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Procedia Manufacturing 11 (2017) 1560 – 1567

27th International Conference on Flexible Automation and Intelligent Manufacturing, FAIM2017,

27-30 June 2017, Modena, Italy

Multi-criteria classification for spare parts management: a case

study
Catarina Teixeiraª, Isabel Lopesª*, Manuel Figueiredoª
ªALGORITMI Research Centre, Department of Production and Systems, University of Minho, Guimarães 4800-058, Portugal

Abstract

Inventory management of spare parts for production equipment is a process that affects the performance of maintenance
management and therefore productivity. This paper presents an ongoing project aiming to develop a spare parts classification for
integration in a computerized maintenance management system (CMMS) of a manufacturing company. The classification
methodology should be able to define groups for which a stock management policy will be associated. Initially, a first
classification is carried out to identify the necessity and importance of spare parts for maintenance. After that, a multi-criteria
classification, including the previous maintenance classification, is used for defining the groups.

©©2017
2017TheTheAuthors. Published
Authors. by Elsevier
Published B.V.B.V.
by Elsevier This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the scientific committee of the 27th International Conference on Flexible Automation and
Peer-review under responsibility of the scientific committee of the 27th International Conference on Flexible Automation and
IntelligentManufacturing
Intelligent Manufacturing.

Keywords: Inventory management; maintenance management, multi-criteria classification, spare parts, spare parts management

1. Introduction

Spare parts management is a specific branch of inventory management and it is characterized by a highly erratic
and intermittent demand, and by parts costs of different magnitude.
Whenever a component fails or requires replacement, a need for parts demand is created [1,2]. Spare parts
inventories diverges from manufacturing inventory in many aspects [3]. The spare parts inventory is determined by
the demand, instigated by preventive and corrective maintenance. The availability of spare parts should be directly

*
Corresponding author. Tel.: +351 253604762; fax: +351 253604741.
E-mail address: ilopes@dps.uminho.pt

2351-9789 © 2017 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of the scientific committee of the 27th International Conference on Flexible Automation and Intelligent Manufacturing
doi:10.1016/j.promfg.2017.07.295
 Catarina Teixeira et al. / Procedia Manufacturing 11 (2017) 1560 – 1567 1561

related to maintenance in order to reduce failure downtime and costs. Inventory and maintenance management must
be seen as parts interconnected for optimizing company’s operations [4]. Spare parts stock management has the
functionality of providing support to maintenance service, such as to ensure operability of the installed systems.
According to Kennedy et al. [3] the stock management of spare parts has peculiars characteristics that make them
different from product inventories, such as: The decision of whether to repair or replace has profound implications
on maintenance inventory levels; The information about reliability is generally not available to the degree needed
for the prediction of failure times; Obsolescence may be a problem as the machines for which the spare parts were
designed become obsolete and are replaced; The costs associated with the lack of spare parts are difficult to
quantify, since they include costs associated with quality and production losses.
CMMS is now a central component of many companies’ maintenance departments, and it offers support on a
variety of activities related to maintenance. Concerning spare parts, it can track the movement of spare parts and
their requisition when necessary [5] and to facilitate the integration of logistics and maintenance perspectives [6].
The integrated logistics and maintenance decisions will allow a more efficient maintenance programming and its
execution.
The research work about spare parts management presented in this paper is included in the project of the
development of a CMMS prototype based on an upgrade of the current system used by the company. This upgrade
consists on software architecture redesign, adding a set of advanced management maintenance methodologies and
functionalities [7].
Spare parts management is not currently included in the CMMS of the company. Management of spare parts is
performed by a department that ensures all the plant's needs. To a more efficient and effective use of CMMS, it is
intended that CMMS should be able to provide information relevant for the inventory management of spare parts. In
order to improve inventory management of spare parts, it is intended to develop a classification method to evaluate
spare parts according to their relevance, based on the information registered in the CMMS. Classification is required
due to the high variety of spare parts and their characteristics.
In this paper, a classification methodology able to support inventory management of spare parts is presented,
creating groups of spare parts to assign an inventory management policy.
The paper is organized as follows. In Section 2 a literature review is presented about spare parts classification.
Section 3 defines the approach to perform classification. In Section 4, the methodology is presented through its
application in a sample. Finally, in section 5 the main conclusions and further work are presented.

