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In(ventory) control of spare parts at the warehouse of the TD of Bolletje Almelo

Schutte, Mayke (2017) In(ventory) control of spare parts at the warehouse of the TD of Bolletje Almelo.

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Abstract:This research is conducted during six months at the Technical Department (TD) of Bolletje Almelo, as a master thesis for the study Industrial Engineering & Management (IEM) with the specialization Production and Logistics Management (PLM) at the University of Twente. The goal of the TD of Bolletje Almelo is to let all production lines produce as good as possible by conducting an optimal inventory management which minimizes downtime and costs, and maximizes the availability of the machinery. The TD of Bolletje Almelo has its own warehouse to stock spare parts and an IT system called Rimses to register different activities such as usage of spare parts and maintenance tasks. However, at the moment there are multiple problems which cause the lack of adequate inventory management at the warehouse of the TD of Bolletje Almelo, namely wrong and incomplete way of registration of spare parts in Rimses, and no or insufficient historical usage data of spare parts. Due to this it is difficult for the TD to make decisions based on historical data and to correctly estimate the required spare parts. Therefore, our main research question is defined as follows: “How can adequate inventory management and control policies for the spare parts in the warehouse of the Technical Department of Bolletje Almelo be determined by creating an environment where the spare parts of the Technical Department are managed properly so as to balance the inventory costs and downtime of machinery?” The warehouse of the TD is the location for stocking spare parts, which includes simple spare parts like screws, but also complex and expensive spare parts like Programmable Logic Controllers (PLCs), bearings and motors. These spare parts are required for the maintenance of the machinery in the factory. We first considered the current situation, which showed that there is no adequate management and structure of the warehouse, and no adequate use of Rimses. Therefore, we provide an overview of all known problems and causes, which are also tackled in this research:  Lack of discipline and instruction manuals.  Not all parts in the warehouse have a barcode.  No night supervision in the warehouse.  No history available of consumption of spare parts and services separately.  Wrong registration of spare parts and services in Rimses.  Only one KPI used at the warehouse: stay within the budget.  Incorrect and insufficient use of Rimses. Secondly, by performing a literature study we investigated the importance of inventory management and control policies in warehouses, Key Performance Indicators (KPIs), the decision whether to stock or not, classification methods and different inventory control policies. After performing this literature study we selected five Key Performance Indicators (KPIs) for the TD of Bolletje Almelo to create insight in their performance: percentage of stock outs, percentage of emergency purchases, percentage of non moving parts, percentage of target ship dates met, and production line availability. The production line availability is extracted from the Overall Equipment Effectiveness (OEE) tool of the production department. The data for the other KPIs is directly extracted from the Rimses database. Additionally, we developed a decision making framework for the TD of Bolletje Almelo to justify when and where a specific spare part has to be stocked. The following three choices are compared in this framework: 1) Not stocking the spare part in the warehouse of the TD of Bolletje Almelo, 2) Stocking the spare part in the warehouse of the TD of Bolletje Almelo, 3) Stocking the spare part at the supplier, by using Consignment Inventory. These choices are compared with each other by calculating the total relevant costs for each choice. Besides that, we selected the ABC analysis as classification method for the spare parts, whereby criticality is used as criterion. We define the degree of criticality by using the following aspects: delivery lead time, possibility of downtime and replaceability of the spare part. We chose an inventory control policy for each class of spare parts, based on the policies of Silver et al. (2017) and Rimses, see Table 0.1. To implement the above mentioned inventory control policies several activities are carried out in this research. The following actions are proposed and implemented to improve the management and structure of the warehouse, and the use of Rimses:  Writing instruction manuals for different processes in Rimses.  Generating and using pricelists with two of the core suppliers.  Adequately using the standard Bolletje purchase numbers.  Changing the current way of reception of spare parts, matching, and invoice registration.  Specifying the object-ID MATERIAAL in Rimses in different object IDs.  Generating a closed warehouse environment when the warehouse manager is not present. By performing a pilot study we implemented the classification method and inventory control policies at multiple spare parts of the warehouse. The (expected) results of this research are as follows:  Up to date economic values of the stock and historical data of invoices.  Correctly registration of used spare parts and working hours.  Complete and up to date quantities and economic values in Rimses of the stock in the warehouse.  Warehouse manager is able to reorder according to the reorder suggestions from Rimses.  Ability to determine the reorder point, EOQ and maximum stock based on the historical data from Rimses  Time savings for the warehouse manager and manager of the TD. The manager of the TD saves approximately eight minutes per invoice, whereby about fifty invoices have to be matched per week.  Better performance in the warehouse, due to higher reliability of the Rimses system and less chance of stock outs
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Industrial Engineering and Management MSc (60029)
Link to this item:http://purl.utwente.nl/essays/74551
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