Management Journals | Operations Management

The IUP Journal of Operations Management

Inventory Management: Challenges and Optimization of Spare Parts in Indian Power Utilities

Article Details

Pub. Date	: Nov, 2023
Product Name	: The IUP Journal of Operations Management
Product Type	: Article
Product Code	: IJOM031123
Author Name	: Monica Mehrotra and S C Sehgal
Availability	: YES
Subject/Domain	: Management
Download Format	: PDF Format
No. of Pages	: 15

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Abstract

Power utilities operate using complex machinery which necessitate regular maintenance and replacement of failed or worn-out spare parts. Managing spare parts inventory is a challenging task due to the involvement of a vast number of components and failures, which themselves are random and stochastic in nature. No area of material management is beset with as many problems as that of spare parts, the range being enormous. Inventory management is often overlooked despite the abundance of low-value spare parts in comparison to production items, which require large inventory volumes and are vigorously monitored by higher management. This study focuses on the problems related to management of spares, which is the backbone of efficient and effective maintenance management. A proper strategy for spare parts management can help to unlock scarce resources which are otherwise tied up with the surplus items, and at the same time improve equipment availability for operation.

Introduction

Spare parts are inventory items used in maintenance activities to maintain equipment or products in operation. Spare parts inventory management in a power utility is an extensive subject, requiring participation from different departments of the power utility, viz., maintenance experts, maintenance planning, MIS group, procurement group and stores, which may not only be responsible for stores accounting but also proper preservation to avoid deterioration (a natural process whereby materials initially reduce their properties/strength and in the longer run become useless), as many items may lie in stores for years together. This indicates that there are ample possibilities for errors to occur, but it also means that there are numerous opportunities for improvement. Moreover, as the market conditions are rapidly changing, so is the scenario of power sector in the country. Under these challenging conditions, it is imperative to buy spares