2. Literature Review

Spare parts management has obtained great interest in literature, throughout the last decades. Various topics are
addressed concerning spare parts, such as inventory control, demand forecasting and reliability, and supply chain
management [8].
Spare parts classification is a relevant step to guide the whole management process. Many advantages can be
achieved by proper classification. The demand forecasting process may be driven by data collected for different
classes and performance improvement may focus on critical classes [9]. According to Cavalieri et al. [6], it is
important to perform a categorization of the spare parts used in an industrial plant. This categorization is useful for
filtering out those items where to put more attention.
Huiskonen [10] states that spare parts classification allows the determination of an adequate spare parts
management. It supports the choice of forecasting demand and inventory control methods, and establishes different
performance targets in the levels of service and inventory turnover for each category. According to Huiskonen [10]
and Molenaers et al. [8] there are two types of criteria to classify spare parts: process criticality, if its failure or
malfunction results in severe consequences for the plant. For example, consequences related to loss of lives,
environmental contamination or production loss; Control criticality, a spare part is considered critical if the
possibility to ensure immediate availability of the part is difficult to control. To assess the criticality, spare parts
classes should be created based on several quantitative and qualitative criteria.
This section is divided into 2 topics, namely, classification techniques commonly used for spare parts and the
main criteria for classification.
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2.1. Classification techniques

Two types of methods can be applied to classify the criticality of spare parts: quantitative methods and qualitative
methods [6].
In industry, the traditional classification method is ABC analysis, which is widely used to determine service
requirements of spare parts [8]. The classification helps companies to simplify stock management. The objective of
ABC analysis is to classify the inventory items or stock keeping units (SKUs) into three classes, namely: A (very
important items); B (moderately important items) and C (relatively unimportant items) [11]. ABC analysis is easy to
use and supports the inventory management of materials that are fairly homogenous in nature [12]. The criteria used
to classify are product annual demand and average unit price [13]. Huiskonen [10] mentions that as the variety of
control characteristics of items increases the one-dimensional ABC classification does not include all the control
requirements of different types of items. In the literature, it has been generally recognized that a “classical” ABC
analysis may not be able to provide a good classification in practice [14].
Another quantitative method is FSN, which classifies items in three categories: fast-moving, F, slow-moving, S
and non-moving, N. The method is based on the analysis of the demand patterns and leads to a different kind of
classification, that is focused on the moving rates of spare parts [6].
The qualitative methods normally used for spare parts classification are based in rough judgement or in scoring
methods [6]. The VED (Vital, Essential, Desirable) classification is a qualitative method [15]. The VED
classification system is based on the maintenance expert’s knowledge. Spare parts can be classified as vital, essential
or desirable [6]. Although its apparent simplicity, the structuring can be a difficult task because its implementation
can suffer from subjective judgments of users. Gajpal, Ganesh and Rajendran [16] suggested the application of VED
classification with an Analytic Hierarchy Process (AHP) procedure to limit the problem of subjective judgments.
The other qualitative method that is normally reported in the literature for spare parts classification is AHP. AHP
has been considered as a leading and one of the most popular multi-criteria decision-making techniques. AHP
attracts the attention of researchers due to the fact that normally the input data are easy to obtain [17]. It is used in a
wide range of fields, especially in operations management, to solve complex decision problems by the prioritization
of alternatives [19]. This technique can be used when it is required the consideration of qualitative and quantitative
factors and it helps to define the critical factors through the definition of a hierarchical structure similar to a family
tree [20].
In AHP, the relevant data is obtained from the use of a set of pairwise comparisons. The application of AHP
helps to reduce the complex decisions to a series of simple comparisons and consequently it helps to synthetize
results showing the best decision and the clear reason for the choice [20]. AHP uses a multi-level hierarchical
structure of objectives, criteria, subcriteria, and alternatives. These comparisons are used to define the weight of
each criterion and the relative performance measures of the alternatives for each criterion. This method also verifies
the comparisons consistency and provides a mechanism to improve it in the cases where the comparisons are not
consistent [17].
The Multi-Attribute Spare Tree Analysis (MASTA) proposed by Braglia, et al. [21] has a classification criteria
based on the item criticality. The method provides two successive steps: the first step proposes the identification of
four spare part criticality classes to analyze provisioning methods using a logic tree. The next step consists on
getting suitable inventory management strategies to each one of the four defined classes. AHP is used to support the
decision problem at each node of the logic tree.

