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"Criticality" for $1000, please.

How is "criticality" used?

The word “criticality” is often used out of context within manufacturing. I often hear someone say, “that is critical” when talking about spares or assets on a production unit. The word "critical" gets flippantly thrown around and creates confusion. "Critical" is a word that must be used in conjunction with other words, and its context should be well understood.

The confusion typically starts when discussing spares on bottleneck and non-bottleneck production units. The discussion references value within attributes such as safety, redundancy, product flow, dependability, and quality to name a few. The argument leans too far into the word critical and not its context. When this happens, these discussions tend to fall apart. Let’s settle this once in for all.

Criticality Analysis - How much is too much

There are two completely different things here to consider. One is a critical asset which is determined from a criticality analysis. Depending on your organization and the energy you are willing to devote to conducting a criticality analysis, the task is to conduct this analysis at a specific layer within an asset hierarchy. For each incremental layer, you are going deeper into your asset hierarchy, you will exponentially increase the number of assets to conduct the criticality analysis against. In most asset hierarchies, each parent-child relationship on average is around 10, so for each layer, you go down, and expect roughly 10 times more assets to evaluate to get the asset criticality.

But how do we decide what makes a piece of equipment “critical”? In short, it all comes down to risk. Performing a criticality analysis allows you to understand the potential risks that could impact your business. - Sarah Bellstedt,

There are plenty of best practices and references available that help conducts a criticality analysis. Most encompass a rating system that could be weighted on subjects or values that are critical for the organization. Things such as safety, redundancy, reliability, impact on the product flow, and risk to the corporate image are some common examples. Most organizations that succeed at having a good criticality analysis, make these categorizes with quantifiable rankings. Safety for example might indicate recent quantities or severities of recent safety incidents or hazard assessment rankings. Quality on the other hand might indicate attributes that give the assets proximity to the produced product. Regardless, these rankings are typically added or averaged together and ranked accordingly against all of the assets. The final output is the ranking of the most critical to the least critical assets, typically ranked on a scale of 1 to 10 or 1 to 1000.

Spares Criticality - Having the right parts, at the right time, in the right condition

The second use of the word critical is when denoting a specific spare. A critical spare is typically a part that can shut your entire operations down, it most likely costs a lot of money, probably has a long lead time (or is obsolete), and everyone is typically aware when you pull it out of inventory. These four categories might sound vague or subjective, so they have to be quantified.

1. Impact on the operations

To help measure the impact on your operations, this typically can be done with the results of the criticality analysis scoring. You already conducted this assessment, so leveraging it as output is advantageous for ensuring its accuracy. There is a laundry list of ways to use this criticality analysis, yet applying it to evaluating what spare is critical or not is sometimes missed.

2. Calculation of Lead Time

From a lead time perspective, consider “bucketing” your lead times. Most computerized maintenance management systems (CMMS) have a lead time calculation and weigh recent and previous purchase orders. Using this, you have an accurate reflection of referencable lead times. A spare part with a 1 day lead time would be ranked tremendously less than a spare with a 1 year lead time. Regardless, you should be able to create an index ranking of these values. Consider using the same scale (e.g. 1 to 1000) as your criticality analysis.

3. Cost of the spare

Now for the cost, using the same thought process as the lead time. You most likely have spares that cost $1 on an asset, and others that may cost $1M on an asset. Again, you can index these costs to rank them on a similar scale (e.g. 1 to 100, 1 to 1000) as your criticality analysis and lead time. This index is directionally correcting the impact of using this spare on your finances while also connecting to how high on the organizational hierarchy authorizes the spend.

4. Notifying that it was used

Now for the hardest one, the acknowledgment that everyone knows when it is used. The best way that I have seen this work is to evaluate the number of times the part has been issued out of the spare inventory. Consider something like if it gets issued once per year, it gets a rating of 100. But if it gets issued one time per 10 years, it gets a rating of 1000. This is weighing how rare this spare is getting issued from inventory and quantifiably measuring “how often everyone has to know about it.”

It is important that we clearly define the attributes that make various parts uber-important. We have to take subjective characteristics and agree on the level of significance each has, relative to the part being present in our storeroom. Convert subjective to objective. -

Now that you have the four values of the critical spare, weigh them or find their average. Ranking these in descending order gives you the visibility of the most critical to the least critical of spares. One thing to remember is that this addresses just the ranking of spares from a criticality perspective. To address how many spares you need, consider a previous blog called Using algorithms for spares management. Easy, right?

Using the term correctly now

As you can see there are two significantly different areas where we use the word “criticality” and both are completely different. One is focused on prioritizing the importance of the assets and the other is looking at the attributes of maintaining an inventory. Clearly articulating the importance of these two to your mission and how you use their calculated values is what aligns your strategy to your asset management plan.



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