Optimal Planning of Store Allocation and Assignment of Spare Parts in a Warehouse

Abstract

Unscientific method of store allocation and assignment of spare parts in warehouse has been one of the major factors that have been causing loss in many companies. To keep pace with the competitors the modern managers are very much aggressive to attain a standard product or service in a minimum cost. The modern managers are very conscious to reduce cost by keeping standard in respect of all aspects which involve better management of workmen, raw materials, spare parts and production output etc. Organizing these functions will require proper guidance, regulation and control so that materials are arranged in such a manner as to enable easy storage, minimized pilferage, proper identification and quick retrievals with minimum waste of time and effort. For this purpose stores location and layout must be considered and the job analysis must be done for the personnel involved to discharge their duties in an effective manner. Management and allocation of spare-parts is a vital problem for sound operation of store. Miss-allocation of spare-parts takes huge time to find parts out. This problem causes extra time consumption and money expenditure for the involvement of labor for long time and also creates risk of unavailability which lead to improper maintenance or repair of machines. So, a standard model for allocation of spare parts in the store is developed in this research. This thesis is an outcome of scientific planning of store allocation and assignment policy for spare parts of the Barge Mounted Power Plant in Bangladesh. The existing policy of spare parts is taken into account for preparing the basis of this thesis. In the existing system scientific policy is not followed. As a result, the plant faces problems in arranging the spare parts in the shelf and also in quick issues/retrievals with minimum waste of time and effort. Materials enter into the Plant as spare parts or as consumable items and are kept in Plant Warehouse which is under Logistics Department. Finally, these are used to produce electricity for national grid. Spare parts and components are utilized for the smooth functioning of production machineries. Total spare parts stock on hand in the Plant is 4,000 approximately in number. Theoretically, the Plant uses the sequence system in arranging all the spare parts in the warehouse shelves i.e. the system calls for the location of items in alphabetical order and numerical order without regard to issue frequency, size, weight or volume (chapter 2). From the past demand, it is seen that the spare parts are required for a scheduled or unscheduled maintenance of a particular part of engine. To repair, to replace or to overhaul always contains a list of spare parts which is mostly similar each time (chapter 3). All these similar parts as required for a particular maintenance, is called family of spare parts (SPF). We have classified all the 4,000 approximately items in 56 SPF. So, if we keep a spare parts family(SPF) which is required as per work order in the same shelf in the warehouse then the issue/retrieve of spare parts will be more easy and less time consuming. In existing system spare parts are not arranged as per family of spare parts. So, the existing system takes much time to issue and retrieve the list of items as per work order (chapter 3) The weight is used to identify each SPF as slow or fast moving. The weight of a SPF is the summation of all item's frequency of usages in a year. By considering weight, higher weight SPF( fast moving) should be kept near to issue counter and less weight (slow moving) SPF is to be placed far from counter (chapter 2). By comparing total transport work and travel distance with the data of year 2007, it is found that for the existing system of 56 engine parts SPF total transport work is 704,097.77 pcs-ft and travel distance is 9,746.43 feet in the year 2007 but if we could arrange the warehouse according to the proposed allocation system total transport work would have been only 168,951.16 pcs-ft and travel distance 4,015.70 feet in year 2007. The net outcome would be the reduction of transport work by 535,146.61 pcs-ft and travel distance by half So, we can say that if we would implement this new system 76% less work per year with respect to present system (chapter 4) could be achieved. Scientific storage allocation system ensures the right material in the right place and serves the user in the most effective manner through the shortest possible distance in the least amount of time. It will increase efficiency and accuracy in receiving process, will increase storage capacity, reduce the level of safety stock by analyzing FSN method. All the data available in the Plant are deterministic. It may change due to the change of any planned and unplanned maintenance.