10th Annual Replacement Parts Survey: Intelligent Maintenance Best Practices
July 5, 2012
For an accurate reflection of trends in maintenance management and parts and components inventory practices, Food Engineering asks the front-line professionals.
Reliable parts databases with cross references to alternative replacements and a clear understanding of expected performance from premium-priced components: Is that asking too much?
Those are among the best practices in component sources and opportunities for innovation cited by participants in this year’s Replacement Parts and Components Survey, Food Engineering’s annual study that defines current practices, identifies procurement trends and uncovers unfilled needs in food and beverage plants’ maintenance departments.
On-time delivery, reliability and availability of parts, preferably with engineering support, are frequently cited priorities, but readers go considerably further when asked what constitutes best practices. Most of their remarks focus on improvements they would like their suppliers to make, though changes within their own organizations also are advocated. “Involve groups beyond procurement, such as engineering,” one participant writes. Real-time reporting of parts availability at multiple locations in a manufacturer’s network is the promise of asset-management software; some professionals wonder when those systems will deliver. Scheduled preventive maintenance also would be nice, another reader writes.
Standardized parts numbers or, alternatively, databases that cross reference comparable or same-as parts is a practice many would like to see, particularly for commodity components that were not engineered for a specific piece of equipment. Additionally, maintenance professionals want quantitative data on the lifecycle cost of parts. If they are to pay a premium, many argue, they want to know the ROI.
Parts sourcing is not a simple choice between ordering from the OEM or a third-party supplier. Often, the equipment manufacturer is not the OEM for specific components on a machine, and matching the machine builder’s part number to the number assigned to it by the component manufacturer can make parts ordering an ordeal. “Try to find OEM of an actual part, which is often not the equipment OEM, and their lowest-cost vendor,” a flustered maintenance professional writes.
Cross-referenced parts numbers come up repeatedly in answers to a question regarding opportunities for innovation in components management. Predictive failure software is on one respondent’s wish list. Another would like suppliers to build in run-time to failure data with parts numbers to facilitate scheduled maintenance.
Help in reducing inventory levels is a common plea. “One spare part should handle multiple machines,” a reader suggests. And manufacturers with multiple locations clamor for pricing plans that scale discounts based on overall purchases of a given component, rather than treat their plants as separate entities.
“Must be able to download solid 3-D models of parts from the internet,” writes one respondent. An employee at a food company with hundreds of locations offers a number of observations. “Consignment is the latest [innovation] we have seen and been able to take advantage of,” he writes. “The third party owns the inventory on our shelves, and we pay for it at time of use.” He continues with a plea for “corporate involvement in supporting our inventory cost savings [initiatives]. They weigh this too lightly, along with the need for more consistent buying power.”
Value for price paid
Almost half (44 percent) of survey respondents claim they know the ROI from premium parts, and one in six says he or she routinely sources the highest-quality parts to delay mean time to failure and minimize maintenance time, which is in short supply. But an increasing number of food professionals are questioning if purchasing OEM parts can be justified on the basis of superior quality.
Two in five (41 percent) of this year’s survey respondents agree with the statement, “Less-expensive parts work just as well as higher-priced parts,” the highest proportion in the survey’s history and double the ratio in 2008. Only 15 percent purchase OEM parts exclusively, half 2008’s ratio. Conversely, only a third believes cheaper parts do not work as well, down from two in five four years ago. Similarly, only 31 percent say non-OEM replacement parts resulted in premature failures, down from 42 percent in 2008.
The sourcing decision seldom is black or white, with many respondents drawing on past experiences. “We see a blend of parts that work just as well vs. a lower-quality, shorter-life part,” one reader writes. “We use both,” adds another. In-house fabrication is an option, though one respondent cautions, “machine shop replicas fail due to wrong metal used.”
Product quality ranks as the most important of 13 factors when selecting a parts supplier, based on a five-point scale from unimportant to extremely important. Product availability is next, followed by on-time delivery and delivery speed.
Lifecycle costs are frequently factored into equipment purchase decisions, the survey found, and the equation includes replacement parts. One-quarter says the cost of replacement parts always is considered, and 63 percent indicate cost sometimes is considered. Only one in 10 says replacement costs are never a factor.
Plants increasingly are looking to their maintenance personnel to make the call on parts and components decisions. Almost two-thirds say maintenance is involved most of the time, the highest ratio in the survey’s history and 11 points higher than in 2010. Engineering’s role is expanding, though engineers are involved in the majority of decisions at only one in eight plants, about the same as plant operations personnel. Administrators/executive management is lowering its profile, while a small but growing number of plants are sharing responsibility with an outside contractor.
Run-to-failure maintenance approaches are on the wane, with only one in seven readers indicating that is the replacement strategy at his or her plant. Regular visual inspections are the rule at three in five plants, up from less than half in recent years. Time-based replacement is favored at one in eight plants.
Routine visual inspections of parts and machine components are performed at three out of five plants, compared to four out of five in 2011’s survey. This may reflect the growing availability and use of technology, rather than lax practices. Condition-monitoring devices that were unaffordable a decade ago are being used in an increasing number of food and beverage plants.
