A decision-making framework to integrate maintenance contract conditions with critical spares management

David R. Godoy, Rodrigo Pascual and Peter Knights

Reliability Engineering and System Safety, 2014, vol. 131, issue C, 102-108

Abstract: Maintenance outsourcing is a strategic driver for asset intensive industries pursuing to enhance supply chain performance. Spare parts management plays a relevant role in this premise since its significant impact on equipment availability, and hence on business success. Designing critical spares policies might therefore seriously affect maintenance contracts profitability, yet service receivers and external providers traditionally attempt to benefit separately. To coordinate both chain parties, we investigated whether the spare components pool should be managed in-house or contracted out. This paper provides a decision-making framework to efficiently integrate contractual conditions with critical spares stockholding. Using an imperfect maintenance strategy over a finite horizon, the scheme maximizes chain returns whilst evaluating the impact of an additional part to stock. As result, an original joint value – preventive interval and stock level – sets the optimal agreement to profitably allocate the components pool within the service contract. Subsidization bonuses on preventive interventions and pooling costs are also estimated to induce the service provider to adjust its policy when needed. The proposed contractual conditions motivate stakeholders to continuously improve maintenance performance and supply practices, thus obtaining higher joint benefits.

Keywords: Maintenance outsourcing contract; Spare parts stockholding; Inventory pooling allocation; Imperfect maintenance; Supply chain coordination (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reensy:v:131:y:2014:i:c:p:102-108

DOI: 10.1016/j.ress.2014.06.022

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