Spare Parts Management in Production & Maintenance

According to a 2017 survey, UK manufacturers were sacrificing some £180 billion of their profits on maintenance costs, and 2018 saw most manufacturers experiencing downtime every 2.5 months, at an average cost of £12,042 for each instance of machine failure or malfunction. This means that many companies may be spending more than £60,000 on annual maintenance, which could approach 6-10% of a manufacturer's gross fixed assets.

On top of this, customer satisfaction is substantially reduced when there are shortfalls on deliveries and quality, costing the supplier a substantial amount in customer churn and putting them at a competitive disadvantage. Adding these indirect costs to anticipated component failures, and including the investment required in short-term replacements, equipment downtime could be costing UK manufacturers upwards of £700 billion a year.

Maintenance expenditure is typically 2%-20% of plant replacement value, depending on the specifics of the industry and operations. This means that every department of the business, including production and maintenance, is put under constant pressure to cut costs and increase profits. Strategic spare parts management is therefore of vital importance, and this depends in its turn on the type of maintenance strategies and management carried out by the business. These strategies commonly fall into three main categories: