&le 5. !he inferen e of the analysis is as sho"n &elo"2
!otal num&er of Items In 9lass $ !otal num&er of Items In 9lass 0 !otal num&er of Items in 9lass 9
55 @@ 657
!hus it is lear that only 55 items of spares is having high onsumption value and the @@ items of spares is having a medium onsumption and the rest 657 items of spares are of lo"er onsumption value. $09 lassifi ations allo" the inventory manager to assign priorities for inventory ontrol.
FSN A!a'0+i+
Here, lassifi ation is &ased on the pattern of issues from stores and is useful in ontrolling o&soles en e. F U Fast moving - U -lo" 'ovingJ F U Fon 'oving.
41
A study on Spare parts Management at HLL !o arry out an F-F analysis, the date of re eipt or the last date of issue, "hi hever is later, is ta#en to determine the num&er of months, "hi h have lapsed sin e the last transa tion. !he items are usually grouped in periods of :5 months.F-F analysis is helpful in identifying a tive items "hi h need to &e revie"ed regularly and surplus items "hi h have to &e examined further. Fon%moving items may &e examined further and their disposal an &e onsidered 'ethodology !he num&er of months for "hi h the spares are &eing moved is omputed and the analyis is done &ased on that. !he spares are lassified as Fon moving (F) if it is not having any movement for more than 3< months. !he spares are lassified as -lo" moving (-) if at least one or more spares are used in &et"een :5 months and 3< months. !he spares are lassified as Fast moving (F) if one or more spares are used "ithin :5 months. Inferen e !he analysis is done for @<< spares and out of "hi h 5;6 spares is identified as Fon moving and 5<: items as -lo" and @ items as Fast moving spares and it sho"s the &rea# do"n maintenan e is less. CALCULATION OF RE ORDER LE1EL OF SPARES R& ,r*&r L& &'2 !his is the level at "hi h the order has to &e pla ed. !his is the vital sto # level at "hi h the re*uisitions are made out for further supplies. For finding out the ()L, the lead%time and the riti ality of the item is needed. !he formula used is2 ()LU$'9 N L! V D N W $'9NL! Where $'9U $verage monthly onsumption L! U Lead time in months DU 9riti al fa tor of items ( for 1, DU5.772 E, DU:.3@28, DU:.<<) $lso ()L is the sum of 0uffer sto # and -afety -to # 0uffer -to #2
42
A study on Spare parts Management at HLL !his is the *uantity of sto #, "hi h is onsumed during the lead%time period. For example, if the average monthly onsumption is L$'9 unitsSmonth and the Lead%!ime is LL!E months, then 0uffer -to #U $'9NL! units -afety -to #2 In real life situations, t"o fa tors plays important role in the design of a system. !he first fa tor is that demand is never ertain and is distri&uted over a set of pro&a&le values. -e ondly the lead time is never fixed &ut varies a ertain range of days. $lso it is a fun tion of the servi e level &ased on the riti ality of the spare. !he value of safety sto # an &e al ulated as follo"s2 -afety sto #U DN W$'9 NL! $lso the safety sto # is usually #ept as the minimum sto #. the reorder point for replenishment of sto # o urs "hen the level of inventory drops do"n to ,ero. In vie" of instantaneous replenishment of sto # the level of inventory /umps to the original level from ,ero level. In real life situations one never en ounters a ,ero lead%time. !here is al"ays a time lag from the date of pla ing an order for material and the date on "hi h materials are re eived. $s a result the reorder level is al"ays at a level higher than ,ero, and if the firm pla es the order "hen the inventory rea hes the reorder point, the ne" goods "ill arrive &efore the firm runs out of goods to sell. !he de ision on ho" mu h sto # to hold is generally referred to as the order point pro&lem, that is, ho" lo" should the inventory &e depleted &efore it is reordered. !he t"o fa tors that determine the appropriate order point are the pro urement or delivery time sto # "hi h is the Inventory needed during the lead time (i.e., the differen e &et"een the order date and the re eipt of the inventory ordered) and the safety sto # "hi h is the minimum level of inventory that is held as a prote tion against shortages. !herefore (eorder .oint U Formal onsumption during lead%time V -afety -to #.
43
A study on Spare parts Management at HLL -everal fa tors determine ho" mu h delivery time sto # and safety sto # should &e held. In summary, the effi ien y of a replenishment system affe ts ho" mu h delivery time is needed. -in e the delivery time sto # is the expe ted inventory usage &et"een ordering and re eiving inventory, effi ient replenishment of inventory "ould redu e the need for delivery time sto #. $nd the determination of level of safety sto # involves a &asi trade% off &et"een the ris# of sto #%out, resulting in possi&le ustomer dissatisfa tion and lost sales, and the in reased osts asso iated "ith arrying additional inventory. $nother method of al ulating reorder level involves the al ulation of usage rate per day, lead time "hi h is the amount of time &et"een pla ing an order and re eiving the goods and the safety sto # level expressed in terms of several days+ sales. (eorder level U $verage daily usage rate x lead%time in days. From the a&ove formula it an &e easily dedu ed that an order for replenishment of materials &e made "hen the level of inventory is /ust ade*uate to meet the needs of produ tion during lead%time. !he ()L )F @<< item of spares is al ulated and out of "hi h al ulation of :@< items is sho"n for referen e in ta&le 7. Ta:'& 3-Fi;i!( "h& ROL
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
44

