The ability to predict and prevent equipment failures is essential for managing a manufacturing process. Once failure symptoms are detected, timely maintenance needs to be performed with the support of required spare parts. However, the availability of spare parts often becomes the bottleneck of process throughput, and sometimes expensive emergency orders of spare parts have to be placed to meet a production due date. This paper addresses a joint production and spare part inventory control strategy driven by condition based maintenance (CBM) for a piece of manufacturing equipment with a critical unit. Specifically, the amount of degradation of the unit is monitored continuously during operation and used to drive replacement actions and spare part inventory control under both production lot size and due date constraints. A degradation limit maintenance policy and a base-stock spare part inventory control policy are integrated to manage the manufacturing process. The objective is to ascertain the service level for spare parts while minimizing the total operating cost. To determine the optimal base-stock level of spare parts and maintenance threshold, a two-stage approach using constrained least square approximation and simulation-based optimization techniques is developed. An automotive engine manufacturing process is provided to demonstrate the use of the proposed decision making strategy.
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