Almost three in five—58 percent—of readers indicate they use thermal imaging tools to monitor operating temperatures in equipment. Infrared sensors also are used in the majority of plants. Increased use of vibration analyzers, ultrasonic sensors and other devices is reported, including borescope inspections and leak-testing tools.
A strong correlation exists between the use of technology and implementation of cost-cutting programs. Almost half (45 percent) of facilities represented in the study have implemented MRO cost-cutting strategies. At those locations, two-thirds leverage system-generated purchase orders, and one in 12 has a direct data link to its parts suppliers and distributors. At plants where no cost-control strategy exists, only a third makes use of system-generated purchase orders, and one in 33 links up electronically with parts sources. Almost half of the no-MRO-strategy group report no automated ordering system is in place at their plants.
Cost cutting often means removing slow-moving and obsolete parts from inventory and exploiting asset management or computerized maintenance management systems (CMMS) to determine expected performance life of parts and to develop predictive tools. Consignment agreements and supplier partnership are other popular approaches. For multi-plant organizations, cost cuts are being realized by virtual or actual centralized inventories and by quantifying system-wide procurement to get more favorable prices from vendors.
Parts kits for routine maintenance are an old-school MRO inventory practice that appeared to be losing favor but emerged as the most common tactic in this year’s survey. Half of readers indicate they use kits, with vendor-managed inventories (45 percent) and the onsite tool shop (44 percent) to remanufacture parts other common practices. Central warehousing of common parts is used by a third, and consignment systems are in place at one in five sites.
With the growing popularity of Ethernet IP, remote diagnostics of equipment has never been easier. But security concerns make manufacturers reluctant to grant third parties access to their controls networks, despite the reduced downtime and predictive maintenance possible from remote diagnostics. Only one in seven respondents is using supplier-supported remote diagnostics, the same ratio as in last year’s survey and down from 2010’s one-in-five rate. When access is granted, the rationale tends to be for advanced analysis rather than day-to-day operations. The trend is away from relaying the data to maintenance and procurement personnel: Information is shared at three-quarters of respondents’ facilities, down from 94 percent last year and 97 percent in 2010.
Management by walking around was popularized in the 1970s by Hewlett-Packard, and a variation is used to improve inventory management. By eyeballing what is on the parts shelf, managers practice management by looking around (MBLA).
MBLA supplements other measurements, and little change has occurred in the use of those tools over the last decade. Inventory dollar value continues to be the most common inventory measure, with about two-thirds indicating they use it. Turns are the metric at half the plants, while one-quarter relies on the local supply house to track inventory levels.
The tracking tools may not change, but that doesn’t mean organizations are standing pat with their inventory practices. Half of respondents report changes were implemented in the last year, and the likelihood those changes involve bolstering parts inventories is twice as high now as it was two years ago. One-third of those that changed its approach actually increased inventories.
The most common drivers for more parts are downtime concerns, and additional equipment and increased production. “Production volumes continue to rise,” a reader writes. “In order to ensure we can keep the plant equipment operating, we maintain spare parts to make repairs in the middle of the night.”
Identifying must-have parts to boost OEE is implied in many of the comments. “We have become more risk averse,” is one respondent’s simple explanation. Long lead times for replenishment motivates some managers.
Whether they are adding or subtracting parts, all managers want to optimize inventory levels. Insufficient funding for those efforts is cited by 22 percent as the biggest challenge in effecting those efforts, followed by multiple sourcing options (18 percent) and lack of coordination between multiple locations (17 percent). Lack of a searchable database, inconsistent naming conventions for parts and a lack of management continuity are additional challenges.
Online ordering and sourcing of parts and components has matured to become a well-accepted option, with eBay and other general-purpose websites part of the mix for some survey participants. Fewer than one in five readers say they have not used the internet to purchase components in the last six months and do not intend to use it in the next six months, less than half the ratio of six years ago. The websites of both distributors and OEM suppliers were visited by three-fifths in the previous six months, and another 5 percent say they will purchase components online in the next six months. One in seven indicates he or she had sourced parts from general websites.
Survey participants represent a broad array of product manufacturers and plant sizes (see related story on page 20). While the 12 percent that spent less than $100,000 last year on replacement parts and components are a lower proportion than in the two previous parts surveys, mid-sized facilities are better represented than in the past. Average 2011 spending on replacement parts was $1,340,825, the lowest amount since 2008.
About the survey responses
Statistics and comments in this report reflect the input of Food Engineering readers who returned mailed questionnaires or responded to invitations to complete the survey online. Engineers account for one-third of the responses, with plant operations personnel and executive management/general administrators representing 22 and 21 percent, respectively. Maintenance professionals constitute 17 percent, with purchasing, quality assurance and R&D personnel accounting for the remainder.
Three-fifths of respondents work at plants with 100-499 employees. While one in eight is based in a facility with fewer than 100 employees, three in 10 work at plants with 500 or more. Meat, poultry and seafood processing is the primary production focus for one in four respondents, followed by bakery and snack products (12 percent), beverages (10 percent) and frozen and prepared foods (10 percent). Other manufacturing categories include dairy, grain-based foods and shelf-stable products.