:: :5 :7 :6 :@ :3 :B :4 :; 5< 5: 55 57 56 5@ 53 5B 54 5; 7< 7: 75 77 76 < B7<<B<3:@ < B7<<B<B<< < B7<<B<B<: < B7<<B<B<5 < B7<<B<B<7 < B7<<B<B<6 < B7<<B<4<< < B7<<B<4<: < B7<<B<4<5 < B7<<B<4<7 < B7<<B<4<6 < B7<<B<4<@ < B7<<B<4<3 < B7<<B<4<B < B7<<B<4<4 < B7<<B<4<; < B7<<B<;<< < B7<<B<;<: < B7<<B:<<< < B7<<B:<<: < B7<<B:<<5 < B7<<B:<<7 < B7<<B:<<6 < B7<<B:<<@ < .C(.)-E 9$.$9I!)( :3<<.F 8($L)(I9 F)( HF WEL8IFG '$9HIFE 9$(8 $C!) !CFIFG Y H.F WEL8IFG '$9HIFE [ 9$(8 LI'I! 9)F!()L Y H.F WEL8IFG '$9HIFE [ 9$(8 $(9 -C..(E--)( Y H.F WEL8IFG '$9HIFE[ E!HE(FE! IF!E(F$9E ')8CLE%FEW HF WEL8IFG 'S9 9$(8%$!- 9$(8 .()!E9!I)F -?-!E' F)( FEW HF WEL8IFG 'S9 -.$F 8E1I9E Y H.F. WEL8IFG '$9HIFE [ !E-!IFG 8E1I9E F)( $.9%0)$(8- )F H.F.WEL8IFG 'S9. !E-!IFG 8E1I9E F)( LI'I! 9)F!()L%0)$(8E % -!). ')8CLE 9)8EUDI ..F Z.- $'@:6< HF WEL8IFG 'S9 GC$(8- -$FE!? ')8CLE 9)8EUD@ ..F Z.- $-@:6< F)( FEW HF WEL8G !W) % H$F8 9)F!()L 8E1I9E, 9)8E U D4, ..F Z.-%09 :::< $F$L)G 9)'0) ')8CLE 561 89 9)8E E- ..F I9 3;7 LG 665 (F .()!E9!I)F S I-)L$!I)F F)( HF WEL8IFG -!$!I)F -!E..E( ')!)( 8(I1IFG -?-!E' -LI!!IFG .CF9HIFG -?-!E' F)( 0)!!)' )C! LE! 0$G .)-II!I1E S FEG$!I1E L)GI9 56 1 89, .)-I!I1E L)GI9 56 1 89, <.@ $ HE$!IFG ELE'EF! . 5 HK Y H.F WEL8IFG '$9HIFE [ -WI!9H ELE'EF! 9)8E -5, -7, -6, -@ ..F%@.<<:<<.:<7 -WI!9H ELE'EF! 9)8E%-5, -7, -6, -@ ..F @.<<:<<.<@7 -WI!9H ELE'EF! 9)8E%-5<, -5:, ..F @.<<:<<.:<@ -WI!9H ELE'EF!, 9)8E%-:5 ..F @.<<:<<.:76 F)( FEW HF WEL8.'S9 HE$!IFG ELE'EF! 9)8E :<<<W F)( FEW HF WEL8IFG 'S9 : 5 6 < : < : < < : : : : < < < 5 5 : : : : : : <.<6 < < <.<: < < <.<6 <.<7 <.<7 <.<6 <.<4 <.<: < <.<5 <.65 <.65 <.6@ <.6@ <.6@ <.6@ <.6B <.6B <.6B <.<5 :6 3 ; ; ; ; ; ; 4 ; 3 4 4 B 6 5 5 7 3 ; 5 5 : :5 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5 < < : < < 5 : : 5 5 : < : 6 7 7 6 B ; 6 6 7 :
45

7@ 73 7B 74 7; 6< 6: 65 67 66 6@ 63 6B 64 6; @< @: @5 @7 @6 @@ @3 @B @4 @; B7<<B:<<3 < B7<<B:<<B < B7<<B:<<4 < B7<<B:<<; < B7<<B:<:< < B7<<B:<:: < B7<<B::<< < B7<<B::<: < B7<<B::<5 < B7<<B::<7 < B7<<B::<6 < B7<<B::<@ < B7<<B::<3 < B7<<B::<B < B7<<B:5<< < B7<<B:5<: < B7<<B:5<5 < B7<<B:5<7 < B7<<B:5<6 < B7<<B:5<@ < B7<<B:5<3 < B7<<B:5<B < B7<<B:5<4 < B7<<B:5<; < B7<<B:5:< $8-)(.!I)F 8(?E( ')8EL L8F%H-%GIS5 561 89 .$(! F). :B4@54 FEIF FIL!E( -IKE 2 <.<: 'I9()F ')8EL 2 LF'$ :S5%H%$ FIL!E( CFI!- @FI9 % $C!) 8($IF @ 'I9()F .$(! F) 2 :35356 FIL!E( CFI!- @'!9 % $C!)8($IF, @ 'I9()F .$(! F)2 :35356 FIL!E( CFI!- WI!H $C!) 8($IF, 6< 'I9()F .$(! F) 2 :@;3:4 'I9() FIL!E( I 'I9()F ')8EL 2 LF'0%7S6%8%'$ZI%$ 9C!!IFG DFIFE ..F E.%<<<;%<36 F)( HF WEL8IFG 'S9 9C!!IFG )1EF ..F E.%<<<;%<B7 F)( FEW HF WEL8IFG 'S9 9C!!IFG .I.E ..F 8I$ ; N 57, 4<, !?.E 5E F)( FEW HF WEL8.'S9 9C!!IFG .I.E ..F 8I$ 7 N 57, 3<, !?.E 5E F)( FEW HF WEL8.'S9 9C!!IFG .L$!E 8(G F) --%<@<<%<<< F)( FEW HF WEL8IFG 'S9 0L$8E%)C!E( !(I''IFG 0L$8E % 7@< 'L 0L$8E%)C!E( !(I''IFG 0L$8E % 6@< 'L 0L$8E%)C!E( !(I''IFG 0L$8E % 7<< 'L 9)F!$9! .L$! Y H.F WEL8IFG '$9HIFE [ .L$!E 9$.$9I!)( (. 4@ M 8- % <7<<B< Y H.F WEL8IFG '$9HIFE [ .L$!E 9)F!$9! Y H F WEL8IFG '$9HIFE ] .L$!E -!EF9IL F)( HF WEL8IFG '$9HIFE 9)F!$9! .L$!E ( HF WEL8IFG '$9HIFE.) 9)F!$9! -!(I. !?.E 9)F!$9! .L$!E .$(! F)25<@B7 F)( HF WEL8IFG 'S9. 9)F!$9! .L$!E .$(! F)2:@<7B F)( HF WEL8IFG 'S9. 9C!!IFG .L$!E .$(! F)2--%<@<:%<<7 .)-: F)( HF WEL8IFG 'S9. 9)F!$9! .L$!E .$(! F)25<@B< (73E :<<) F)( HF WEL8IFG 'S9. 9)F!$9! .L$!E F)( H.F.WEL8IFG 'S9. < < < < < : < < < < : < < < < 5 75 < < 7@ :< :< 7 B < <.@6 <.47 <.:B <.<5 <.:3 <.76 <.@6 <.<5 <.56 <.<5 <.<6 <.<6 <.<6 <.<6 <.<6 <.<@ <.<B <.:5 <.:3 <.:3 <.:3 <.:B <.:B <.:B <.5: :6 :7 :3 :7 :: :< 6 6 B @ 4 @ 4 @ :7 :7 :7 :@ :@ :@ :5 :5 4 :: :: 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 :6 :4 B : @ 4 3 : @ : 5 : 5 : 5 7 7 @ 3 3 @ @ 6 @ 3
46

