“Get everything in place before you start”

Emiel Klifman (KIM Plus Delta) on managing spare parts for new installations

During the construction of a new installation, there is often little time to organise the management of spare parts. The common mindset is, “We'll deal with that later.” Everyone is focused on getting the installation up and running as quickly as possible. But if something fails immediately after commissioning, the asset owner or operator is left with a problem. Emiel Klifman of KIM Plus Delta advises addressing these issues before the construction project even begins. “Specify in the contract with the contractor what information they must provide about the required spare parts, and make them responsible for supplying those spare parts during the initial operating period.”

The engineering and construction of a new installation require considerable time and effort from everyone involved. As a result, important topics such as asset & maintenance management can easily be overlooked. Emiel Klifman sees this happen regularly in practice. “A project team completes a new installation and, at the end of the project, says: ‘Oh yes, this also needs to be maintained. Here are the folders with the documentation. Maintenance department, technical services—good luck.’ As the maintenance department, you're completely unprepared. If something breaks down during the first week, all you can really do is put out fires. You can't respond quickly and effectively because you don't have complete information. Those arrangements should have been made during the project, when you could still obtain all the required information from the project team. Once the project is finished, everyone has moved on, and if you need additional information afterwards, you'll have to pay for it.” Of course, things can still change during the course of a project, but according to Klifman, waiting for the final as-built drawings at the end of the project is simply too late.

Asking the right questions

The key is to ensure that all spare parts information is entered into the asset owner or operator's ERP or maintenance management system in time. “Start by determining exactly what information is required at item level and what information is already available. Do you have one supplier or twenty? What agreements have you made with each of those suppliers, and what exactly will they deliver? You're talking about hundreds, perhaps even thousands, of different items. Put all of that information into a database to create an overview: what information do you already have, and what still needs to be requested from suppliers? The ultimate goal is to determine which items should be kept in stock and which should not—for example because they are readily available, have a limited shelf life, or are too expensive to stock considering how rarely they will be needed. This applies if you have your own maintenance department or technical services team. If maintenance is outsourced, you need to make these arrangements with your maintenance service provider. Otherwise, you risk losing valuable information if that company goes bankrupt or if you decide to switch providers. If you organise all of this during the construction project, you can still ask the project team for information and involve them in the evaluation: what do they recommend you keep in stock, and can they substantiate that recommendation? We help our clients ask the right questions of the contractor and the entire project team.”

“The ultimate goal is to determine which items should be kept in stock—and which should not.”

Once those questions have been answered and it is clear which parts are required, the next step is to determine how everything will be organised. “How is the organisation structured? What are the standard working procedures? What is normally kept in stock? What is the lead time for parts that are not stocked? Are there contracts with suppliers who keep certain items in stock? Is there a service level agreement stating that, if something fails, the supplier will repair or replace it within a specified number of hours? If none of those arrangements exist, identify the most critical components and the highest-risk points within the installation. If systems are designed with redundancy, part of the installation can continue operating even if a component fails. Buffers within the system can also reduce risk. But if a single critical component can shut down an entire production line, you should definitely keep that part in stock. At the same time, you should also consider how failures can be prevented through inspections and timely maintenance.” Budget constraints can, of course, play a role. “In that case, you should build a solid business case for increasing the spare parts budget by demonstrating that it will improve operational reliability and reduce downtime.”

The role of the technical wholesaler

An important factor in these decisions is the mean time to failure (MTTF): how often does a component fail? According to Klifman, technical wholesalers supplying these parts often do not have that information. “Naturally, they can provide information about lead times. They can also play a proactive role by keeping certain items in stock for their customers and making agreements about this. A technical wholesaler can do this for multiple customers, making it much more cost-effective than if every company maintained the same inventory individually. After all, holding spare parts in stock can be expensive because of purchase costs, depreciation and warehouse space. Some items also have a limited shelf life, while others must remain electrically energised, which is often difficult to accommodate in a standard maintenance warehouse. In addition, components may become obsolete. A wholesaler can advise customers on the right 'last-buy moment' before a product is discontinued and recommend suitable replacement parts.”

“If you don't specify it properly in your contract, you'll never receive that information.”

In short, effective spare parts management depends on a great deal of information, which is usually spread across multiple parties. Within organisations themselves, much of that knowledge often exists only in the minds of maintenance managers and technicians rather than being captured in systems. “That's true, which is why many decisions are still based on gut feeling instead of objective data. You need to extract all of that knowledge and store it in a database. Ideally, you should collect this information during the project phase and record it directly in your company's ERP or maintenance management system. You can also document the reasoning behind certain decisions, for example why a particular component was selected. In fact, these requirements should already be included in the contract with the installation contractor by specifying exactly what spare parts information must be delivered. You should also agree that you are not restricted to ordering parts exclusively from the installation supplier, but are free to purchase them from a technical wholesaler, where prices are often significantly lower. Sometimes contractors simply buy a standard component and apply their own label, making it appear as though it can only be ordered from them. This is common with electric motors, for example. You may already have identical components in stock for another installation without realising it because of that label and because the contractor refuses to disclose the original part information. If you don't define these requirements properly in your contract, you'll never receive that information.”

Peace of mind

Klifman's key message is simple: arrange everything in advance. “Transfer part of the spare parts risk to the contractor. Tell them that they know the installation and understand which components are the most critical. Therefore, you want them to supply the spare parts during the commissioning phase and, for example, throughout the first year as part of the contract. That way, you'll have your spare parts organised during the initial operating period and enough time to determine exactly what you need. You can make well-considered decisions instead of being forced to decide under pressure during the construction project. That gives your organisation real peace of mind.”

Emiel Klifman, Asset & Maintenance Management Consultant at KIM Plus Delta: “Spare parts management should be arranged during the construction of an installation, because that's when you can still obtain all the necessary information from the project team.”

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