Criticality analysis of spare parts management: a multi-criteria classification regarding a cross-plant central warehouse strategy

Today an efficient warehouse and inventory management of spare parts for production machinery is essential for service organizations. Optimal strategies in procurement, stocking and supply play an important role for serviceability in spare parts management. In this context, individual item criticality should be considered, which describes how crucial a spare part is. This paper presents a three-dimensional classification approach for spare parts regarding a cross-plant central warehouse strategy of a service network. The approach uses two dimensions to estimate value and predictability of spare parts with aid of an ABC and XYZ analysis. The third dimension VED analyses a multi-criteria criticality classification and six feasible criteria are identified to describe item criticality. The methodology of the analysis is based on a decision tree, which represents the defined criteria by nodes. In addition, the analytic hierarchy process is used to solve the multi-criteria decision problems at the different nodes of the decision tree. The approach is developed in a research project and evaluation of spare parts is performed based on real inventory and transaction data in cooperation with an industrial company. As a result 15,000 out of 50,000 items could be classified as suitable for central warehousing.