Item Criticality Review

What is it?

The concept of Asset, even component, Criticality is widely understood and is considered a necessary part of managing a group of assets/components when there is not an abundant supply of resources. The application of FMEA (Failure Mode & Effects Analysis) is commonly used to establish failure modes and the impact these failures will have on ongoing operations. This, in turn, informs asset care and Equipment Maintenance Plans (EMP) based on relative criticality.

Less common, however, is the application of a similarly robust approach to assessing part criticality – an invisible line being drawn after the component level at which objectivity and fact give way to “gut feel” and subjective decision-making.

The result is typically a binary “criticality” designation which is applied at the part level that rarely stands up to scrutiny when challenged.

While determining the right EMP, criticality plays a very large role in determining MRO stocking levels. Those Assets with higher criticality ranking warrant higher levels of part availability. While the EMP is in place to protect against unplanned downtime, “things” happen as a result of random acts, creating machinery failure. When this happens, the most critical assets need ready access to their supporting parts.

A robust stocking strategy representing the balance of target service levels and measured risk within working capital constraints requires a clear understanding of the parts that matter most to ongoing operations. Asset criticality values must reflect the assets they support, operating context in which they perform as well as how they are supplied and consumed in order to be relevant.

Implications of poorly defined criticality include:

  • ● Inefficient working capital allocation – too much inventory of the wrong items OR not enough of core items.
  • ● Unplanned equipment downtime – Maintenance waiting on parts.
  • ● Labor inefficiencies – reduced “wrench time” due to parts driven work order delays.
  • ● Operational risk – Operating equipment beyond planned PM while waiting on part availability.
  • ● Excessive freight spend- Expediting of non-critical items.

Leveraging a combination of our analytic tools and asset criticality assessment methodology our
subject matter experts can lead your team through the structured assessment of your item
catalog to establish the relative criticality of each item so that your stocking decisions are
aligned with the needs of the business and informed by facts.

  • Provides guidance and a level of rigor when applying decisions on determining critical spare parts holdings
  • Enables better lifecycle cost analysis for the supported assets providing stronger insights for capital planning decisions.

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