3< 3: 35 37 36 3@ 33 3B 34 3; B< B: B5 B7 B6 B@ B3 BB B4 B; 4< 4: 45 47 < B7<<B:5:: < B7<<B:5:5 < B7<<B5<5@ < B7<<B5<53 < B7<<B55<: < B7<<B57<< < B7<<B57<: < B7<<B56<< < B7<<B56<: < B7<<B56<5 B B7<<B5@<< < B7<<B5@<: < B7<<B5@<5 < B7<<B53<< < B7<<B53<: < B7<<B53<5 < B7<<B53<7 < B7<<B53<6 < B7<<B5B<< < B7<<B5B<: < B7<<B5B<5 < B7<<B5B<7 < B7<<B5B<6 < B7<<B5B<@ < 9)F!$9! .L$!E F)( H.F.WEL8IFG 'S9 9)F!$9! .L$!E F)( H.F.WEL8IFG 'S9 -WI!9H % .()ZI'I!? (EE8 -WI!9H 9)8E % K % :@G '55 M 0 -WI!9H % .()ZI'I!? (EE8 -WI!9H % 9)8E % H.- % I- % 5@ M .F. -E$L DI! 9)'.LE!E -E! F)( !)Z% .(E--)!E9D 9?LIF8E( (!). 8IE) -HEE! $LC'IFIC' Y H.F WEL8IFG '$9HIFE [ !C0E H.F Y H.F WEL8IFG '$9HIFE [ !C0E H.F Y H.F WEL8IFG '$9HIFE [ .C-H ()8 ..F E.%<<<;%<37 F)( FEW HF WEL8IFG 'S9 !C0E%'$F8(IL GCI8E !C0E F)( FEW HF WEL8IFG 'S9. !I'E( 44 443 :<< !8. 64 9 5 Y H.F WEL8IFG [ !I'E( :@ D 5 (EL$? < % 6 -E9 ('E$) Y H F WEL8IFG '$9HIFE [ !I'E( % 'E$ 7,3, 531$9S89 <%6 -E9 HF WEL8IFG '$9HIFE. !($F-F)('E( :6< L @B Y H.F WEL8IFG '$9HIFE [ !($F-F)('E( '5S 73364<<< Y H F WEL8IFG '$9HIFE [ !($F-F)('E( ':S 73364<<< Y H F WEL8IFG '$9HIFE [ H.! !($F-F)('E( 9)8E 5@ % 8DH % 6: F)( FEW HF WEL8IFG 'S9 FIL$'EF! !($F-F)('E( 9)8E % 46< L66 F)( FEW HF WEL8IFG 'S9 9)..E( -HEE!t % 77 GC$GE 5 FEEL WI8!H -E$L DI! 9)'.LE!E -E! F)( !). 8IE 9?LIF8E( FEW HF WEL8IFG '$9HIFE (EGCL$!)(%$I( .(E--C(E (EGCL$!)( .(E--C(E G$CGE F)( LE$D 9HE9DIFG '$9HIFE ELE9!()-!$!I9 8I-9H$(GE CFI! F)( FEW HF WEL8IFG '$9HIFE $9(?LI9 0L)9D F)( HF WEL8IFG '$9HIFE :: 4 : 7 : < : < < 5 : < 5 : : : : : < < 5 5 < 7 <.56 <.5B <.7: <.7; <.6 <.6 <.65 <.65 <.65 <.<@ <.<B <.:5 <.:3 <.:3 <.:3 <.:B <.:B <.:B <.5: <.56 <.56 <.<@ <.<B <.:5 4 B B 7 :4 7 4 : : : :5 @ B 3 @ 7 4 B 3 6 :< :< :6 :B 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 5.7 7 @ @ @ 6 :6 6 4 5 5 < 7 5 7 7 7 5 6 6 6 7 3 5 7 @
47

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
4!

