Food Engineering’s 2015 Replacement Parts and Components Trends  Survey identifies the “who, what, why and how” of replacement parts purchasing, inventory maintenance, condition monitoring and related topics. Food and beverage manufacturing personnel reported spending less on replacement parts and components in 2014, with a mean spend of $1,136,249, compared to $1,529,092 the year before, a 26 percent decrease. The median spend also decreased to $300,000 from $500,000 in 2013.

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The number of respondents to this year’s survey who spent less than $100,000 on replacement parts increased to 32 percent, compared to 2013’s 21 percent. The number of respondents spending between $100,000 and $500,000 was 22 percent, while those who spent $500,000 to $1,000,000 declined from 19 percent in 2013 to 14 percent last year. Those spending between $1,000,000 and $5,000,000 fell from 30 percent in 2013 to 25 percent in 2014.

As in previous years, maintenance personnel are the most frequently involved in the majority of maintenance decisions. However, general administration/executive management involvement in these decisions rose from 16 percent in 2013 to 23 percent in 2014, making it the second-most involved group in maintenance decisions.

Regularly scheduled visual inspections as a maintenance replacement strategy continues to dominate other methods, however, slightly less this year (46 percent), with the “replace it when it breaks” option coming in at 29 percent. This shows a continuing trend of the gap narrowing between the use of visual inspections to determine replacement and fixing it after it is broken.

The number of respondents using time-based parts replacement schedules rose to 12 percent (vs. 6 percent in 2013), while those applying predictive tools, such as heat measurement, energy use or vibration analysis, rose slightly to 10 percent.


ROI and OEM

Forty-six percent of respondents said most parts are considered commodities, with price the determining factor when specifying replacements (an increase from 2013’s 32 percent). Only 33 percent said they have quantified the maintenance costs of most machinery parts and are able to calculate the return on investment of higher-quality parts, compared to 44 percent in the 2014 survey. The number of respondents who indicated manpower shortages force them to choose the highest-quality parts rose to 14 percent (vs. 11 percent in 2013).

Eleven percent of companies reported using only high-quality OEM parts at their facilities, a slight decrease since 2013. Among those who have experience with less-expensive parts, 31 percent stated less expensive parts do not work as well as higher-priced parts, while 35 percent said they have experienced premature machine failures. However, 34 percent said less-expensive parts work just as well, and 32 percent has had no problems with non-OEM parts.


Product quality and availability

Product quality remains the most important factor when selecting a replacement parts and components supplier, cited by 93 percent of the respondents; 91 and 89 percent, respectively, highly value product availability and on-time delivery. This emphasis on availability and on-time delivery reflects a trend toward finding solutions to reduce unscheduled downtime due to equipment failure, a major concern for food and beverage processors.

Eighty-seven percent of the respondents said value for price paid is also highly important, while 79 percent cited technical service support. The importance of a supplier’s reputation edged out product warranty in the rankings, 64 percent and 63 percent, respectively. Having a previous relationship with a supplier continues to fall in importance for respondents, slipping to 45 percent from 59 percent in 2013. Respondents considering the lowest price an important characteristic remained the same this year at 40 percent, indicating processors are still striving to find economical solutions to replacement parts inventory and ordering challenges.

Respondents who said their company made changes in the last year to improve parts management and sourcing most often cited they have increased inventory to achieve less downtime. Many of the answers reflected companies are not only stocking more parts, they are also concentrating on stocking those replacement parts that are more crucial to operations. For example, one respondent wrote:

“We have become better at determining failure rates of key parts and holding inventory sufficient to that need and that need only; additionally, we have begun stocking critical, expensive parts that have a long lead time and little, if any, indication that they are about to fail.”

Many of the respondents indicated more companies are moving to a centralized purchasing method and working to streamline the ordering process, as reflected in this comment: “Corporate engineering has implemented some mandatory vendors for high-volume replacement parts, as well as working toward common vendors across the company.”

Other respondents said their companies are changing over from hard copy to electronic parts management systems and looking for new suppliers to find the best service and value. Although many said they are trying to prevent long periods of downtime by having parts on hand, some did say they are working toward eliminating holding onto parts for too long and reducing the extra space to store them.


Automated ordering and delivery services

The majority of respondents use automation in replacement parts ordering, with the most commonly used part ordering method a computerizing maintenance management system (CMMS), at 26 percent. Another 13 percent use system-generated purchase orders while 12 percent use standardized hard copy purchase orders, and 6 percent utilize a direct data link to a parts supplier or distributor. This continues a trend away from system-generated purchase orders, which was at 15 percent in 2013. The number of respondents using a direct link to a supplier or distributor slightly rose.

Nearly all the respondents to this year’s survey consider the lifecycle costs of replacement parts in their new equipment purchasing decisions. Thirty-nine percent of the respondents said they always do, and 53 percent said they sometimes do.


Improving efficiency, reducing cost

Nearly three-quarters of the respondents said their company has not made any inventory practice changes within the past year, up from two-thirds last year. Twenty percent said they reduced their inventory (down from 22 percent in 2013),  while 10 percent increased their inventory (vs. 16 percent in 2013).

