OPTIMIZING SPARE PARTS BY USING CRITICALITY LEVEL AND REPLENISHMENT POLICY IN OIL AND GAS INDUSTRY

Abstract

Spare part management is a crucial activity in many industries due to the high production loss during downtime caused by a shortage of spare parts. Conversely, a high stock level results in a high value of unproductive capital. This study was conducted in order to reduce spare parts inventory without compromising plant downtime caused by a shortage of spare parts. The DMAIC framework is used to analyze spare parts management problems. This study utilizes the Analytic Hierarchy Process (AHP) to classify spare parts according to their level of criticality. Furthermore, the replenishment policy for each spare part is determined based on the results of the AHP simulation. Proper implementation of this study result can identify the status of spare parts movement and has the potential to reduce inventory value by 25%.