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A steel enterprises spare parts inventory structure optimization method

Author: ZhangHaiLi
Tutor: WangLiPing
School: Zhejiang University of Technology
Course: Project Management
Keywords: Spare parts classification Inventory Structure Inactive inventory Work Breakdown Structure
CLC: F274
Type: Master's thesis
Year: 2013
Downloads: 25
Quote: 0
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Abstract


At the initial-producting stage, steel plant face the problems of unstable facility operation, more equipment failures, the lack of experienced personnel and the unawareness of the facility condition, the spare parts lifetime, the procurement period, etc. In order to manufacturing smoothly and dealing with urgencies, stocking more spare parts is adopted and inventory economy benefit is seldom considered. As a result,7%of floating capital amount of hundreds of millions or billions are used for spare parts stock which causes two problems:(a) A great number of spare parts are becoming inactive inventory, which makes inventory circulation and capital flow slow, and increases stock cost, or even causes scrap loss.(b) Inventory structure is Irrational. The number of each type of spare parts is gradually imbalance and not meet the requirement of site. So urgent plans cause urgent purchase with more cost even failure purchasing in time, further more, greatly reducing the equipment reliability, increasing accident cost even interruption of production. To solve above problems, we should control the spare parts stock, optimize the inventory proportion in accordance with the factory’s characteristics, by decreasing spare parts redundancy and stocking necessary spare parts to ensure smooth production.In this paper, we introduce causes of the high cost and inappropriate structure, analyse spare parts inventory characteristics and usual inventory control methods’ applicability to steel plant with inventory management theory.. At first, we illustrate spare parts stock proportion analysis by spare parts classification from the point of management. Afterwards, considering the total inventory cost, we build inventory structure proportion optimization model unrestrained by inventory capacity and analyse the key factors determination in the model following recommendation. With regard to the model application difficulties, we consider structure analysis, target control and execution in building the model to fulfil closed-loop management and target optimization. Lastly, taking A Iron&Steel Plant spare parts inventory as an example, validation of the model and the closed-loop management method in practical application, summed up a lot of actual management experience, expecting to provide practical references for those iron&steel enterprises who face the same dilemma..

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