From over 30 years of supporting customers with their asset data, we know that spare parts are the majority of items procured as part of day to day operations of facilities in asset intensive industries globally. But, in spite of their importance and the volume of data involved, spares and parts data is often not prioritised, poorly handled and overlooked leading to a range of problems.
In this article we explain the different challenges that we help customers with as part of our expert data management services, and give guidance on how to mitigate or remove these issues for spares and parts data collection and processing.
Spares make up on average 60% to 70% of the entire material / item master in your CMMS, EAM and ERP systems. The largest volume of items being ordered to operate your facilities are spares, but, they suffer from being the items at the bottom of a complex overall hierarchy of information:
· Every tag/functional location has a duty,
· Which is linked to a piece of equipment of a specific type
· The equipment is delivered by a main supplier, with a specific list of parts often from a range of sub-suppliers
· Selected items in the parts lists are defined as spares
· The amount of spares required depends on elements including the criticality of the duty for the functional location, and the maintenance requirements from the supplier of the equipment.
Considering that most facilities in chemicals and process, oil, gas and LNG, utilities or pharmaceuticals industries have tens of thousands of items of equipment, it is easy to understand the large volume of spares required across the facility’s life and the associated cost.
Simply put, poor spares data is costing you millions of dollars of easily avoidable procurement and storage costs, and likely orders of magnitude more in lost production and downtime.
In the most serious case, unreliable spares data can lead to the wrong item being installed resulting to a major incident.
The impact of poor spares data is an ongoing problem throughout a facility’s lifetime, as spare parts procurement and maintenance activities are continuous.
Reliable and accurate spares data enables operators to:
· Ensure the right materials are onsite when needed
· Buy only the spares you need, at optimised quantities
· Prevent unnecessary warehousing costs and stranded capital from storing too much inventory
· Ensure business rules are fit for purpose
· Effectively use automated procurement processes with EAM, ERP and CMMS systems.
The chapters below give an introduction to the key challenges, which when not addressed properly, will result in compromised, incomplete and poor spares data and how they cause disruptions to your operations due to unreliable output from EAM, CMMS and ERP systems.
SPIR forms are by far the most common approach for operators, engineering contractors, service providers and equipment suppliers, to deliver and process spares information.
There are many symptoms and challenges for handling SPIR forms, we have taken the typical challenges and grouped them as follows:
1. A wide range of SPIR formats
2. Inconsistent input in SPIR forms
3. Checking and validation
The most common approach for collecting spares information is to collect spare parts information for procured equipment via a document called a "Spare Parts and Interchangeability Record" or "Spare Parts and Interchangeability List" which are referred to using the acronyms“SPIR” or “SPIL”.
This is normally a predefined structured format from the facility owner/operator (often an Excel template) that is provided by the buyer to the main supplier of the equipment to complete.
SPIRs include typically include fields for listing:
· Associated tag number
· Manufacturer’s name
· Manufacturer’s part number
· Recommended quantity
· Associated documentation
· Associated purchase order details
Although the fields are often common, the format and requirements for filling out SPIR and SPIL templates can vary from company to company, and even within the same company from facility to facility.
Due to formats for SPIR forms varying from customer to customer and contract to contract, poor guidance and inconsistent approaches for completing SPIR forms all result in spares data that is either incomplete, incorrect or inconsistent.
This leads to insufficient data for CMMS / ERP / EAM systems to function, such as missing unique identifiers that are required for ordering.
Where suppliers are including equipment from sub-suppliers it is quite comment for the different main suppliers to describe the same item in slightly different ways, resulting in duplicates being created by accident. This can also be intentional by the main supplier through assigning “in-house” part numbers to resell another company’s products with a mark up. Either way the result is the same, unnecessary over ordering and overspending on spares and associated storage costs.
Another widespread challenge is that part numbers supplied is for the product family and not the specific variant provided e.g. is the transmitter delivered the version with or without a digital display?
Ultimately, it requires human in the loop checks by personnel who understand the operator’s rules and requirements as part of processing and handling is essential to prevent poor data being loaded into your systems.