2.2. Criteria selection

The first stage of the multi-criteria classification method is the definition of significant criteria. The popular types
of criteria used in four case studies are: lead time, probability of item failure, number of potential suppliers and
price. In the case study proposed by Molenaers et al. [8] a multi-criteria classification method based on spare parts
criticality is presented. The contribution of their research work was actual implementation of a classification method
in an industrial environment.
The approach developed by Stoll et al. [22] was intended to evaluate spare parts based in real inventory in
cooperation with an industrial company. The goal was to solve the problem of stockage of spare parts. The method
 Catarina Teixeira et al. / Procedia Manufacturing 11 (2017) 1560 – 1567 1563

(MASTA) developed by Braglia, et al. [21] presents a model for inventory management of spare parts. The model
takes into account a set of attributes for the classification of the parts in the paper industry.
In the study of Cakir and Canbolat [23] a multi-criteria inventory classification applied in a small electrical
company is proposed. The classification combines the potency of recent information technologies such as Java
Servlets, MySql database and the modeling principles of the fuzzy AHP methodology.

3. Multi-criteria classification steps

The company where this study is being carried out defines the quantity to order of spare parts and the safety stock
value based on the information provided by the suppliers of the machines and the experience of the maintenance
department. Currently, the spare parts are classified through the ABC-classification based on one parameter
(consumption) and through the FSN classification which takes into consideration the moving frequency. At the
moment, 18% of the items in stock are classified as non-moving (FSN Classification). This classification put in
evidence the spare parts that have not been moved for many years.
The classification based in ABC and FSN only considers a single criterion. Nevertheless, a single classifying
criterion cannot generally represent the whole criticality of an item. For instance, the lack of a slow-moving item can
have a major impact on productivity. Therefore, in the context of spare parts logistics, an approach that includes
criticality as a fundamental criterion should be developed. Spare parts management is not currently supported by the
CMMS of the company. The inventory management of spare parts is done by performing the record in the ERP
system and also in a "supermarket" of material that is used for maintenance actions.
In this paper, a multi-criteria classification of spare parts is developed in order to assign an adequate inventory
policy to each spare part, combining a set of criteria. Contrarily to what currently happens with the use of ABC and
FSN analysis.
In the first step, the criticality of spare parts is defined, identifying the importance and need of the spare part for
production. The main goal is to assign to each spare part a level of criticality using the designation VED (different
from the VED concept presented in the literature) which divides the spare parts in three criticality categories: Vital,
Essential and Desirable.
• Vital: Part failure have great impact on production processes;
• Essential: Part failure have middle impact on production processes;
• Desirable: Part failure pose no risk to the production processes.
In the literature the VED concept appears generally combined with the AHP method. In this case, two criteria and
the respective levels in a matrix are conjugated, since both criteria have the same degree of importance.
The result of the criticality of spare parts will be used as input of a multi-criteria classification whose objective is
to group spare parts that use the same inventory policy. Fig. 1 shows the two steps involved in the proposed spare
parts classification methodology. The purpose of the first step of this classification is to classify spare parts as to
their necessity and importance for maintenance. Therefore, the result of this step is to assign the spare parts into one
of three levels of criticality. This will be used in a second classification that aims to create groups of spare parts
sharing the same stock management policy. In the second step a multi-criteria classification that combines the
criticality of the spare parts with criteria related to the inventory management is performed.

Fig. 1. Inputs and outputs of the classification methodology

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4. An application example

In this section an application example of the classification methodology is presented. The first step of the
classification, criticality of spare parts, is validated using a set of spare parts. In the second step of the classification,
the criteria and methodology are presented. The selection is based in both the literature analysis and the industrial
assessment presented in the remainder of this paper and will help identifying the most proper criteria to be
considered when classifying spare parts.

4.1. Criticality of spare parts

The objective of the first step in spare part classification is to evaluate the criticality of spare parts in an efficient
and detailed way. Before defining the rules to criticality assignment, the most appropriate criteria have to be
selected. Two criteria, namely Function and Impact on Production, were defined. The Function criterion is divided
into 3 levels and the criterion Impact on Production in 4 levels. Table 1 presents the description of the criteria
and respective levels.

Table 1. List e description of criteria

Criteria Description

Function The function performed by the spare part in the production process
1. Auxiliary function The spare part function consists on supporting the equipment operation, it does
not interfere directly on production (e.g. control, comfort, structural integrity,
economy, prevent misuse).
2. Safety function The spare parts function is to preserve operator safety, it may not directly
interfere on production
3. Indispensable function The spare part is involved in a primary function of the equipment
Production Impact Impact of the spare part failure on the production process
0. No Impact The spare part failure has no impact on production.
1. Quality losses The spare part failure causes defective products.
2. Productivity reduction The spare part failure causes a reduction in production rate.
3. Sudden stop The spare part failure causes an immediate stop of the machine, causing the
total equipment shutdown.

