Study On Spare Parts Stocking Management Of Dapeng Company

Since commercial operation of Dapeng Company, the first pilot project in China for the importation of LNG, a lot of similar LNG projects sprung up like mushrooms. In recent years, some of these projects turned into commercial operation one after another, which brought more intensive competition in domestic LNG sales market. Along with the higher international oil price in a long period, the Dapeng Company also faced risk of short supply from the upstream. Pressure from profit target increased. However, for the downstream,63% of the imported LNG are supplied to power plants, while the remaining 37% are allocated to gas users in main cities in Pearl River Delta, safe and reliable operation comes to be the Company’s first priority. Once a shut-down occurred caused by equipment failure, it would lay serious impact on the downstream. And when the operation cannot resume timely because of short of spare parts, it would bring high stock out costs. To keep sufficient spare parts inventory is the most common choice to respond to emergencies. It turned to be one of the new topics for the Company to optimize spare parts stocking structure and minimize capital occupied under a high service level to eliminate operation costs.This article firstly displayed figures to show Dapeng Company’s spare parts stocking structure and capital occupation, and made analysis to explore and subdivide study objects, which greatly support the following model set up. Further analysis was made to elaborate the difficulties the Company should pay high attention, and the advantages the Company to promote spare parts stocking management optimization. Thereafter, the article defined the target of spare parts stocking optimization model, that is, to optimize spare parts stocking structure and keep the capital occupation within a reasonable level, so as to guarantee safe and stable production and minimize the cost. As the key part, the article set up a model for the random demand spare parts management which based on two-phased classification, and established ways to define inventory review cycle, inventory control strategy for each class, as well as the parameters in the model such as safety stock quantity, reorder point, maximum stock, order batch, etc. To avoid rigidity and off target when the model put into use, the article also elaborated ways to make dynamic adjustment to the model, such as classification change, demand forecasting method. When combined the planning demand into the model, a long-term dynamic mechanism of three-phased classification spare parts stocking optimization model was established. At last,’1st Stage Piston Rider Ring’ (stock item:202040420) was taken as an example to illustrate how the model works. Highlight to management was raised afterwards, that is, it is necessary to make adjustment to the models when it was put into practice to strengthen its applicability. The model and mechanism expounded in this article will contribute in setting up reasonable stocking structure, and cutting down capital occupied by spare parts effectively.