Checking and validation of SPIR forms is often a key area of difficulty. SPIR forms hold information that is detailed and unique but linked to other information deliverables, so any review must take account of the larger picture of information for the equipment and not be conducted blindly.
Suppliers are responsible for providing the information, but they do not know or understand the requirements for this information that your specific configuration requires in your CMMS, EAM and ERP systems. Often suppliers simply copy a previous delivery as the start point to be efficient, but this results in many errors being carried over.
It is all too common for checking and validation of spares information to be insufficient or not prioritised, but poor spares data results in a range of problems which can be prevented through quality checking, such as:
· Lack of original “manufacturer name” and “part number” results in overspending and over ordering due to not procuring directly from the original manufacturer and due to duplicate records.
· Incorrect links to a functional location / tag number / installed item of equipment results in the wrong spares being bought, the wrong criticality being assigned and the wrong procurement rules and quantities being applied.
· Incorrect ordering volumes leads to in too many or too few spares being procured.
· Items with incorrect unit pricing impacts operations budgeting and results in stocked materials being assigned a wrong financial value which is a major barrier for in particular for inventory optimization campaigns (see also our article on MRO inventory optimization).
Our experience is that for most new customers, 80% of tagged items in a facility are missing a link to any parts in their material master within their CMMS/EAM/ERP system. (Figures are based on experience across many customers where we first evaluate the state of existing data - you can find our more at our Data Cleansing Services page).
Key elements to check are:
1. Is the original manufacturer name and part number verified or is it a pseudo identifier given by the main supplier?
2. Do you have sufficient information to place an order for the items?
3. Is the SPIR form referencing tags/functional locations that exist and are correct?
4. Are the spares recommended aligned with the criticality?
5. Have the documents referenced been received?
6. Are the supplier and purchase order /contract details correct?
7. Are the currencies listed correct?
These checks are comprehensive and are best carried out by experienced personnel, using specialist tools as it leads to amore efficient process and more complete, accurate and reliable data.
Ensuring that the “original manufacturer name and part number” fields are valid is the most important and unfortunately most challenging element of any spare parts data validation.
Jørgen Kielland – Operations Lead, Sharecat Data Services
Original manufacturer name and part number ensures that your parts are correctly and uniquely identified and can be ordered. Without them duplicates records and overspending are inevitable.
There is no simple or quick fix for how to validate manufacturer name and part number. The approaches available are:
- Check the input and use publicly available online information to verify – this can be difficult if there is no contractual requirement for the main supplier to provide original manufacturer name and part number details.
- Compare the input fields to verified data sources, such as:
o Database of manufacturer names and aliases
o Templates of part numbering specific to the manufacturer
o A data lake of already verified equipment, documents and data per manufacturer.
Uniquely to Sharecat Data Services, we have built a comprehensive range of in-house verified data sources built up over 30 years, including all of the above databases, templates and data lakes (currently at over 1m items). So even when a main supplier will not provide the original manufacturer name and part number, we may already have the data available.
This means when we support our customers we are able to use software to auto-check and validate data to a much higher degree than our competitors, resulting in better data, faster, and at a lower cost.
Spare parts data often suffers as it is does not help delivery of the project or the purchased scope, and yet it is the responsibility of the project or procurement responsible to collect and verify the data. This inevitably results in spares data being given a low priority and only a cursory review at the critical time of collection.
Equally, the operations team, for whom the spares data is critical input, are often not involved in the collection or review process and simply have to work with and correct whatever is handed over after the equipment is delivered and the purchase order is closed out.
Both factors mean that spares data is almost uniformly incomplete, unstructured and inaccurate at the point of handover to operations.
It’s not rocket science, adjusting work processes to prioritise spares data using a SPIR co-ordinator (or equivalent) ensures efficient collection and validation processes to address the source of many problems.
Most operators have an approved vendor list, with the aim of commonality of certain types of equipment and component parts being included in equipment packages. For example, the same model of pressure transmitter from a nominated supplier such as Yokogawa, Emerson, Endress+Hauser, etc. This results in many purchase scopes including the same components and sub-items.
