Whether or not to standardize equipment and spare parts is one of the enduring debates of engineering, maintenance and spare parts management.
On the one hand, standardization is said to lead to improved operating and manpower efficiency, as well as reduced inventories; on the other hand, not standardizing is said to enable companies to take advantage of technical developments and innovation. One thing that is certain is that the impact of explicit pros and cons are hard to quantify and will be specific to the individual circumstance.
First, let’s define standardization. The Merriam-Webster online dictionary suggests a simple definition of standardize as: ‘to change things so that they are similar and consistent and agree with rules about what is proper and acceptable’.
Standardizing for spare parts management, usually means agreeing that a certain type/model of equipment will be used and with that the spare parts required for each installation will be the same. This is different to industry-wide standardization such as the use of metric nuts as bolts.
Spare Parts Standardization Pros and Cons
At SparePartsKnowHow.com we have a list of 12 pros and cons for spare parts standardization and this list demonstrates why the arguments for and against standardization are not straightforward: One of the pro’s is the potential for reduced parts costs and one of the cons is the potential for increased parts costs! How can both arguments be true? It all depends on the specific circumstance.
Three Questions to Ask About Standardization
In deciding whether or not to standardize on a particular type/model of equipment, and the associated spare parts, a detailed examination of the specific circumstance needs to be completed.
This will include determining the real impact on your company of any change of policy and ensuring that the motivation for ordering non-standard equipment is justified. These are the three key questions to ask:
- Is there a genuine innovation/operational advantage?
- How much more/less inventory is required and what does that cost/save?
- If a change in type/model is agreed, is there a way to gradually move to the new type/model as the old ones are used up (meaning that the old type/model will no longer be ordered)
When working through the decision whether or not to pursue spare parts standardization there is a need to be mindful of the motivation.
Is it because someone just wants the latest thing? (Some might call this the ‘cool factor’.)
Is it motivated by vendor bias? (A preference for, or dislike of, a specific vendor.)
Is it motivated by a perception of quality for high priced components (Sometimes referred to as ‘gold plating’).
Standardization is not trivial. At a minimum is requires a quantification of the costs or savings that might arise and an assessment of the associated risks.
Like all management and investment decisions relating to spare parts holdings, it is not simply an engineering, operations, storeroom, or procurement decision but the result of the consideration of all functions that are involved.
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Posted by: Phillip Slater