Stock Management in Asset Strategy Optimization

The optional module Stock management adds powerful new features to Asset Strategy Optimization. It is important to understand the background of stock management in the context of FMECA to fully exploit the potential of this module.

Stock as mitigating action

One of the possible mitigating actions during an FMECA is to stock items to minimize downtime. Asset Strategy Optimization will ignore the defined delivery time when an item is set as being stocked, thus reducing downtime. The effect of this action can be read from the risk matrix, which shows the effect the mitigating action has on the risk. The mitigating action may cause an asset's risk to shift from critical to non-critical in the matrix.

Cost versus risk

As stocking a spare part adds to the overall cost, it seems logical to compare those costs with the expected advantages of risk reduction. Spare parts may be used on more than one (type of) asset. Stocking a spare part may bring additional benefit as it may also reduce the risk of those other assets. Knowing which assets will benefit from a stocking action and the influence this has on risk reduction (which may differ among assets), can support the stock management process.

Safety Stock and Economic Order Quantity

One way of risk mitigation is to stock parts that decrease downtime to a minimum. Part of stock management is the minimum number of stock items required to guarantee stock availability at all times. This is called the safety stock.

The Economic Order Quantity is the optimal quantity that should be ordered to keep order costs to a minimum. For more information about these subjects, refer to Stock Analysis (Economic) and Stock Analysis (Economic).

Importing stock items

Often, a list of stock items is already available, e.g. retrieved from an EAM (Enterprise Asset Management) system. Being able to import that list into Asset Strategy Optimization may greatly reduce manual administration. The Excel import function for stock items supports just that.

Importing an asset structure with stock items in place

Asset Strategy Optimization stock management function overview

Asset Strategy Optimization supports the points above as follows:

• The user may import stock items using a formatted Excel file (supplied with Asset Strategy Optimization), and the user may manually define spare objects.

• The user may link the stock items to objects in Asset Strategy Optimization; this will cause Asset Strategy Optimization to ignore the delivery time already set for an FBM action, in favor of the delivery time defined in the stock item itself; when also marked as actually 'stocked', the delivery time used by Asset Strategy Optimization will be 0.

• After calculating the risks the user may perform a stock analysis; Asset Strategy Optimization can advise which stocking actions would actually reduce an unacceptable risk to an acceptable level. This also counts for other assets which can use the same stock item. Moreover, Asset Strategy Optimization may indicate which stocked items do not contribute to lowering the downtime in such a way that it will cause a shift from an unacceptable to an acceptable risk level. This information can be used to decide whether currently stocked items should no longer be kept in stock.

• In parallel to the analysis the user may generate a report that also shows a list of candidates for stocking

• These data may help the user optimize a stocking strategy

• Asset Strategy Optimization may also provide a stocking recommendation report. This report recommends which components should be stocked based on risk and cost.