When an operator lacks the overview of all the spares data across all purchase orders, what will often happen is that far too many spares are bought for these common component and sub-items.
Running a commonality study across all spares being procured, prevents wasted use of capital and overstock of parts as it is then possible to optimise the amount of spares to meet the need of the total number of items with fewer common spares.
Sharecat Data Services provided a commonality study to an energy company for one production facility in the North Sea, this resulted in an over 80% saving on spares expenditure, this was over $30 million US dollars saved for a single facility.
To be able to run a commonality study you need to collect and compare the data, which requires tools and understanding which most organisations lack. This area is a classic application for specialist data services and can result in tens of millions of dollars of savings per facility, which far outweigh the cost of the data services themselves.
The majority of spares are linked to specific activities, e.g. commissioning, periodic maintenance and overhauls, and so have a specific need date. There are very few spare parts that are held as insurance spares for worst case scenarios that are hoped to never be required.
This has a knock on effect that the information required to order spares has to be ready and correct well in advance, taking into account of the lead time in ordering the parts from suppliers. Such a simple thing is often overlooked due to more pressing issues such as ensuring the main equipment arrives on site, but, ultimately results in delays to start up, or, lost production due to sometimes a single missing part both resulting in millions of dollars of lost revenue.
All asset data, whether equipment lists, asset registers or spares data is constantly changing throughout the life of the asset. The biggest change is during the project phase with the bulk of information collected, validated and delivered. However, during operations the flow of information continues as equipment is changed out and at a certain point it becomes obsolete. These ongoing processes during the life of the facility affects the validity of your spares data. Simply put, if you don’t keep track that an item has been removed you will continue to buy and store spare parts for a piece of equipment that is not longer in use, and, if you don’t keep your spares data up to date you won’t be able to buy spares when needed.
The challenge of obsolescence is a theme in itself for operations teams. Facilities in asset intensive industries have lifetimes of many decades, which makes obsolescence management a continuous part of asset management. When a product or even a part is obsolete, decisions must be taken for addressing the risk of continuing to use the equipment and planning on when to change it out. These decisions are dependent on having reliable information as input.
It is not only the spares data itself that requires maintenance, but also the relationships that the spares have to other information. For example, often during early operations and commissioning, installed equipment is found not to be fit for purpose and must be changed for another item. With such a change so late in the project’s life, but before operations handover, updating the relationships to tags and spares can easily be missed. Resulting in the spares in the CMMS being linked to the previously installed equipment and so the spares and bill of material data is wrong.
Parts are the individual components that’s combine to make up the piece of equipment. These parts may come from a range of OEMs and sub-suppliers to the main equipment supplier. Typically, parts and parts lists are shown in an exploded view drawing of the equipment.
Spares are the parts identified by the supplier of the equipment which they recommend the operator to buy as they may require replacement during the life of the equipment. Spares are often grouped into;
“Operating spares” these are parts that require replacement as part of planned maintenance and overhaul.
"Capital and insurance spares" these are critical spares that are on hand to ensure any impact is minimised due to worst case scenarios which are typically low chance.
"Commissioning spares" these are the parts that often require replacing as part of commissioning and start up activities(e.g. bolting, gaskets, o-rings, filters and similar).
SPIR stands for “Spare Parts and Interchangeability Record”, also know as a SPIL “SpareParts and Interchangeability List. It is typically a standard format issued by owner/operators, often via their engineering contractors, for suppliers to provide their recommendation for the spares that the owner/operator should purchase linked to a main equipment delivery or as part of operations. SPIRs are typically delivered as documents, but the contents are required as data for material masters / item master in EAM, CMMS and ERP systems. They are also important input for connecting spares to actual equipment and defining the associated bill of materials in ERP systems.
Processing SPIRs is not straight forward as they have many different fields with unique requirements as well as multiple cross references, all that must be correct for the data to be of value.
