CAPACITY ASSURANCE STRATEGIES
reducing inventory. To do so, they examine the turnover rate of each part. During this process, internal financial entities often pressure the department to get rid of parts that aren’t turning over quickly. While this approach makes intuitive sense, it is the opposite of what should be done, especially with legacy automation equipment. As availability of legacy parts begins to dry up on suppliers’ shelves, firms that rely on them need to carry extra inventory to counter potential shortages. When they don’t, the result is often less than ideal—some production managers have been known to consider purchasing unverified spare parts on eBay. Allowing a machine’s health and, ultimately, the company’s profitability to depend on someone’s last eBay purchase is not a sound business model. A spare-part-replacement strategy should involve more than just stockpiling parts. It's a process that involves: ■ Calculating the optimal amount of spare parts ■ Determining the condition and supply of the spares ■ Identifying spares of legacy equipment ■ Identifying a trustworthy and timely supplier of legacy spares
Because of the complexity that can be involved in effectively managing spares for legacy equipment, companies sometimes choose to leverage a third party to manage the process. Parts-management programs can help reduce inventory and carrying costs, and can help provide more immediate spare parts availability. This was the case with the City of College Station, TX, when it decided to leverage a vendor-managed parts-management agreement after a recent process-control system upgrade. Since a vendor owns and manages the inventory, College Station is able to budget a monthly fixed cost. Previously, the City’s control system stocked spare parts inventory was about $250,000, but it was able to reduce it to less than $20,000 while also significantly lowering the square-footage required for onsite inventory storage. A resource that understands the intricacies of the process can help ensure that the right parts are in the right place at the right time. 4. Managing obsolescence status… Further complicating risk mitigation is the fact that it’s in a constant state of flux. Within a year or two of conducting a comprehensive audit of the installed base, production facilities often start to discover products that were once active have become discontinued. If risk isn’t being continually assessed, it’s much more likely status changes and threats associated with them will be missed. To prevent the above situation, companies need to establish a process for monitoring life-cycle stages of equipment. This should include developing a database and assigning subject26 |
MAINTENANCE TECHNOLOGY
matter experts within the organization to collect and maintain all life-cycle information. Vendors also can help provide information around life-cycle statuses, parts and service availability and migration recommendations that align with business goals. The bottom line While most facilities agree that better management of automation life cycles is becoming critical, few programs are in existence and most are yet to get off the ground. One reason is that most facilities don’t have the personnel for it. In most cases, there isn’t a role specifically responsible for creating, monitoring and updating a database. Consequently, these tasks are often overlooked. Now is the time to develop a life-cycle strategy for your automation assets (before it’s too late). Lack of resources to invest in dedicated personnel is no excuse for neglecting this process. Enlisting the help of third-party experts can double the benefits of risk mitigation—saving operations the time and money required to train in-house personnel and keeping these resources from being squandered on unnecessary downtime. MT Lonnie Morris is a Senior Manager with Rockwell Automation.
Creating An Obsolescence Plan The overarching goal of obsolescence planning is to quantify risk in order to determine whether it makes more business sense to mitigate through maintenance and support or eliminate it by migrating systems. A phased approach can help ensure risk is addressed effectively and efficiently: ■ Identify. Define the goals and scope of the obsolescence
plan, and develop a strategy for safely collecting data on all legacy equipment. Dedicating qualified resources to creating the plan generally nets the best results. ■ Research. Collect product life-cycle status information
by reviewing manufacturer Websites and notifications, publications, and distributor and reseller information. Identify inventory gaps and orphans by comparing MRO spares versus the installed base and by comparing repair activity with replace activity. ■ Prioritize. Aggregate data to highlight areas of greatest
obsolescence concern. Using that information, design a plan to accept, mitigate and eliminate obsolescence risk. Next, develop a process for gathering ongoing life-cycle status changes for all installed products. For more info, enter 03 at www.MT-freeinfo.com MARCH 2013