Spare parts management is one of the most underestimated disciplines in hydro O&M. Get it wrong in one direction and you run out of critical parts during a breakdown, causing days of lost generation. Get it wrong in the other direction and you tie up hundreds of thousands of ringgit in slow-moving inventory that may never be used.
Having rebuilt spare parts systems at multiple hydro plants — including a full inventory restructure at Telekosang Hydro — our team at EOM has developed a practical framework for getting this balance right. This article shares that framework.
Classify Your Inventory Using ABC Analysis
Not all spare parts deserve the same level of attention. ABC analysis categorises parts by their impact on plant operations, allowing you to focus your resources where they matter most.
| Category | Definition | Stock Policy | Examples |
|---|---|---|---|
| A — Critical | Failure causes immediate plant shutdown. Long lead time or single-source supplier. | Always maintain minimum 1 unit on-site. Review quarterly. | Runner seals, main transformer bushings, governor actuators, excitation components |
| B — Important | Failure causes degraded operation or partial shutdown. Moderate lead time. | Maintain agreed minimum stock level. Review half-yearly. | Bearing sets, oil pump motors, control relays, protection fuses |
| C — General | Failure manageable without immediate shutdown. Short lead time or locally available. | Reorder on consumption. No minimum stock required. | Fasteners, gaskets, lubricants, general electrical consumables |
"Most plants we have reviewed stock too many Category C items and not enough Category A items. The expensive parts sit in the storeroom; the critical parts are out of stock when needed."
Set Minimum Stock Levels Based on Lead Time, Not Habit
The most common error in spare parts management is setting minimum stock levels by gut feel or copying what the previous team did. Minimum stock should be calculated based on:
- Lead time: How long does it take to receive this part after ordering? Include customs clearance for imported components.
- Consumption rate: How often is this part used? Check your work order history for the last two years.
- Criticality: What is the cost of being without this part for one day, one week, one month?
- Availability: Is this part available locally, or does it require the OEM to manufacture it?
For Category A parts with lead times exceeding 12 weeks, we typically recommend holding a minimum of 2 units on-site regardless of consumption rate. The cost of storage is negligible compared to the cost of a 12-week unplanned outage.
Maintain a Living Inventory Register
An inventory register that is only updated during annual audits is not a register — it is a historical document. Your inventory register must be updated in real time with every issuance and receipt.
At minimum, your register should capture for each item:
- Part number and description
- Equipment it applies to (asset tag / tag number)
- Current stock quantity and location in store
- Minimum stock level (reorder point)
- Supplier name, contact, and lead time
- Last received date and last issued date
- Unit cost
A simple spreadsheet maintained diligently outperforms an expensive CMMS that nobody uses. Start simple and build complexity only as your team's discipline with the tool grows.
Conduct Physical Verification Quarterly
Inventory registers drift from physical reality over time — parts are borrowed, incorrectly issued, or stored in the wrong location. A quarterly physical count of all Category A and B items takes a half-day and prevents the painful discovery during an emergency that the "one unit in stock" is actually missing.
Quarterly verification checklist:
- Count all Category A items — verify quantity matches register
- Check condition — inspect for shelf-life expiry, corrosion, or physical damage
- Verify storage conditions — temperature, humidity, contamination for sensitive items
- Check that all items are correctly labelled and tagged
- Update the register immediately if discrepancies are found
Build Relationships with Suppliers Before You Need Them
When your generator is tripped and you need a specific relay urgently, it is not the time to start building a supplier relationship. Pre-established relationships with key suppliers are a genuine operational asset.
Practical steps:
- Identify your top 10 critical suppliers — the ones whose parts would cause the longest downtime if unavailable
- Establish account relationships — visit in person at least once, get a dedicated technical contact, not just a sales line
- Negotiate emergency supply terms — what is their committed lead time for emergency orders? What does that cost?
- Keep supplier information current — companies restructure, contacts move; review your supplier list annually
- Explore OEM spare parts programmes — some turbine manufacturers offer consignment stock arrangements worth exploring for Category A items
During the Telekosang turbine overhaul, a pre-existing relationship with a bearing supplier allowed us to source a custom-sized thrust bearing with a 3-week lead time instead of the standard 14 weeks. That single relationship saved 11 weeks of outage time.
Start Simple, Stay Consistent
You don't need sophisticated software to manage spare parts well. You need a clear classification system, accurate minimum stock levels, a register that is actually maintained, and regular physical verification. These four elements, applied consistently, will give you 90% of the benefit with 10% of the complexity.
The remaining 10% — advanced analytics, predictive reordering, supplier integration — can come later once the fundamentals are solid. We have seen too many plants invest in expensive CMMS systems while the basics are broken.
If you have questions, or want to share how you manage spare parts at your plant, please leave a comment below.
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