:7 7 :7 6 :7 @ :7 3 :7 B :7 4 :7 ; :6 < :6 : :6 5 :6 7 :6 6 :6 @ :6 3 :6 B :6 4 :6 ; :@ < B7<<4:3<< < B7<<4:3<: < B7<<4:3<5 < B7<<45<<< < B7<<45<<: < B7<<45<<5 < B7<<45<<7 < B7<<45<<6 < B7<<45<<@ < B7<<45<<3 < B7<<45<<B < B7<<45<<4 < B7<<45<<; < B7<<45:<< < B7<<46@<< < B7<<46@<: < B7<<46@<5 < B7<<463<< < 9)1E( ($, (IGH!), .$(! F)2 ..3: F)( H)! -!$'.IFG 'S9 9)1E( (0), .$(! F). . 64 F)( H)! -!$'.IFG 'S9 9)1E( ($, LEF!), .$(! F). . @; F)( H)! -!$'.IFG 'S9 FC! O W$-HE( Y H)! '$(DIFG '$9HIFE [ WHEEL W$-HE( (LEF!), .$(! F). . @ F)( H)! -!$'.IFG 'S9 WHEEL W$-HE( ((IGH!), .$(! F)2 . 7 F)( H)! -!$'.IFG 'S9 WHEEL W$-HE(, .$(! F)2 .6 F)( H)! -!$'.IFG 'S9 GE$( 9)LL$( W$-HE( ($), .$(! F). . 75 F)( H)! -!$'.IFG 'S9 GE$( 9)LL$( W$-HE( (0), .$(! F). . 7< F)( H)! -!$'.IFG 'S9 GE$( W$-HE( (0), .$(! F). . 54 F)( H)! -!$'.IFG 'S9 GE$( W$-HE( (LEF!), .$(! F). . 5B F)( H)! -!$'.IFG 'S9 GE$( W$-HE( ((IGH!), .$(! F). . 5B F)( H)! -!$'.IFG 'S9 WHEEL W$-HE(, .$(! F)2 . 6@ F)( H)! -!$'.IFG 'S9 -)LEF)I8 1$LE ')8EL 1. 7<<, BSW, 1 % :<<$9 H)! '$(DIFG '\9 HE$!E( .\F %.% 5%: Y H)!'$(DIFG '$9HIFE [ HE$!E( 57< 1 5<< W .$(! F)( H 6<5 $ :5 YH)!'$(E([ HE$!E( % !C0CL$( HE$!E( F)( H)! '$(DIFG 'S9 0($-- 0)8? (EL$? % '$!-C-HI!$ H95%H%$9 ::<1, :<<S::<1 < < < 5 < < < < < < < < < 5 6 : 5 < <.46 <.46 <.43 <.<7 <.<7 <.<6 <.<4 <.<: <.<: <.<: <.<7 <.<6 <.<4 <.<: <.<5 <.65 <.65 <.6@ B ; B 5 5 6 6 6 6 6 6 : : : 5 6 5 7 : : : : : : : : : : : : : : : : : : ; :: 4 < < : : < < < < < < < < 7 5 7
ECONOMIC ORDER 6UANTITY It is that *uantity at "hi h the ost of pro uring the annual re*uirement of an item and the inventory arrying ost are e*ual.i.e. "here the total of the t"o osts is the lo"est. !he formulae for finding the E)P of an item is PU (5$.SC9) X (:S5)
5"
A study on Spare parts Management at HLL Where $ U $nnual $verage onsumption in units . U .ro urement ost per order (:<<< per order) 9 U Inventory arrying ost (7<A of unit pri e) C U Cnit pri e. E)P is al ulated for @<< items of spares and out of "hi h :@< items is sho"n &elo" Ta:'& 9-Ca'cu'a"i,! ,- EO6
ITEM ODE ')))&))))) ')))2))))) ')))2)))2) ')))2))),) ')))2&)))) ')))2&))&) ')))2&))2) ')))2&))() ')))2&))*) ')))2&))=) ')))2&))>) ')))2&)&)) ')))2&)&2) ')))2&)&() ')))2&)&,) ')))2&)&*) ')))2&)&8) ')))2&)&') ')))2&)&=) ')))2&)&>) ')))2&)2)) ')))2&)2&) ')))2&)22) ')))2&)2() ')))2&)2,) ')))2&)2*) ')))2&&))) ')))2&&)&) ')))2&&)() ')))2&&),) ')))2&&)*) ')))2&&)8) ')))2&2))) ')))2&2)&) ')))2&2)2) ')))2&2)() ')))2&2),) ')))2&2)*) ')))2&2)8) ITEM N$ME $$ & 2 ( , * 8 ' = > &) && &2 &( &, &* &8 &' &= &> 2) 2& 22 2( 2, 2* 28 2' 2= 2> () (& (2 (( (, (* (8 (' (= (> $ TI#$TED $L.MIN$ 9DESI $NT: 4O! HE$TLSS T%"E D!IE! /E$!IN+ !OLLE! ()2), SK4 /E$!IN+ !OLLE! (N.)8E 3()8 /E$DIN+ 7 TO" O#E! /E$DIN+ 4O! HE$TE! MI0E! M3 /E$!IN+ 7 /$LL 8()= /E$!IN+ 7 /$LL 8()8 /E$!IN+ D /$LL 82)( C /E$!IN+ D /$LL 8))) CC /E$!IN+ /$LL (,) # ( /E$!IN+ /$LL 7 NO; 82)* /E$!IN+ /$LL 7 NO; 82)2 /E$!IN+ /$LL NO;8()8 /E$!IN+ DEN(&8 /E$!IN+ 8(&, 7 4O! KI!LOSK$! MOTO! &))H" 4!$ME L 5 2*)* /E$!IN+ D /$LL 8()' 7 !EQ.I!ED 4O! #OLT$S 5$TE! ".M" /E$!IN+ D /$LL /E$!IN+ 82)8 2C /E$!IN+ /$LL NO; 82)( /E$!IN+ /$LL NO; 8()= /E$!IN+ 8)), CC /E$!IN+7T$"E! !OLLE! ()()( 4O! STE!ILICE! /LO5E!. /E$!IN+ 7 !OLLE! /E$!IN+ T 7 &'=2 Q /E$!IN+ NEEDLE 4O! S5$+IN+ M3 / &=&8 /E$!IN+ 8))( /E$!IN+ 8()& /$LL 4O! $.TO L$#E T!OLLE% 9 &3, I : /$LL 4O! $.TO L$#E T!OLLE% 9 (3* I : /E$!IN+ /$LL 8))) C /$LL /E$!IN+ 82' C /E$!IN+ D /$LL /E$!IN+ 82)2 CE /E$!IN+ D /$LL /E$!IN+ 8)= C /$LL /E$!IN+ 8))&7C /E$!IN+ 7 S"$ E! /E$!IN+ 9D+ SET: /E$!IN+ D /$LL SK4 82)8 CC /E$!IN+ /$LL 7 NO; 82)( CC /E$!IN+ /$LL NO; 82), CC /E$!IN+ /$LL NO; 82)* CC /E$!IN+ /$LL NO; 8()* CC /E$!IN+ /$LL NO; 82)' CC /E$!IN+ /$LL NO; 82)= CC 2 2 & >= & 2 & * ( , *2 , & ,) & ( &* & 2 & () () 8 & 2 2 2 2 2 & &* * & (( 2 ( & & , .NIT "!I E 2=&.&& &*(.>2 >)*.=' &)'= ()8.2( &*2.== ,>.,( *=.2, ((8.)8 &)&.&' ,,.'2 &8'.,' 8)(2 &)&=.&8 2=*.=' &',.'2 *8.&& 28) 8>.8= ,82.&= ()&8 >*.8= >2 &)) ).(( ).,2 *'.2 *2 ,>.,( ,&.8 *,.'8 &&.2( &*,.8= 8>.8= =*.&> &(&.2* &&'.&, &8=.,= &='.&2 EOQ ) & ) & ) & 2 ( ) 2 &( & ) & ) & 8 ) 2 ) ) * 2 & (*) 2'* 2 2 2 2 8 &8 & ' & & & ) &
NO
51

