Why you should be using a preferred vendor list

A well-managed preferred vendor list can enormously impact the economics and reliability of your plant.

By Fred Gregory, Lubrizol, for Chemical Processing

A typical plant has a wide variety of instruments and equipment. At a larger facility, a number of different people may specify and purchase these devices. Without guidance, this quickly can lead to the use of a host of diverse brands, models and even technologies for similar applications on the site.

Such a situation can create a nightmare for spare parts inventory and for the people responsible for maintaining these devices. To minimize such issues, the best practice is to develop a preferred vendor list with designated brands for given applications. Once established, the facility then can stock parts for these brands and train staff on how to maintain and repair the specific vendors’ devices. With the promise of enough business, vendors often may agree to provide repair training and to stock parts locally or even on site. This saves the facility both in training and inventory costs.

Spare parts inventory can incur significant cost. A rule of thumb is that any part stored for three years or more has been paid for twice, once when it was originally purchased and a second time through inventory carrying costs. Clearly, keeping the plant operating requires some spare parts — especially ones that are critical to the unit but aren’t readily available and require a long lead-time.

One of the best ways to reduce inventory costs is to standardize common parts and instruments to the greatest extent possible. Always remember that purchasing a lower-price alternative for a project may end up costing significantly more if it’s the only one of its kind on the site.

To learn more, read "Minimize Supplier Mayhem" from Chemical Processing.

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