Food processors are spending less on replacement parts
Report shows that more companies are spending less on replacement parts, but searching for the lowest price is still a low priority for companies.
Food and beverage companies are spending less on replacement parts than they did in the past.
That’s according to Food Engineering’s 2017 Replacement Parts and Components Trends Survey. The report looks at replacement parts purchasing, inventory maintenance, condition monitoring and related topics.
Specifically, it found that about half of food and beverage companies (52 percent) spent less than $100,000 on replacement parts in 2016, which is up from 48 percent in 2015 and 32 percent in 2014.
The report also found that mean spending on replacement parts was $632,416, and the median spending was $75,000.
Food Engineering Magazine and its parent company BNP Media’s Market Research Division conducted the Replacement Parts and Components Trends study in an effort to provide detailed information on the latest methods to improve efficiency in replacement parts and components.
The key objectives for this study were to identify:
- The type of job functions involved in replacement parts and components decisions
- Information about replacement parts and components that industry professionals rely on
- The most important factors when selecting a supplier
- The maintenance replacement strategies and inventory management practices that are currently utilized.
The full report can be purchased at www.clearmarkettrends.com, but below is a look at some of the most noteworthy findings.
For starters, the maintenance department is most likely to be involved in making the decisions for replacement parts and components.
Specifically, 31 percent of respondents say maintenance personnel at their company are mostly involved in maintenance decisions, followed by 20 percent reporting general administration/executive management are responsible; 18 percent identify plant operations, and 17 percent say the engineering department makes the decisions.
When it comes to which strategies are most commonly used when deciding to replace parts, more than half of the companies surveyed (55 percent) say they implement regularly scheduled visual inspections as their maintenance replacement strategy. About a quarter (24 percent) say their strategy is more along the lines of, “When it breaks, then replace it,” and 10 percent say they rely on time-based parts replacement schedules for deciding when to replace things.
Only 1 percent of respondents say they use automated measuring and monitoring of parts and components to determine when to replace items. But interestingly, respondents see using more automation as offering the most opportunity for improvements to their parts and components management. So perhaps, this area of plant management is ripest for increased automation in the coming years.
Nearly half of respondents (47 percent) see the value of purchasing more expensive and higher-quality replacement parts to ensure a better ROI. However, 34 percent say price is the determining factor when looking for replacements, while 14 say that “manpower shortages force us to specify the highest-quality available parts to prolong mean time to failure.”
Among respondents who use non-OEM parts, 43 percent say the less expensive parts do not work as well as higher-priced parts, and 32 percent report they experienced premature machine failures as a result of using less expensive parts. And 17 percent say they might have received parts that were counterfeit. On the flip side, 28 percent say less expensive parts work just as well as the higher-priced ones.
As for how companies look for suppliers, 94 percent of respondents say that product availability is an important characteristic when selecting a supplier, followed by 93 percent who say product quality is important, 89 percent who say on-time delivery is important, and 88 percent who say value for price paid is important. Three-fourths (75 percent) say technical service support is important, 67 percent say company reputation, and 63 percent say product warranty is king.
Only 39 percent say the lowest price is important, and only 37 percent of respondents say that suppliers who offer electronic ordering and order tracking is important.
However, 61 percent of respondents do use automation when it comes to ordering replacement parts, with CMMS being the most preferred method (21 percent), followed by 16 percent who prefer standardized hard copy purchase orders and 15 percent who prefer system-generated purchase orders.
Two-thirds of respondents (67 percent) have not made any changes to their inventory practices in the past year, while 19 percent say they are reducing their replacement parts inventory, and 14 percent say they are increasing their replacement parts inventory.
About two out of five respondents’ organizations have implemented an MRO cost-cutting strategy, with the two most popular methods being inventory management and creating contracts with suppliers.
Two-thirds track inventory dollar value to improve inventory management, while half track turns. Respondents say the greatest challenges to their being able to minimize their replacement parts inventory is largely due to multiple sourcing options for ordering parts. One respondent says because their plant has such a great diversity of equipment with few interchangeable parts, it poses a problem to keeping parts inventory down. Having insufficient funds is also cited as an obstacle to minimizing parts efforts.
As mentioned earlier, respondents who think there are more opportunities to innovate their parts and component management say the best way to do that would be to use more automation and computerized systems. Also, a number of respondents think they could do a better job of inventory management by collecting more data and analyzing it.
Please visit www.clearmarkettrends.com to purchase and download the entire report as well as access a wide inventory of other studies done in this industry. You can also email firstname.lastname@example.org with any questions.