,) ,& ,2 ,( ,, ,* ,8 ,' ,= ,> *) *& *2 *( *, ** *8 *' *= *> 8) 8& 82 8( 8, 8* 88 8' 8= 8> ') '& '2 '( ', '* '8 '' '= '> =) =& =2 =( =, =* =8 =' == => ')))2&2)') ')))2&2)=) ')))2&2)>) ')))2&2&)) ')))2&2&&) ')))2&2&2) ')))2&2&() ')))2&2&,) ')))2&2&*) ')))2&2&8) ')))2&())) ')))2&()2) ')))2&(),) ')))2&()*) ')))2&()8) ')))2&()') ')))2&()>) ')))2&(&)) ')))2&(&&) ')))2&(&2) ')))2&(&() ')))22&))) ')))22&)&) ')))22&)2) ')))22&)() ')))22&),) ')))2()))) ')))2())&) ')))2())2) ')))2())() ')))2*)))) ')))2*2))) ')))())))) ')))()&))) ')))()&)&) ')))()&)2) ')))()&)() '))&()&)8) '))&()&)') '))&()&&() '))&()&&,) '))&()&&*) '))&()&&8) '))&()&&') '))&()&&>) '))&()&2)) '))&()&2&) '))&()&22) '))&8&)))) '))&8&))&) /E$!IN+ /$LL NO; 82)> CC /E$!IN+ /$LL NO; 82&) CC /E$!IN+ /$LL NO; 82&8 CC /E$!IN+ /$LL NO; 82&= CC /E$!IN+ /$LL NO; 8(2) /E$!IN+ /$LL NO; 822& CC /E$!IN+ /$LL NO;82)8 CC /E$!IN+ /$LL NO; 8))) CC /$LL /E$!IN+ 82> 72C /E$!IN+ 8))2 CC /E$!IN+ /$LL NO; 8()= .. /E$!IN+ /$LL NO; 8(&) .. /E$!IN+ /$LL NO; 8(), .. /E$!IN+ /$LL NO; 8()* .. /!$!IN+ /$LL NO; 8()8 .. /E$!IN+ /$LL NO; 8()> .. /E$!IN+ /$LL NO; 8(&2 .. /E$!IN+ /$LL NO; 8(&, .. /E$!IN+ /$LL NO; 8(&* .. /E$!IN+ /$LL NO; 8(&8 .. /E$!IN+ /$LL NO;8()8 /E$!IN+ "ILLO5 /LO K . " 2)= NTN /E$!IN+ "ILLO5 /LO K . " 2)8 NTN /E$!IN+ "ILLO5 /LO K . " 2), NTN /E$!IN+ "ILLO5 /LO K . " 2)* NTN /E$!IN+ 7 "ILLO5 /LO K /E$!IN+ (3,I /E$!IN+ "L.M/E! /LO K I D & &E,I /E$!IN+ D "ILLO5 /LO K /E$!IN+ " 2&) H /E$!IN+ D "ILLO5 /LO K /E$!IN+ .L *)= /E$!IN+ D "ILLO5 /LO K /E$!IN+ . 2),6 INNE! DI$ ; &> MM /.SH 7/!$SS M$KE; /E$ ON T%"E ; ( DM , - &) H"1 /!.SH 7 SLI"!IN+ $!/ON /!.SH SET MODEL;NO;L 5 2*) S E!$MI $NDLE 4O! HE$TLESS T%"E D!IE! OD; ')6 ID; ,) S"E I$LI0 TE!MIN$L $D$"TO! 7 = "O!T S0 " I (2 "O!T S"E I$LI0 $!D ETHE!NET $!D D$T$ $/LE D "!INTE! MOTO! IND. TION ( "H$SE M$KE ; KI!LOSK$! MOTO! 7 IND. TION 7 ( "H$SE M$KE ; KI!LOSKE! MOTO! IND. TION ).(' K5 3 ).** H" 8>)E&8>) !"M 4L$N+E MOTO! IND. TION ( "H$SE (.' K53 * H" T%"E; 4L$N+E MOTO! 7 D. 7&* K57 M$KE7KI!LOSK$!. MOTO!7D. .7(.' K5 7 M$KE7KI!LOSK$!. MOTO! 7D. .7&.* K57M$KE7KI!LOSK$!. IND. TION MOTO!7).2* K5.7M$KE KI!LOSK$!. /LO5E! 5ITH IND. TION MOTO!7).)'*K5 MOTO! 4O! SH.NT O#EN6!$TIN+;&3(* H" MOTO! 2 H" 4O! OOLIN+ TO5E! /L$DE 7 D *>&) - "HOTO O"% M$ HINE 1 HE$T !OLLE! D *>&) - "HOTO O"% M$ HINE 1 & & (= & 2* & 2 =' &= 2 && 2, & & 2, 2 * & & 2, & 2 & 2, 8 , , = ( () & & , 2 2 &8 ( 2 ( 2 & 2 2 &') &82 & &*) ( & , 2(, 2,>.8 &,*8 2)=) 2>&2 ,28, &8,.( *2 ,8.= &)2.,> ,))., *'&.22 &*2.* &() 2*=.,( *(*.8 =*= &='(.*= ()2'.,, 2==8 &*2.== 2)&,.*, 8*8.', (8, ('>.8 (,=., 8>&.8 &&)2., =,2., (8, (&) ,8.= &(28 (>.* &8'>) ,*) &8)) ('=& 2=*> *88*.2* 8>=, ,&*22.)( 2(**'.), &(,,,.)= ((*' 8&&*.2 8'' &2(&> &&,8.8 2>>8 ) ) ) ) ) ) & &* ' & & & & & 2 ) ) ) ) ) & ) ) & & ) ) ) ) & ) 2 ) ( ) & ) ) ) ) ) ) ) ) ) ) & ) ) )
52

