Crushing Plant Critical Spare Parts Stock and Reorder Point

Spare parts discussions usually start from the wrong question: should we hold stock or not. Both options cost money, one as tied capital and the other as a stopped plant. The useful question is how many of which item, at what consumption rate and against what lead time. A decision on crushing plant critical spare parts stock and reorder point falls out on its own once those three quantities are set against how long the plant stands still without the part.

Criticality is settled by three questions

Whether an item is critical is decided by consequence, not by price. First: when it fails, does the plant stop completely, does capacity drop, or is the effect only a quality deviation? Second: what is the lead time, and is the item sourced domestically or imported? Third: is consumption steady or sudden? A steadily wearing item can be forecast; a part that fails abruptly can only be described by probability. The three answers place each item into one of four boxes: always held, monitored by reorder point, bought on demand, and never stocked.

How crushing plant critical spare parts stock and reorder point are built

The reorder point is the stock level at which a new order has to be placed, and it has two components: the consumption expected during the lead time, plus safety stock. Expected consumption is simply the average consumption rate multiplied by the lead time. Safety stock absorbs variability and depends on the service level chosen: it is the factor corresponding to that service level, multiplied by the standard deviation of demand and by the square root of the lead time.

A worked example: 4 units a month, three month lead time

Take a wear item consumed at an average of 4 units per month, with a three month lead time and a monthly demand standard deviation of 1.2 units. Expected consumption over the lead time is 12 units, and safety stock varies with the service level chosen.

The lesson in the table is easy to miss. Raising the service level from 90 to 99 per cent nearly doubles the safety stock but moves the reorder point up by only two units. High service levels are therefore cheaper than expected on long lead time items; what is genuinely expensive is the lead time itself.

The real lever is shortening lead time

Lead time appears twice in the calculation: linearly in expected consumption and under a square root in safety stock. Cutting it from three months to six weeks therefore delivers the same service level on roughly half the stock. The route to a shorter lead time is not larger orders. Framework agreements that reserve production slots, consignment arrangements on fast movers and completing technical approval correspondence before the order rather than during it all compress the timeline measurably. In most plants a large share of lead time is spent on approvals and shipping arrangements rather than on manufacturing.

No stock policy without consumption data

Without consumption records the calculation degrades into guesswork. The record needed is short: date of replacement, tonnage processed to that point, and reason for replacement. Kept for a year, those three columns let wear life be expressed in tonnes rather than hours, so consumption can be forecast straight from the production programme. The same record also separates a batch that failed early from one that reached normal life.

What not to stock

Holding non-critical, quickly available items with erratic consumption slowly converts the store into dead capital. At the other end, a reorder point calculation is meaningless for an item held as a single unit whose failure stops the plant outright; that one is kept as an insurance unit and reordered the day it is used. The store list is built from your own downtime consequences rather than from the spare parts catalogue. Supplier selection and contract terms are covered further under procurement and supply.

Questions we are asked

Which service level should be chosen?

There is no universal figure. Items that stop the plant justify a high level, items that only shave capacity justify a lower one; consequence decides.

How often should reorder points be revised?

Whenever consumption rate or lead time changes. In practice a quarterly review removes most in-season surprises.

Is consignment stock always favourable?

No. It makes sense on high and steady consumption. On an item used once a year it simply shifts cost to the supplier and returns in the price.

Share your parts list and the last twelve months of replacement records and we will work out the criticality classes and reorder points against your own consumption figures.