Replacement Parts and Components Trends Survey
If you are still debating the value of a sound spare parts program, exercise this piece of logic on company executives: Improving your processing plant’s uptime is like adding capacity without capital investment.
Money and time invested in downtime prevention comes back to your company and plant as productivity gain. And having parts when you need them is critical to keeping production lines running. An effective maintenance and repair operations (MRO) function can improve the quality of manufacturing as well, delivering better product at higher levels of output and with less waste.
Maintenance pundits have preached this simple wisdom for decades. Model maintenance programs have transformed an entire organization’s view of production and compelled the inclusion of quality and uptime into the manufacturing equation. Unfortunately, such programs have yet to reach everyone. Some have even vanished during a changing of the guard or badly handled austerity effort.
Our survey hints that some companies still have parts strategies left over from the covered wagon era. For example, when asked which statement best described the maintenance replacement strategy at your plant, 26 percent of Food Engineering’s survey respondents answered “when it breaks, then replace it.” Another 56 percent claimed they made regularly scheduled visual inspections to determine wear and need for replacement. Only 12 percent replied that their organizations had time-based part replacement schedules. Three percent had a volume-based replacement schedule. Another three percent had automated measuring and monitoring of parts and components capabilities.
“The mantra for the last five years has been better equipment reliability,” said Steve Bing, formerly manager of business engineering for Kraft Foods, Northfield, Ill. What has happened to this commitment? Has the chase for operational effectiveness and cost control run out of gas?
Probably not. The volume of parts purchased by the companies in our survey varied significantly, with 63 percent purchasing under $1 million in replacement parts and components annually; 27 percent purchasing between $1 million and $3 million; and 10 percent mounting annual purchases of $3 million or more. More likely, smaller processing firms represented in our survey may not feel they buy enough parts to make extensive maintenance and parts replacement strategies cost-effective. Or priorities within the company or processing facility have not yet moved into the maintenance/parts replacement arena.
But, off the record, operations executives have speculated that major cuts in the maintenance function may have robbed some initiatives of their steam. One executive even speculated that food safety initiatives at some organizations have taken attention from other operations initiatives.
Maintenance personnel are involved in the majority of maintenance decisions involving replacement parts and components at 84 percent of the responding companies. Engineers, at 60 percent, comprised the next highest group; plant operations a close third at 57 percent. (See chart above.)
Determining need for replacement parts and components is a widespread responsibility, with maintenance, plant operations, and engineering carrying most of the load, followed by much smaller participation from general administration/ executive management, QA/QC personnel and R&D.
According to our survey, over half of food plant maintenance personnel have the greatest hand in placing the order, and nearly three-quarters recommend or evaluate brands/models. Others involved in brand/model recommendation and evaluation included engineering (68 percent) and plant operations (47 percent). By and large, engineers determined product specification, though maintenance personnel, plant operations personnel and R&D personnel also claimed involvement in spec decisions.
Approval for replacement parts and components may be widely spread across an organization. According to our survey respondents, 61 percent of general administration/executive managers are involved. But 45 percent of plant operations, 45 percent of maintenance, 47 percent of engineers and 25 percent of purchasing personnel partake in such decisions as well. Purchasing and maintenance personnel are most likely to place parts orders, followed by engineers and plant operations.
A little more than half of the survey respondents claimed to purchase identical parts and components from the original (equipment) manufacturer. That left 47 percent to purchase compatible parts and components from a different manufacturer.
Net makes little gain
The Internet offers unprecedented convenience in gaining information on equipment and parts and purchasing those components and parts. Cutting costs from the supply chain remains a dominant theme in operations initiatives, including MRO strategies. Forward-thinking companies with multiple manufacturing sites and huge parts requirements have discovered enormous efficiencies in cataloguing all parts and components for electronic procurement and executing those purchases via the Internet.
But our survey indicates that using the Internet for parts purchasing is not yet common practice. Only 27 percent of survey respondents claim that their company had purchased replacement parts and components from manufacturers via the Internet over the past six months and only 14 percent from a distributor’s web site. Surprisingly, nearly half of our respondents had not purchased any parts or components via the Internet over the previous six months and did not expect to do so in the next six months. Similarly, only 23 percent of respondents regarded electronic ordering and order tracking extremely or very important in selecting a supplier.
The need for speed
What characteristics, then, do plant personnel with part/ component replacement responsibilities value most when selecting a supplier of parts and components?
Rapid turnaround and delivery of the order is clearly an important criterion. In fact, 92 percent of survey respondents indicated that they would go to an alternative source to purchase parts if they did not receive the specific product from the manufacturer within an acceptable period of time.
On-time delivery – Next to product quality, on-time delivery is the most important attribute of a parts supplier. Parts replacement should be quick in virtually every operations context. In fact, 98 percent of survey respondents rated on-time delivery as extremely important or very important in their selection of a supplier.
Speed of delivery – Urgent demand can render the term “on-time delivery” meaningless. At key moments, “right now” and “as soon as possible” are the only delivery terms that matter. Forty-four percent of survey respondents identified speed of delivery as extremely important while 51 percent called it very important.
Product quality –The quality of a replacement part could determine the quality and output of finished product. An equipment manufacturer’s designed part is generally the preferred option. But some leading food companies have admitted the occasional need to accept a substitute of lesser quality in the interest of time or as part of a general agreement with a spare parts supplier hired to take care of all replacement parts and components for a manufacturing facility. Getting the highest quality part for a function of limited importance or consequence can be overkill in some situations.
Value for price paid – Whether they get what they wanted or not, our respondents certainly want to get their money’s worth. Eight-four percent ranked value for price as extremely or very important. In the parts realm, lowest price is not likely a supplier’s best point of entry. Only 13 percent of respondents described lowest price as extremely important with 22 percent regarding it as very important.
Company reputation and relationship with company – Peace of mind, on the other hand, is very significant in parts decisions. While only a quarter of the respondents identified previous relationship with company as extremely important, 52 percent called it very important. Similarly, company reputation drew only a 28 percent extremely important response but a 55 percent very important rating. Read between the lines, and you might conclude that a supplier’s reputation and history with the processor may not be a sufficient reason to purchase parts, but they certainly make the decision easier! u