'))&8&))() '))&8&))*) '))&8&))8) '))&8&))') '))&8&))=) '))&8&))>) '))&8&)&)) '))&8&)&&) '))&8&)&2) '))&82))2) '))&82))() '))&82)),) '))&82))*) '))&82))8) '))&82))') '))&82))=) '))&8()))) '))&8())&) '))2)))))) '))2))))&) '))2))))2) '))2))))() '))2)))),) '))2))))*) '))2))))8) '))2))))') '))2))))=) '))2))))>) '))2)))&)) '))2)))&&) '))2))&))) '))22))))) '&))))))() '&))))))*) '&))))))') '&))))))=) '&))))))>) '&)))))&)) '&)))))&&) '&)))))&2) '&)))))&() '&)))))&,) '&)))))&*) '&)))))&8) '&)))))&') '&)))))&=) '&))))>))) '&))))>)&) '&)))())&) '&)))())2) DE#ELO"E! 7 D *>&) - "HOTO O"% M$ HINE 1 D!.M *>&) - "HOTO O"% M$ HINE 1 L$M" E0"OS.!$L 4O! "HOTO O"IE! THOSHI/$ *>&) TONNE! /L$DE 7 !E O#E!% - "HOTO O"% M$ HINE 1 /L$DE 7 H - "HOTO O"% M$ HINE 1 "!ESS.!E !OLLE! - "HOTO O"% M$ HINE 1 HE$TE! KIT74O! "HOTO O"% M$ HINE L$M" 7 HE$TE! L$M" 4O! "HOTO O"% M$ HINE MONO/LO K ".M"SET MOTO! 7&H" !"M72==) ,,)#.".M" ".M"7ISM$TE MI !O"!O ESSO! ONT!OLLED &8 H$NNEL $!T!ID+E 2 ".M"7 HI+H #$ ..M ".M" 4O! ETO STE!ILISE!. ".M" 7 S./ME!SI/LE ".M" H" ; 26 "H$SE ; (6 HE$D; >>MM ".M" MONO/LO K H"; *6 K5; (.'6 DELI#E!% HE$D; 2,M ".M" 7 MONO /LO K ".M" H" ; ).*6 "H$SE ; SIN+LE ".M" 7 4L$ME "!OO4 ".M" 5ITH MOTO! "!INTE! HE$D 4O! T#SE MS" &** "!INTE! 9> "IN: HE$D7"!INTE! HE$D 2, "IN T%!E '))G&* M$KE; E$T 3 M!4 3 MODI T./E '))G&* M$KE; E$T 3 M!4 3MODI THE!MOST$T 4O! !E4!I+E!$TO! 7 &8* LT!S. !EMOTE ONT!OL7S"$!ES 4O! C5I K .NI#E!S$L TESTIN+ M$ HINE. ONNE TION !EMOTE ONT!OL .NIT. TONNE! 7 4O! $NNON "HOTO O"% M$ HINE ; MODEL NO.N".8)&8 T%!E *>) G &* M$KE; E$T3M!4 T./E *>) G &* M$KE; E$T3M!4 THE!MOST$T 4O! 5$TE! OOLE! T%!E 7 HK.T%!E 7 !$DI$L 2&*3'* !&* &)) S. T./E 7 !$DI$L HK 2&*3'* !&* &)) S. THE!MOST$T D$N4OSS K" 8> TE!MIN$L /LO K 4O! MONO /LO K ".M" T%"E; ( DM , #$L#E 7 SOLENOID 4O! #$ ..M SE$LIN+ M3 . "L$TE 74O! 5INDIN+ M$ HINE79 .7T:. 5I!E +.IDE SH$4T; "$!T & < 2 4O! .7T 5INDIN+ M3 /LO5E! IM"ELL$! 4O! $H. DIE $SSEM/L% 4O! S5$+IN+ M$ HINE O4 (=)7$ O""E!7T H$MME! 4O! S5$+IN+ M3 DIE SHIM 4O! S5$+IN+ M3 DIE /L$DE 7 .TTIN+ /L$DE 4O! "" O#E! M$KIN+ M3 OM" 7 SE+!E+$TO! OM" 4O! . 7 T S !E5 $ND N.T 5ITH 5$SHE! , MM G = MM 9SS: ST$TI ELIMIN$TO! OM"LETE SET 94O! "" O#E! SE$LIN+ M3 : /ELT D NO#E%O! /ELT 94OOD +!$DE: 4O! "" O#E! SE$LIN+ M3 4O$M 4O! // SE$LIN+ M$ HINE H%L$M /LO K 4O! .7T SE$LIN+ M$ HINE MOTO!7$ +E$!ED MOTO! 4O! "" O#E! SE$LIN+ M3 TIME!7S"E I$L T%"E 4O! .7T #ET!OD SE$LIN+ M3 . $"$ ITO! &8)M4D6 ,*)# D 7 9#ET!OD M3 : +.IDE $SSEM/L% .NIT 5ITHO.T S"INDLE6 5ITH $LL S !E5S DIE $SSEM/L% 4O! S5$+IN+ M3 & , & &(> & 2 , &() & 2 && & & ( & & , , ( & 2 > , & 2 2 & &&) , & 2 &)) & &)) , &)) * , * 8 &= = ( ' 2 2 2 & ( & &>&& ='(8 (=22 &)>2 &(8* =>> (&&8 ')>= 2'(8 ==,) (*>,>.( 2)*>2 &82*) =2)) 28)) &2)=,.= ('*) ,=)) ()() 22) &=) ')2>(.&' '*8'>.'( (&(* &&'* 2)) 2=8 (('* 2>* 2>)) (>) &8)8.* ,) 8*) '2)) &&=,* 82, =(.2& 22>=.* ,2 ( &8*>> ()2, 28) *) =')2 &*&=.'& &>2.8 &>'8 &&=,* ) ) ) & ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) & ) ) ) ) & ) ) & ) ) & 2 & ) ) ) 2 ) * &&* ) ) & 2 ) ) ) ) )
>) >& >2 >( >, >* >8 >' >= >> &))
&)& &)2 &)( &), &)* &)8 &)' &)= &)> &&) &&& &&2 &&( &&, &&* &&8 &&' &&= &&> &2) &2& &22 &2( &2, &2* &28 &2' &2= &2> &() &(& &(2 &(( &(, &(* &(8 &(' &(= &(>
53

'&)))())() '&)))()),) '&))),)))) '&)))')))) '&)))=)))) '&))&)))&) '&))&)))2) '&))&))),) '&))&)))*) '&))&)&))) '&))&)&)&) 5I!E +.IDE $SSEM/L%;4O! .7T 5INDIN+ M3 +.IDE! $SSEM/L%; 4O! .7T 5INDIN+ M3 HE$TIN+ ELEMENT 4O! IM"L.S HE$T SE$LIN+ M$ HINE H (&& 7&82)8 !E TI4IE! 4O! SE$LIN+ M$ HINE MODEL &* M+ &E, 5 -&8&7 ,'(1 4I0T.!E7$SSEM/L% 4I0T.!E SET 4O! .7T THE!MO O."LE 4O! T D 4O!MIN+ INHE TION MO.LDIN+ M3 THE!MO O."LE 4O! "L.N+E! 4O!MIN+ INHE TION MO.LDIN+ M3 DME EJector side Spring 4or =7 caKity Tee MouLd /L$ K < 5HITE TELE#ISION !IN+ HE K #$L.E ,) NI "$!T NO; 2=)=.()).)&,) !. ". SET 4O! "L.N+E! 4O!MIN+ M$ HINE 9"# : 2 2 2 2 ( & , ( & & & &>=* &2,= (('.* &2)) &2)) ,*>.>& ,*>.>& 2*, '== (,2&,.(, ()*2.>2 ) ) ) ) ) ) ) & ) ) )
&,) &,& &,2 &,( &,, &,* &,8 &,' &,= &,> &*)
!he E)P of @<< items of spares are al ulated and out of "hi h :@< items are sho"n in the !a&le @ for referen e. !he E)P is al ulated "ith the help of $nnual onsumption, unit pri e "hi h is olle ted from the I! department. !he pro urement ost is given &y the Finan e department
Ca'cu'a"i,! ,- M,!&0 :',c5&* i! N,! $, i!( +#ar&+

