optimized planning of repairable & consumable parts inventory
DESCRIPTION
The MRO supply chain planning process that controls the flow of repairable parts is more complex and challenging than planning consumable parts. In this two-way supply chain, there are several key points that must be managed: • Ensure that new parts are not ordered to replace parts that are out for repair • Decide when to purchase replacement parts • Decide when to scrap parts • Manage the combined MRO planning and purchasing process • Average the value of both new and repaired parts kept in stock In this presentation, Syncron provides insight on how to plan and manage both consumable and MRO parts. This presentation is based on a case study of the German railway operator, Deutsche Bahn AG, outlining their processes and how they are optimizing spare parts inventory.TRANSCRIPT
Webinar June 25th, 2013
Optimized Planning of Repairable Parts Inventory
Ulrika OlssonPhone: +49 173 710 90 [email protected] Syncron International ABPostfach 14 03 2940073 Düsseldorf, Germanywww.syncron.com
Nicole HeinzePhone:+46 709 822 [email protected] Syncron International ABÅngbåtsbron 1SE-20123 Malmö, Swedenwww.syncron.com
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Table of contents
• Introduction
• Repairable Parts – Background
• Project ODIN Deutsche Bahn
• Closing words / Q&A
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About Syncron
• We deliver solutions for optimize joint pricing and supply chain performance, easily.
• Our customers are multinational companies in manufacturing and distribution.
• We have active users in more than 90 countries around the world.
• Our customers are supported on every time zone by offices located in:
– America Chicago & Atlanta
– Europe Birmingham, Düsseldorf,
Malmö, Stockholm (HQ) &
Warsaw
– Asia Tokyo
Some Partners
Awarded 3 consecutive years
Awarded 5 consecutive years
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We are trusted by leading global companies
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Syncron product footprint
Right stock in the right amount at the right place at the right time
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One Integrated Suite for Global Inventory Management
ManagementReporting
ReplenishmentPlanning
DemandForecasting
GlobalPlanning
Life cycleManagement
SeasonalityAnalysis
StatisticalForecasting
Forecast Alerts
Forecast Adjustments
Market Knowledge
InventoryOptimisation
StockReplenishment
InventorySimulation
OrderScheduling
Rotables Planning
InventoryAlerts
Supply Chain Visibility
VirtualPlanning
Buy Back Ordering
StockRedistribution
StockAllocation
Multi-EchelonOptimization
Key Performance Indicators
SystemConsole
EmbeddedAnalytics
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Table of contents
• Introduction
• Repairable Parts – Background
• Project ODIN Deutsche Bahn
• Closing words / Q&A
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Supply Chain for Durable Goods and Spare Parts
• Dependent demand is influenced by new product introduction, marketingcampaigns, economy, etc
• Make or buy
• Forward logistics process
SupplierCustomerDistributions
CenterPlant
Durable Goods
Plant
Supplier
Repair Facility
Central Warehouse
Stock Location
Stock Location
Stock
Stock
Stock
Stock
Installed Base of
Customers, Service
Providers or Service Engineers
Local stocking locations
Regional stocking locations
Spare Parts
• Erratic and independent as well as dependent demand due to unscheduled maintenance and repairs
• Multiple sources of supply such as make or buy, overhaul, repair and alternative items
• Forward and reverse logistics processes
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Where, when and how to source required inventory
• The customer demand for spare parts can be fulfilled by either:
– Repairing a broken item in the repair workshop at a repair lead time
– Purchase a new item from an external supplier at a purchase lead time
• Repairable parts are sometimes scrapped, this takes place either when customers buy new items or when the items are being repaired
• In the repairable parts case we need to take different lead times, return and repair efficiency as well as availability of items that can be repaired into account
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Table of contents
• Introduction
• Repairable Parts – Background
• Project ODIN Deutsche Bahn
• Closing words / Q&A
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Project ODINGlobal Inventory Management at DB AG
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OBJECTIVES
Realization of individual levels of availability
Improved demand forecast
Daily calculated parameters for distribution (based on forecast, lead time, service-level, order quantity) for approx. 1 mio. SKU*
Optimization of stock balance by rule-based redistribution
Virtual central warehouse
*) stock keeping unit
The tasks of an optimized spare parts planning can be achieved by modern tools
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DB SPECIFIC SUPPLY CHAIN
GIM supports the core elements of our supply chain
purch.requisitio
n
"Materialdisposition" ("distribution & supply) w/ DB Fahrzeuginstandhaltung
Stock management
purchaseorder
procurement & delivery
parameter
calculation
stockmanage-
ment
incoming
ordersforecast
supplymonitori
ng
ordersuggest
demandhistoryAND/ORmanualdemandplanning/reservations
statistic based forecast
to support manualdemand planning
Optimized buffer stock and order level. Updated
monthly for~1 mio. SKU
Rule based redistribution
proposal;optimized order
quantity
Warning in case of runout, changes in demand structure,
etc.
