Benchmarking project for spare parts inventory: management practices in modern industry
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MSc in International Business
Dublin Business School
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The daily increasing competition within manufacturing industry has placed the new trend on supply chain perspectives. Especially, when they realized that the manufacturing spare parts become the critical factor within the supply chain, the more suitable inventory management practices they adopt, the bigger profit margins they can generate. Therefore the effectiveness of spare parts inventory system can provide a company the abilities to maximize the equipment uptime and increase the productivity as well as reduce the number of transactions associated with spares inventory costs. The Author chose to take the examples of the large size manufacturers in Ireland which are mostly American based global companies. The Author examined the literature on best spare inventory practices with different theories and concepts, for instance, the terms such as Vendor Managed Inventory, information sharing, consignment, Automatic Replenishment, Third Party Logistics and Service Level Agreement, etc. This dissertation is mainly focused on exploring the best inventory practices for managing the manufacturing equipment spare parts, and identifies the actual practices which are preferred by the general companies, and finally to determine the best practice within the industry and how it could help manufacturers to improve their own inventory management program. The results of this study indicate that manufacturing spare parts inventory practices are critically important for those manufacturers expect to maximize the productivity and reducing the inventory costs alongside the supply chain. The results are very positive within the industry, most manufacturers are already or expect to consider the spare inventory issues, and also have implemented the best industrial practices or relevant systems to manage spare inventory.