Training Objective

At the end of this tutorial you will have a general understanding of the spare parts optimization process in a single tier logistic system using Spares Calculator Professional.

Project Brief

A national mobile phone operator is about to deploy a new generation of power amplifiers and before they go into service they need to find out how many spare parts they need to buy, how much it will cost and what’s the risk.


A Fictional US Mobile Phone Operator 

Part 1 

Consider the following example.

We work for a company called vPhone and vPhone are a national US mobile phone operator.

vPhone are about to upgrade their system by deploying improved power amplifiers and before they go into service they’re going to need to find out exactly how many spare parts they are going to need to buy.

vPhone have divided their support system into 50 regional stores. One in each state across the United States of America.

Now, for simplicity we are going to assume that each regional store supports 1000 antenna towers.

In real life they would support varying numbers, but this will make this example much easier.

Each antenna tower operates 24-hours per day and is equipped with 6 power amplifiers.

Each has a guaranteed MTBF 250,000 hours, a NFF ratio of 5% and cost $2,100 USD each.

Finally, vPhone has agreed a 30 day collect-repair policy with the supplier.

This means that broken units will be collected by the manufacturer using a courier and returned to the store within 30 days.

Part 2

Let’s enter this data into Spares Calculator.

To save time I’m going to open up a file that I saved earlier.

Let’s start with the project data.

We’re calling the project the vPhone PAU – PAU stands for Power Amplifier Upgrade.

And we are looking at one single Generic Regional Store.

The equipment is a Tower Mounted Power Amplifier

And this has a part number of AN-98-76 and it’s made by a manufacturer called Anderson.

Now let’s take a look at the logistic data.

Each antenna tower is equipped with 6 power amplifiers and we’ve got 1000 antenna towers in service.

Each power amplifier operates 24-hours per day and has a repair turnaround time of 30 days.

The MTBF is 250,000 hours and the NFF ratio is 5%.

Finally, each unit costs $2,100 US dollars.

Part 3

OK, so that’s our logistic data taken care of.

The next thing we need to do is to set the optimization goal and here we have three options:

We can either set an Availability Goal, or we can set a Stock-Out-Risk goal, or we can set a Mean-Time-Between-Stock-Out goal.

So, which one of these three should we choose?

Well, this is usually specified in the contract.

For example, the contract might say something like:

“The supplier shall provide sufficient spare parts to exceed an availability goal of 99% measured in a 30-day resupply period”.

So if this was the case, then we would select the Availability tool and enter 99% in this box here.

Alternatively, the contract might specify a Stock-Out-Risk goal.

And the contract might say something like:

“The supplier shall provide spare parts sufficient to reduce the probability of stock-out to less than 5% measured in a 30-days resupply period”.

In this case then, we would select the Stock-Out-Risk tool and enter 5% in this box here.

Finally, the contract might specify a Mean-Time-Between-Stock-Out goal.

And it might say something like:

“The supplier shall provide spare parts sufficient to meet a Mean-Time-Between-Stock-Out of greater than 10 years”.

In this case then we would select the Mean-Time-Between-Stock-Out tool and enter 10 years into this box here.

It’s worth noting that when you specify a goal, Spares Calculator converts all of the other goals so that they are equivalent.

So a few seconds ago I set the Mean-Time-Between-Stock-Out to 10-years.

Spares Calculator then converted this into an Availability of goal of 99.18%

It also changed the Stock-Out-Risk goal to 0.82%.

If I change the Stock-Out-Risk goal to 1% you will see that Spares Calculator converts the Availability goal to 99%.

It also converts the Mean-Time-Between-Stock-Out goal to 8.21 years.

Part 4

Let’s put this back to 10-years and turn our attention now to the reports:

In the Mean-Time-Between-Stock-Out report we can see a log linear chart showing the number of spares on the x-axis and Mean-Time-Between-Stock-Out on the y-axis.

We’ve also got a Results Summary panel that shows the project data along with the recommended spare parts and the projected performance figures.

At the bottom we’ve got the tabular results and this shows us the Availability, Stock-Out-Risk and Mean-Time-Between-Stock-Out figures all in one combined report.

Let’s take a look at the Availability Calculator.

You can see here that the chart now shows Spare Parts on the x-axis and Availability on the y-axis.

You can also see that the Summary Panel now shows the Availability Goal along with the Expected Availability performance.

The same goes for the Stock-Out-Risk Calculator.

We’ve got the chart with Spare Parts on the x-axis and Stock-Out-Risk on the y-axis, and a Summary Panel that now shows the Stock-Out-Risk Goal and Expected Stock-Out-Risk performance.

Part 5

Now obviously you can take screenshots of these things and incorporate them into your proposals, contracts and tendering documents.

But with Spares Calculator that’s not really necessary.

And that’s because Spares Calculator produces really nice PDF reports.

Let’s take a look at one now.

The first section shows who produced the report and when.

The next section shows the Project Data – so things like the project name, store and equipment.

After that we’ve got the Input Logistic Data – this includes things like the equipment MTBF, NFF Ratio and Daily Operating Hours.

Next we’ve got the summary of the results.

This includes the recommended number of spares, the costs and the expected logistic performance for a combined set of goals.

So in this example we have a Mean-Time-Between-Stock-Out goal of 10 years and we are expecting to achieve an actual Mean-Time-Between-Stock-Out of 12.45 years.

To achieve this we will need to procure 29 spare parts at a cost of £60,900 US Dollars.

The next section shows the tabular data.

Then we have the Stock-Out-Risk chart.

The Availability chart.

And the Mean-Time-Between-Stock-Out chart.

Finally, we have a glossary of terms in Appendix 1.

And a short introduction to Spares Calculator in Appendix 2.

So all we need to do now is to print off this report and append it to our proposal.

So that brings us to the end of this short introduction to Spares Calculator I hope you found it useful and if you have any questions then please feel free to contact us.

Thanks for watching.