at start:manual check of
all orders by planners
GIM s u p p o r t
T.WVM 1, 11.06.13
The new software has been integrated into the existingIT-landscape
SYSTEMS
R/3K Host
R/3-LVS
R/3 AAR
DB Network
R/3 ISI
"Klick-Shop"
to come:PLS
Changes to material master dataRegistered movementsStock levelOpen PO ordersContracts (Supplier agreements)
Accepted orders /redistribution orders
Order proposalsOpen reservationsOpen repair orders
GIM/"ODIN"
KLÜ MBP
T.WVM 1, 11.06.13
DB SPECIFIC SUPPLY CHAIN
purch.requisition
"Materialdisposition" ("distribution & supply) w/ DB Fahrzeuginstandhaltung
Stock management
purchaseorder
procurement & delivery
parametercalculation
stockmanage-ment
incomingorders
forecastsupplymonitoring
ordersuggest
demandhistoryAND/ORmanualdemandplanning/reservations
GIM system forecast+DB specific planningtotal forecast
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Items are classified into different demand types – individual forecasts & levels for availability are calculated
Lumpy Slow
ErraticFast Negative Trend
New Dying Obsolete
Positive Trend
DEMAND TYPES
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Manual demand planning has been established beforeusing specific adjusted specific demands per vehicle & event
FZI
Werk SAP# Menge Monat1312 1232456 1 01.101312 1232456 1 02.10
…1312 345728 5 01.10
Result (updated monthly)
shown in SAP
but no automatic processing
drill down of BOMfor rotables secondary demands
WorkshopLong Distancetrains
Regio SCHENKERRAIL
FZIRevision
E x t r a p o l a t i o n f o r p r i m a r y d e m a n d s :
TOTAL OF ROTABLES
based onkilometers per fleet
based on plannedmaintenance events
per vehicleseasonal demands
based on plannedmaintenance events
per vehicleseasonal demands
only availablefor DB as a whole
based on plannedmaintenance events
i.e. number of revisions
PURCHASE PARTS
T.WVM 1, 11.06.13
DB SPECIFIC SUPPLY CHAIN
purch.requisition
"Materialdisposition" ("distribution & supply) w/ DB Fahrzeuginstandhaltung
Stock management
purchaseorder
procurement & delivery
parametercalculation
stockmanage-ment
incomingorders
forecastsupplymonitoring
ordersuggest
demandhistoryAND/ORmanualdemandplanning/reservations
service level
buffer stock
order level
T.WVM 1, 11.06.13
Spare parts are classified depending on number of picks and valueof annual usage
STRATEGIC MATRIX PER WAREHOUSE OR CLASS OF PARTS
23
T.WVM 1, 11.06.13
DB SPECIFIC SUPPLY CHAIN
purch.requisition
"Materialdisposition" ("distribution & supply) w/ DB Fahrzeuginstandhaltung
Stock management
purchaseorder
procurement & delivery
parametercalculation
stockmanage-ment
incomingorders
forecastsupplymonitoring
ordersuggest
demandhistoryAND/ORmanualdemandplanning/reservations
daily check:
stock levelvs.
order level
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Standard principles applies for all spares
• Redistribution is used to balance excess stock in warehouse with shortfalls in other warehouses
• Virtual planning can be used for efficient management of slow
moving items in specific regions
T.WVM 1, 11.06.13
DB SPECIFIC SUPPLY CHAIN
purch.requisition
"Materialdisposition" ("distribution & supply) w/ DB Fahrzeuginstandhaltung
Stock management
purchaseorder
procurement & delivery
parametercalculation
stockmanage-ment
incomingorders
forecastsupplymonitoring
ordersuggest
demandhistoryAND/ORmanualdemandplanning/reservations
Order quantity
Daily orders
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Integrated view of all Recommended Orders
Indication for different order types
Reparable item icon
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Repairable Parts Pop-up
New or repaired parts info Defective parts info
Supplier info Repair workshop info
Scrap rates
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Stock Details Pop-up
Stock information during the supplier and workshop lead times respectively
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Stock Details Pop-up, contd.
Prediction of total stock
Prediction of serviceable stock
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System console – Summarized view of your spares
Summarized view of the status of all
your items
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Table of contents
• Introduction
• Repairable Parts – Background
• Project ODIN Deutsche Bahn
• Closing words / Q&A
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Interested in more information?
• Read & Download:
– Spare parts inventory optimisation is vital for high rail fleet operational availabilitywww.syncron.com -> Resources -> Articles
– Deutsche Bahn AG case studywww.syncron.com -> Resources -> Success Stories
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End of presentation / Q&A
Thank you for Your attention !
Syncron International ABPostfach 14 03 2940073 Düsseldorf, Germany
[email protected]: +49 173 710 90 04www.syncron.com
Ulrika Olsson
Syncron International ABÅngbåtsbron 1SE-20 123 Malmö, Sweden
[email protected]+46 709 822 228www.syncron.com
Nicole Heinze