On a high level, the following figures are something that Sharecat Data Services enable our customers to achieve and exceed, and should be reasonable expectations for any company looking to improve their spares data:
· >80% of equipment items have manufacturer information
· >90% of spare parts item have manufacturer information
· ~95% of all spare parts items have part numbers
The SPIR process is far from optimal, but it is the standard approach in many industries. There have been many attempts and initiatives, past and current, to change the process which have failed due to a fundamental lack of understanding of the embedded standard work practices and needs for spares data.
However, working within the framework of standard work practices still presents opportunities for significant improvement. In particular in the following areas, all of which are elements that we at Sharecat DataServices support as part of our material data management services;
There is a general alignment in most industries we support on a common format for a SPIR, and we recommend to use this common approach as it removes significant risk of misunderstanding from your suppliers and poor spares data as a result. However, that doesn’t prevent you customising the format as necessary for your company, but ensure such customisation is only done when strictly necessary as what maybe clear and obvious for the buyer is often unknown or misunderstood by the supplier.
Although the SPIR process is quite common, it is generally poorly executed. It is important to give clear guidance to the suppliers and engineering contractors as to what is and isn’t acceptable and how best to complete the SPIR.
Make sure you include in your contractual documentation that the main supplier must provide original manufacturer name and part number information in their SPIR, this is extremely important.
Although the SPIR is not critical to meet the delivery date of the main equipment, it is optimal to handle the SPIR together with related documents that are. So we recommend that you specify delivery of the first revision of the SPIR much earlier than is typical – at the same time as the general arrangement drawing, exploded parts view and other detail drawings so that all can be checked together. This is because the SPIR references drawings and documents which need to be harmonised with one another.
Finally, don’t try to get your suppliers to digitalise through making them build and work on the SPIR in software that you provide them access to. This is the common mistake that most initiatives make and has been proven to trigger cost increases while seeing no improvement in data completeness or quality compared to the SPIR method. Let your suppliers work on the information within their own systems as normal and deliver as a document to avoid any change orders. From that point on the best approach is to use expert teams, such as Sharecat Data Services, to process and normalise the data effectively.
No matter whether it is during a project or day to day operations personnel responsible for co-ordination of SPIR forms ensures timely receipt and handling, importantly in accordance with company processes.
The SPIR co-ordinator role is one that Sharecat Data Services often fills for customers. In this role we act as data gate keepers ensuring both the process and the quality of the data directly from your engineering contractors and suppliers.
A SPIR co-ordinator includes covering the following:
· Enhancing and enforcing SPIR requirements in contracts, such as;
- All equipment, not just spares linked to a uniquely identified material record
- Cross sectional drawings with part-list, linked to equipment, where parts may be required (according to maintenance philosophy)
· Guidance and follow up for suppliers and contractors
· Ensuring all relevant parties participate in reviews
· Ensuring parts data is available in advance for optimised procurement for commissioning and operations
· Supporting spares optimisation processes to minimise excess inventory
Since spare parts data is critical for operations, but not necessary for delivery of the main equipment, it’s ideal if the review process can include members of the operations team as they know the structure and requirements of your CMMS, EAM and ERP systems and can quickly find errors.
Unfortunately, operations participation in reviews often does not happen for a range of reasons, and so often operation’s first exposure to the spares data and its problems comes too late, after the contract for delivery of the equipment is closed.
In addition to the operations team’s participation in the review, it is equally as important to use a dedicated team specialising in processing EAM, CMMS and ERP data to ensure that the data across SPIRs is normalised as part of overall processing to ensure accuracy and reliability.
Spares are the majority of items bought in operations and so strong interaction with your supply chain can remove significant bottlenecks and prevent unnecessary overspend and risk. With a strong engagement and feedback to your suppliers you foster an environment of continuous improvement to everyone’s benefit. With active interaction it is simple to request any missing information from the source. We know from experience that having strong relationships with suppliers removes friction in the process, which is why we actively engage with supply chains in oil, gas and LNG, chemical and process, utilities and pharmaceutical industries directly and through participation in a range of initiatives (see more at our Data Standardisation Services page).
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