!he ex ess of money &lo #ed in the non moving spares is identified using aging analysis. !he age "ise analysis is done using the sto # in hand, its value, num&er of days and thus the money &lo #ed &y this spares. !he age "ise analysis is simple and an &e done only "ith the help of stores department. Ta:'& < .Ca'cu'a"i,! ,- $,!&0 :',c5&*
F) : 5 7 6 3 4 ; :< Item 9ode B7<<5<<<:< B7<<5<<<5< B7<<5::<<< B7<<5::<:< B7<<5::<7< B7<<5::<6< B7<<5::<@< B7<<5::<3< Item Fame -9(EW F)( .ELLE!IKE( 'S9 0$((EL F)( .ELLE!IKE( 'S9 0E$(IFG 0$LL 35:4%K Y.ELE!IKE([ 0E$(IFG 0$LL 37:<%K Y.ELE!IKE([ 0E$(IFG -.HE(I9$L ()LLE( 555<B Y.ELE!IK 0E$(IFG -.HE(I9$L ()LLE( !H(C-! 5;6:@ Y. 1 0EL! 9%4@ Y.ELE!IKE([ HE$!E( FL$! -!(I. :B< '' Z 4< '' ^ F)( . C)' P!? 8ays F)F)F)F)F)F)F)F): : 4 3 6 6 B @ 564: 564: 7B3: 775; 5<73 7B65 564@ :;@@ 'onths 45 45 :56 :<; 3B :57 45 36 1alue in (s 4@66@ 3;@BB :;@@5 6<3; @7<@ 745B5 ::75 B4<
54

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
55

-WI!9H '-) D 5@ Y-HEE @3 37 36 3@ 34 3; B< B: B5 B7 B6 44 4; ;< ;: ;5 ;7 ;6 ;@ ;3 ;B B7<<3<<<:< B7<<3<<<5< B7<<3<<:4< B7<<3<<5<< B7<<3<<56< B7<<3<<53< B7<<3<<7<< B7<<3<<7:< B7<<3<<75< B7<<3<<77< B7<<3<<7B< B7<<3<<74< B7<<3<<7;< B7<<3<<6<< B7<<3<<6:< B7<<3<<65< B7<<3<<67< B7<<3<<64< B7<<3:4<:< B7<<3@5<<< B7<<3@5<:< -WI!9H % '$GFE!I9 -WI!9H '-) D :< Y-HEE! .L9 IF.C! S )C!.C! .)(! E$ 55 <35< % 6 -EF-)(%ELE9!()FI9 .()ZI'I!? -EF-)( WEL8I -EF-)(%ELE9!()FI9 .()ZI'I!? -EF-)( WEL8I .)!EF!I)'E!E( .7 (5D5 , LIF 8( GEWCF8.) .)!EF!I)'E!E( :<D : !C(F FI..LE .$(! F)2 --%<@<:% <<5 .)-: F)( HF 9)IL%-)LEF)I8 9)IL F)( 'FH%7%:S4 -)LEF)I ')!)( % $9 ')!)( F)( LIFE$( IF8EZIFG -? .()ZI'I!? -EF-)(- F)( )L8 HF WEL8IFG 'S -.$(E F)( )L8 HF WEL8IFG 'S9 !?.E2 9$0% : 8)C0LE $9!IFG 9?LIF8E( F)( )L8 HF WEL8IF 8)C0LE $9!IFG 9?LIF8E( F)( )L8 HF WEL8I 8)C0LE $9!IFG 9?LIF8E( F)( )L8 HF WEL8IF 8)C0LE $9!IFG 9?LIF8E( E'GP'%75%:@ 9)F!$9! :5;:; (6F56;) HF WEL8IFG '$9HIFE 9)F!$9! 5<@B: HF WEL8IFG '$9HIFE. 'IFI 9)F!$9!)(, ..F L.6%D<3<: 0W5 F)( FE 9I(9CI! 0(E$DE( - 5B5 D 3 $ Y H.F. WEL8 9I(9CI! 0(E$DE( ' % 5@ !' % 6 (.@:3@ Y H 9$.$9I!)(%LE$8 !H()CGH 9$.$9I!)( F)F)F)F)F)F)F)F)F)F)F)F)F)F)F)F).D! F)F)F)F)5 5 3 @ 5 6 :< 5 : B : 5 5 : 5 @ 3 5 : : 7 5B3; 5355 :B<7 5B3; :3<4 :5<6 5BB6 ::B3 :33: :B<7 :46: :47; :@53 :B<7 :@6< :5<6 5:;5 5747 :33: :33: :B3B ;: 43 @3 ;: @7 6< ;: 7; @@ @3 3: 3< @< @3 @: 6< B5 B4 @@ @@ @4 ;B<@ 4:5:@ :B4<3 :33B3 56 3< @:<B3 B;4 :67< 35;< @;7 373< :;3B< 57<6 :;3B< BB 3@<< 54;B 45 B6 :<;;
56