After selecting the criteria and levels it was verified that both criteria have the same importance. Therefore, the
levels of the Function criterion were ordered from 1 to 3, as indicated in Table 1, and the levels of the Impact
on Production criterion were ordered from 0 to 3. In both cases, the smaller number represents the less relevant
level.
The result of this first step is the attribution of 3 levels of criticality to spare parts: Vital, Essential and Desirable.
For this purpose, a matrix of combinations of criteria and levels was used (Fig. 2).

Fig. 2. The combinations matrix

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The combinations matrix has been validated, with the help of the company, by analyzing several different parts.
This study reveals that among all the 12 possible combinations, 3 never occur. Table 2 presents a sample of the
analyzed spare parts, each one corresponding to the 9 existing combinations, as well as the level of criticality for
each spare part.

Table 2- Spare parts classification example

Description Function Production Impact Sum Classification
Cable M12 3 2 5 Essential
Grippe finger - milling cutters 3 3 6 Vital
Vacuum cleaner bag Ringler 1 0 1 Desirable
Chuck for motor Spindle 3 3 6 Essential
Light bulb 24V/2.6W 1 0 1 Desirable
Port Ethercat Junction-EK1122 3 3 6 Vital
Cable encoder 3 2 5 Essential
Ultrasonic sensor microsonic 3 3 6 Vital
Emergency button - ASI 2 3 5 Vital
ET-30 Emergency (stop) 2 0 2 Desirable
Interlock switch 2 2 4 Essential
Needles ICT 3 1 4 Essential
Protection bellows 1 0 1 Desirable
Brush 3 1 4 Essential
Support Scanner 1 2 3 Essential
Glass selective 1 1 2 Desirable

4.2. Multi-criteria classification

In the second step, the criticality level is used as criterion in multi-criteria classification of spare parts. Two other
criteria were added: Lead Time and Price.
Next, ranges for the possible quantitative and qualitative results of each criterion are defined in Table 3. The
intervals were defined with the company to cover all spare parts.

Table 3 – Criteria levels

Criteria /Levels Criticality Lead time Price

High Vital > 3 weeks > 1500 €
Medium Essential > 5 days and ≤ 3weeks > 300 € and ≤ 1500€
Low Desirable ≤ 5 days ≤ 300 €

After validation of criteria and respective levels, it is necessary to select the method for their comparison. Thus,
the use of a decision tree is proposed. Fig. 3 shows an example. In this case the first criterion to be taken into
account will be criticality, in second the lead time and the third the price of the spare parts. Finally, it is important to
define the most appropriate stock management policyfor each spare part. In this case, four classes of stock
management policies are proposed, as explained in Table 4.
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Fig. 3. Example of multi-criteria classification

Table 4 - Inventory policies

Inventory policy Description

No stock Unavailability of a spare part is a conscious decision

One spare part in stock This management policy implies ordering just in time when spare part is taken
from stock.
Multi spare part inventory It implies stocking more than one piece of a particular item. Inventory level,
safety stock, the type of inventory control, and the order replenishment have to
• Model 1
be calculated. More than a model can be settled down.
• Model 2

In defining the stock management policy, it will be important to take into account two aspects: the number of
machines for which the spare parts are used and the demand for spare parts. To determine spare parts demand,
reliability studies will be performed. In the case of parts that are periodically replaced (preventive interventions) it
will be necessary to know the probability of failure for the item during the preventive maintenance interval.

5. Conclusions

Spare parts inventory management represents a complex problem due to the difficulties concerning data
collection, the quantity of information to be considered, and the large amount of items involved. Spare parts are
important for maintaining production process operating efficiently, thus avoiding production and quality losses. On
the other hand, high inventory levels are expensive, due to both capital immobilization and storage space. Thus,
many studies are carried out in an attempt to optimize the quantity of spare parts stored. For this, the factors that
influence the decisions about the acquisition and storage of spare parts must be known.
This paper presents a study that aims to develop a multi-criteria classification for the definition of a stock
management policy for each spare part.
The development of this multi-criteria classification tool will help the organization making decisions to hold
spare parts in stock based on quantitative and objective information.
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Acknowledgements

This research is sponsored by the Portugal Incentive System for Research and Technological Development.
Project in co-promotion nº 002814/2015 (iFACTORY 2015-2018) and has been partially supported by COMPETE:
POCI-01- 0145-FEDER-007043 and FCT – Fundação para a Ciência e Tecnologia within the Project Scope:
UID/CEC/00319/2013.

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