Respondents reported decreasing inventory for a number of reasons, but overall cost reduction emerged as the main driver behind it. Other popular answers were the elimination of old and/or obsolete inventory, as well as better assessment and tracking methods. For instance, one respondent wrote, “We monitor inventories and try to reduce them where possible based on predictive maintenance and manufacturer recommendations.” Others stated they were reducing overstock, e.g., “stocking fewer parts that can serve more than one function.”

Downtime reduction is the main reason for increasing inventory, as explained in this comment: “We cannot afford to be down and have decided to keep critical parts on hand that have a long lead time for delivery.” However, others noted more machines and new equipment in their plants, increasing the need for replacement parts.

Twelve percent of respondents’ companies do not currently leverage maintenance repair operations (MRO) inventory practices. However, among those that do, preventative maintenance is, by far, the most popular (reported by 76 percent), slightly down from the 2014 survey’s 79 percent. Placing parts in kits for routine maintenance is the next-most common practice at 38 percent. Thirty-six percent utilize vendor-managed inventory, while 35 percent (the same as last year) said they remanufacture or reengineer parts onsite to improve performance or reduce costs.

The central warehousing of common parts for all plants is a practice leveraged by almost a quarter of respondents, slightly down from last year. Consignment’s popularity remained flat at 16 percent.

Among the 38 percent of respondents whose company has implemented MRO cost-cutting strategies, predictive and preventive maintenance is the most common strategy. Company-wide purchasing agreements or contracts, better management of inventory and bulk purchasing are other popular MRO cost-cutting methods.

Inventory dollar values and turns are most commonly tracked to improve inventory management (64 percent and 55 percent, respectively); the number using inventory value increased by 8 percent over last year. Just over a quarter of respondents said they outsource to local supply houses. 

According to 28 percent of respondents, the greatest challenge for minimizing inventory is finding multiple sourcing options for parts. Another 16 percent cited insufficient funding to organize and streamline inventory practices, while 13 percent said a lack of consistency in naming parts and the absence of a searchable parts database are the greatest challenges.

Respondents believe innovation opportunities in parts and components management lie in the standardization of parts and equipment, as well as improving the quality of parts and automating parts ordering. Rounding out the top four most-frequently cited opportunities for innovation was having an electronic or software-based parts management program.

A quarter of respondents said their company uses remote machine diagnostics and troubleshooting services. Of those that use these services, 59 percent do so solely via the Internet, using the plant’s Ethernet pathway, compared to 69 percent in last year’s survey. Thirty-two percent access remote machine diagnostics solely via a modem built into the machine (vs. 20 percent last year). Seventy-eight percent relay the information to maintenance and parts ordering personnel, a big jump from last year’s 59 percent.

Based on survey results, condition monitoring has declined, with 32 percent reporting no condition monitoring at all in 2014, compared to 29 percent in 2013. Thermal imaging is the most popular tool, utilized by half of all respondents, followed by vibration analyzers and infrared sensors, 41 percent and 40 percent, respectively.

Oil analyzers are used by 29 percent of the respondents, while 27 percent use ultrasonic sensors. The use of both has remained roughly flat from 2014’s survey. Stethoscope usage has declined a bit in popularity, falling to 14 percent from 17 percent a year earlier.

With FSMA-mandated food safety standards and requirements in mind, the 2015 Replacement Parts and Components Trends Survey asked respondents for the second time how their maintenance management systems are integrated with their food safety plans. The numbers were essentially the same as those reported in the 2014 survey, with 80 percent of respondents indicating their maintenance team receives food safety-related training on a regular basis. An additional 11 percent said their team is beginning to receive food safety-related training; 8 percent said their maintenance team does not receive food safety training of any kind, a slight increase from last year’s 5 percent.
 


About the survey

The report’s statistics and comments reflect the responses of Food Engineering readers who returned mailed questionnaires or elected to complete the replacement parts survey online. General administrative/executive management, plant operations and engineering professionals represent 34, 25 and 22 percent of the respondents, respectively, for a total of 81 percent. The remaining 19 percent of respondents are split between maintenance personnel (12 percent), purchasing personnel (4 percent) and research and development personnel (2 percent).

A little more than half of the respondents work for a company with between 100 and 499 employees. Twenty-nine percent work for a company with less than 100 employees, 10 percent work for a company with over 1,000 employees, and the remaining 8 percent work at companies with between 500 and 999 employees.

The primary products produced by 23 percent of respondents are processed meat, poultry and seafood, while 15 percent produce bakery and snack food products; 14 percent produce beverage products. An additional 7 percent produce shelf-stable foods/soups, sauces, jams and jellies. Six percent produce cereal and grain-based products; 6 percent are co-packers/co-manufacturers of food/beverage products; 6 percent produce dairy and frozen novelty items; 6 percent produce dietary supplements, chemicals and food ingredient products; 6 percent produce frozen food and prepared meals/fruits and vegetables. Another 5 percent process candy, sugar and confectionery products, while 3 percent work at corporate and divisional headquarters.