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57

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!he 5;6 spares "hi h are identified as non moving spares in the F-F analysis is ta#en to al ulate the money &lo #ed in the non moving spares. !he al ulation sho"s that around (s 5:7@56< is &eing &lo #ed in the non moving spares. !his sho"s the need of an effe tive and effi ient -pare parts management in the organi,ation. -o more are has to &e ta#en in the ase of reorder level of the ma hine spares
5!
FISH%ONE DIA4RAM Csing the fish&one diagram the reasons ontri&uting to ex ess num&er of spares and money &lo #ed "ere identified. !he reasons "ere analy,ed in dis ussion "ith on erned employees and exe utives.
Fi( 1-Fi+h :,!& *ia(ra$
.ur hase
Lead time La # of monitoring
'en
La # of proper training Fon Fon indegenous $vaila&ility of -pares 'at hing parts .ur hase of (e ommended spares la # of inventory planning La # of 8ata analysis La # of Experien e
'onitoring of *uality In spares Ex ess inventory Inventory 'gmt te hni*ues
Effe tive implementation of ma hine s hedule 'aintenan e pro&lem 8upli ation of item 9ode 'a hine &rea#do"n
Ex ess of money &lo #ed
'onitoring the deterioration )f spares
$vaila&ility of data on ma hine failure
'ethod
6"
'a hine
!he ma/or auses of the pro&lem an &e &roadly in luded in the follo"ing ategory 'en .ur hase 'ethod 'a hine
From among the a&ove possi&le auses sho"n in the fish &one diagram, the ompany is li#ely to &e affe ted &y the follo"ing reason. Fon indigenous spares2 % $s most of the ma hines used in the ompany are imported from foreign ountries, the spares are also not indigenous. -o the department tends to pur hase a large num&er of spares if the &rea# do"n o urs. La # of inventory planning2 % !he responsi&le departments are not a"are of any inventory ontrol methods and te hni*ues that are availa&le to properly ontrol the ex ess inventory. La # of training2 % !hose "or#ers "ho are operating the ma hine are not trained in routine maintenan e management and the exe utives are not trained in proper management. 'onitoring of *uality of spares2 % !he *uality of spares is not fre*uently monitored and some times spares had to &e ordered again or "ill &e in store. $ppli ation of Inventory management te hni*ues2 % !he inventory management te hni*ues li#e $09, 1E8, F-F, H'L et status of spares. 8upli ation of odes2% !he item ode of spares an &e dupli ated and thus ex ess of items "ill &e ordered even if the same item is there in the sto #. 'a hine &rea#do"n2% 8ue to the non availa&ility of data regarding the fre*uen y of ma hine &rea#do"n. 8ata regarding ma hine &rea#do"n or repla ement of spares are not #ept for analysis and proper planning of spares. an &e arried out to find out the
61
A study on Spare parts Management at HLL $ll the spares re ommended &y the suppliers of the ma hinery are pur hased "ithout due analysis of re*uirement &ased on pro&a&ility of failure.
CHAPTER-<
FINDIN4S
62
= FINDIN4S !he 1E8 $nalysis sho"s that among @<< spares, ::3 items are 1ital, 536 are Essential and :5< items are 8esira&le !he $09 $nalysis sho"s that among @<< spares, 55 items are under the 9lass $, @@ under 0 and 657 items under 9lass 9 !he F-F $nalysis sho"s that among @<< spares, 5;6 items are non moving and the rest 5<3 items in ludes -lo" and Fast moving spares. !he inventory ontrol parameters li#e ()L and E)P is fixed for the same @<< items of spares. !he study reveals that (s 5:7@56< are &eing &lo #ed &y the Fon moving -pares.
!he main reasons for a umulation of spares under slo" moving and non moving ategory are found to &e2 La # of inventory planning and monitoring of spares. .ur hase of spares re ommended &y suppliers "ithout proper analysis of re*uirement &ased on pro&a&ility of failure. (e ord of ma hine failures is not #ept. 8upli ation of spare odes. La # of training in maintenan e management for operators and inventory management fro exe utives.
63
CHAPTER-6 SU44ESTIONS, RECOMMENDATIONS AND CONCLUSIONS
64
6.1 SU44ESTIONS a!* RECOMMENDATIONS !he ma/or pro&lem identified in the ontext of -pares part 'anagement is that a large amount of money is &lo #ed &y the ex ess inventory of Fon moving spares. -o the suggestions in lude2 . !he spares that are useful for the other units of HLL an &e identified from the ex ess inventory and an &e given for their use. !he *uality of spares &eyond @ years may &e he #ed out. If unsuita&le, they may &e disposed off. !he possi&ility of salvaging the s rap may &e examined. !he lassifi ation and analysis may &e done on all the other remaining spares. 8etailed analysis of the ex ess inventory may &e done and effe tive inventory planning and monitoring systems may &e implemented. (e*uirement of spares may &e estimated &ased on analysis of pro&a&ility of failure prior to pur hase. .roper training in maintenan e may &e provided to operators and inventory management te hni*ues to exe utives. $ll the spare odes may &e examined to identify dupli ation,
65
6.2 CONCLUSION -pare parts management is the most important and dynami area of 'aterials and Inventory 'anagement re*uiring a high degree of attention. !he study of ma hine spare parts at HLL reveals the extent of ex ess spares, money &lo #ed in it and also the reasons there of. !he resear her ould get the exposure to the pra ti al issues in the spare parts management. !he findings derived out of the study thro"s light on the need for improving inventory planning, monitoring, training of employees and effe tive de isions on pur hase of spares. It is also re ommended that the study an &e extended to all the other spares. . It is unli#ely that all theoreti al pro&lems of spare parts management "ill ever have omplete solution. $ny ontrol system to &e introdu ed and degree of su ess to &e attained o&viously depends upon the initiative, ulture of the organi,ation, inter%relations among the different departments in the form of ooperation and oordination. !he organi,ation should have enthusiasm to hange things, "hen they need to &e hanged, "hen they annot &e hanged..
66
%I%ILO4RAPHY
(eu&en (oy, HStores Management#( Himalaya .u&lishing 9ompany2 Fe" 8elhi% First Edition :;;B) $.D.8atta, HMateria$s Management , In%entory &ontro$ and Logisti's#( Gai o .u&lishing Home2 Fe" 8elhi%-e ond Edition :;;@) D.-.'enon, HStores ManagementI (' 'illan .u&lishing 9ompany2 Fe" 8elhi% First Edition :;47) (i hard 0 9hase, F (o&ert Ga o&s, Fi holas G $*uilano, Fitin D $gar"al,
H(perations Management for &ompetiti%e ad%antageI ( ' Gra" Hill .u&lishing

9ompany% Fe" 8elhi% Eleventh Edition 5<<3) 0en/amin.-.0lan hard,I Logisti's)*ngineering and ManagementI (.earsons Edu ation% Fe" 8elhi%First Edition 5<<3)
67

Chapter-1: A Study On Spare Parts Management at HLL

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TKM Institute of Management

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!he Indian health are se tor onstitutes2

Gro"th of health are in India

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TKM Institute of Management

'otto, 1ision and 'ission

TKM Institute of Management

)rigin and History

TKM Institute of Management

.rodu tion Fa ility

environment, health and safety poli y to the pu&li .

TKM Institute of Management

TKM Institute of Management

A study on Spare parts Management at HLL

TKM Institute of Management

Ganuary 8emand @< .rodu e :<< 'onth%end inventory @<

Fe&ruary @< :<< :<<

'ar h $pril < :<< :<< :<< 5<< 5<<

'ay 5<< :<< :<<

Gune 5<< :<< <

TKM Institute of Management

TKM Institute of Management

A study on Spare parts Management at HLL

alled anti ipation

A study on Spare parts Management at HLL

TKM Institute of Management

TKM Institute of Management

TKM Institute of Management

TKM Institute of Management

$dvantages you need, "hen you need it Lo"er storage osts

TKM Institute of Management

TKM Institute of Management

A study on Spare parts Management at HLL

O%8ECTI1E, SCOPE, METHODOLO4Y AND LIMITATIONS

TKM Institute of Management

TKM Institute of Management

A study on Spare parts Management at HLL

CHAPTER-9 DATA ANALYSIS

TKM Institute of Management

TA%LE 1-1ED A!a'0+i+

TKM Institute of Management

A study on Spare parts Management at HLL

TKM Institute of Management

A study on Spare parts Management at HLL

TKM Institute of Management

A study on Spare parts Management at HLL

TKM Institute of Management

A study on Spare parts Management at HLL

!otal num&er of vital items

!otal num&er of essential items

!otal num&er of desira&le items

TKM Institute of Management

A study on Spare parts Management at HLL

44 0 4; 0 4; 0 ;< 0 ;< 0 ;< 0

TKM Institute of Management

A study on Spare parts Management at HLL

TKM Institute of Management

A study on Spare parts Management at HLL

TKM Institute of Management

A study on Spare parts Management at HLL

TKM Institute of Management

'onitoring of uality In spares Ex ess inventory Inventory 'gmt te hniues