Item classification for spare parts at Alfa Laval

Abstract: To decide what spare part item that should be kept in stock or not Alfa Laval, in the year of 2002, introduced a classification method based on picking frequency. Now it is time to make an overhaul of this method. Many different parameters are involved and Alfa Laval would like to have an evaluation of how their setup performs in comparison with other companies, universities and our own ideas. Purpose- The main purpose of this master thesis is to make an overhaul of the present classification concept at Alfa Laval’s DC’s for spare parts. Another purpose is to increase customer satisfaction and to reduce or keep cost. Method- Our approach in this thesis has been to do several cross section approaches. This means that several setups and differences of data have been compared with each other. We have gathered our data from interviews, questionnaires and observations performed with co-workers at Alfa Laval but also from theory and other companies. Conclusions- We recommend Alfa Laval to keep more of the items in stock. This can be made without an increasing of costs if a new classification system and ABC method based on several criteria’s is implemented. To improve the system further, we recommend Alfa Laval to introduce certain limitations to lower the inventory levels. These limitations mainly comprise the order quantities and SS.