Track: Inventory Control and Management

Abstract

Managing and controlling the spare parts inventory in industries including cement industries is critical activity. In this case study, the out of stock incidents especially spare parts in the electrical and instrumentation category were often occurring and significantly affecting the maintenance program based on observation and preliminary data collection. The purpose of this study is to minimize stock out for electrical and instrumentation spare part in cement industry. The lumpy phenomena were happened in some spare parts based on ADI-CV matrix methods and the probabilistic methods is needed to manage spare parts. The continuous review method (s, S) policy is selected to determine the number of orders (Q), reorder point (ROP) and total inventory costs. The Monte Carlo simulation method is used to analyse the inventory performance such as inventory costs and service level. The main result of this study is to determine the improvement action for managerial to reduce stock out and inventory costs. The main practical implication of this study is to increase the service level from 61% - 84% up to 88% - 95% in order to reduce the production losses due to stock out of spare parts.