PhD work

Rob's PhD thesis can be found here. Rob worked as one of three PhD students in the IOP-IPCR project 'life-cycle oriented design of capital goods' (people involved in the project: go here). A number of companies is involved as member of the user committee; four companies are involved to a larger extent: PANalytical, Philips Medical Systems, Vanderlande Industries, and Thales Nederland.

Rob’s research focussed on the joint problem of Level Of Repair Analysis (LORA) and spare parts stocking, which is explained below. This research is inspired by problems that the logistic engineers at Thales Nederland face. Therefore, an extensive case study has been performed at Thales Nederland.

Capital goods are generally maintained by a repair by replacement policy: a failed component is removed from the product and replaced by a functioning spare part, if available. Otherwise, the replacement has to wait until a functioning component arrives. In the military world, the components that are taken out of the product are called LRUs or line replaceable units. Defective LRUs may either be discarded or repaired. If it is discarded, a new LRU needs to be purchased. If it is repaired, then possibly a subcomponent needs to be replaced by a functioning one. Since this replacement is typically performed in a repair shop, these subcomponents are called SRUs or shop replaceable units. The SRU should in turn be repaired, possibly by replacement of a part, or discarded itself. The product is thus characterized by a multi-indenture product structure, where an indenture level is the level in the product structure.

In practice, the installed base, consisting of all systems that are sold and still in use, is usually dispersed over a large geographical area. The OEM (or in the military world usually the customer) needs a support network with facilities that are not too far from the installed base locations, the operating sites. However, locating spares and test equipment close to each of the operating sites is usually expensive. Therefore, often more central locations are used to stock some spare parts and to locate more expensive test equipment. As a consequence, a repair network usually consists of multiple echelon levels.

The level of repair analysis (LORA) problem is to determine whether a component should be repaired or discarded upon its failure, and at which location in the repair network to do that. To enable certain types of repairs, resources have to be located in the repair network as well. The goal is to achieve the lowest costs over the life cycle of the product. Those costs consist of both fixed costs and costs that are variable in the number of failures. Variable costs include costs of hiring service engineers and transportation of components; fixed costs include costs for resources such as test equipment and tools. The number of spare parts that need to be stocked in the network and the availability of the installed base are not considered in the classical LORA, but in a spare parts stocking problem.

The spare parts stocking problem is generally solved using the decisions that result from the LORA as an input. The goal is to allocate spare parts inventory in a repair network such that a certain availability of the installed base is achieved against the lowest possible spare parts costs.

In practice, the joint problem of LORA and spare parts stocking is usually solved sequentially, as mentioned above. However, the quality of the total solution (LORA and spare parts) is not guaranteed in this way: when solving both problems sequentially, the LORA may result in the need to perform many repairs at a central location, since this means that repair equipment needs to be located at one location only. This implies that the installed base faces long repair lead times, which increases the amount of spare parts inventory. If repairs would be performed at the operating sites, we need more repair equipment, but less spares, to achieve the same target availability of the installed base. Therefore, we have been working on an integrated model, in which the higher costs of resources can be balanced against the lower costs of spares.