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Abstract:We consider combined inventory control and throughput time reduction in multi-echelon, multiindenture spare part networks for system upkeep of capital goods. We construct a model in which standard throughput times (TPT) for repair and transportation can be reduced at additional costs. We first estimate the marginal impact of TPT reduction on the system availability. Next, we develop an optimization heuristic for the cost trade-off between TPT reduction and spare part inventories. In a case study at Thales Netherlands with limited options for TPT reduction, we find a net saving of 5.6% on spare part inventories. In an extensive numerical experiment, we find a 20% cost reduction on average compared to standard spare part inventory optimization. TPT reductions downstream in the spare part supply chain appear to be most effective.

We consider a multi-item spare parts optimization problem with multiple warehouses and two customer classes, where lateral transshipments are used as a differentiation tool. Specifically, premium requests that cannot be met from stock at their preferred warehouse may be satisfied from stock at other warehouses (so-called lateral transshipments). We first derive approximations for the mean waiting time per class in a single-item model with selective lateral transshipments.Next, we embed our method in a multi-item model minimizing the holding costs and costs of lateral and emergency shipments from upstream locations in the network. Compared to the strategy where selective use of emergency shipments is the only differentiation option, we show that the addition of selective lateral transshipments can lead to significant further cost savings (14% on average). Adding the option of stock reservation for premium customers (so-called critical levels) appears to have little added value.