Critical analysis of spare parts using the analytic hierarchy process

Spare parts constitute a significant portion of the inventory in any manufacturing organisation. Specifying optimal inventory control policies for spares requires the use of forecasting techniques, ABC analysis, FSN analysis, VED analysis, etc. While the ABC and FSN analyses are straightforward, evaluation of the criticality of spares by using quantitative measures is difficult and problematic while performing VED analysis. This paper describes the use of Saaty’s analytic hierarchy process for evaluating the criticality of spares. A three-level hierarchy has been suggested. Criteria influencing the criticality of different spare parts have been identified and the alternative modes for each criterion have been specified. The model has been used to obtain absolute measurements of criticality which can be compared with prespecified numerical limits for classifying spare parts as Vital, Essential, or Desirable. The model’s working has been demonstrated through an illustration involving a spare part in the inventory system of a large manufacturing organisation.