In today’s manufacturing environments, smart inventory management strategies are critical. When managed appropriately, the maintenance repair and operations (MRO) process can operate with minimum waste while driving maintenance efficiencies.
Many manufacturers base their inventory decisions on price alone—yet the actual metric should be Total Cost of Ownership (TCO), which not only takes into account the price of parts and materials, but also the impact on plant performance. With this in mind, there are four spare parts inventory control optimization factors to keep in mind when adjusting your storeroom and MRO practices for overall equipment effectiveness.
The first of four manufacturing inventory control techniques is proper analytics. Analytics help determine what inventory items to plan for, and are one of the most effective inventory control methods in manufacturing. Two techniques are useful in making decisions that ensure both efficient use of capital and maximum uptime. The first, pareto analysis, identifies the 20% of parts that drive 80% of business risk; i.e., those which have the greatest potential to impact production output.
The second technique, ABC analysis, is about cycle count control and use of working capital, where items are divided across three levels of critical importance. Stratifying parts lists along these lines will help optimize cycle counts and re-order points, and thereby minimize carrying costs.
2. Site optimization
Just as important as which parts to keep onsite is where they should be stored. In some factories, the parts storeroom is hundreds of yards away or even outside the plant itself. It may not be practical to maintain a storeroom close to the action, but staff utilization is certainly something to consider. Here, the 80/20 rule is useful. Place the most frequently used and critical parts close to their applicable machines; for less important parts it may be possible to store items offsite. Common naming conventions and parts numbers can help in this regard by enabling parts with similar uses to be located and delivered quickly.
3. SLOB inventory disposition
In many facilities, too much capital and storeroom real estate are consumed by slow-moving and obsolete (SLOB) parts. Ridding the storeroom of SLOB inventory starts by looking at turns. If parts are slow-moving, expensive, and not mission-critical, consider maintaining them at another plant or with the supplier to ease the maintenance inventory control burden on your staff.
Meanwhile, when factory equipment is replaced or re-designed, MRO parts and components can change and become obsolete. In these cases, resell, recycle or scrap the orphan parts. Brokerages can help in many cases by buying old parts and reselling them, oftentimes capturing some value for the plant.
4. Vendor-managed services
Vendors can be a quality partner in your MRO and spare parts inventory control strategy. Strong suppliers will often voluntarily stock inventories of parts with long lead times. Making use of this service, as long as deliveries are quick, will reduce needless inventory “insurance investments” and will help keep parts from wearing out on the factory shelf (since turnover for vendors is usually more frequent).
Some suppliers also offer vending machines for common and/or routine parts. Wirelessly connected, these machines issue parts by smart card activation, improving and speeding MRO inventory control. By placing parts vending machines throughout plants where they’re most needed, technicians get parts faster and storeroom clerks reduce their workload. It’s impossible for technicians to perform their duties without a ready supply of parts. When those parts are planned, purchased and deployed with TCO in mind, the highest value is derived from equipment and personnel alike.
Take the time to carefully consider inventory management. The benefits of parts inventory control will accrue today—and well into the future. To learn more about inventory management and data collection techniques, check out our whitepaper here or contact us for assistance in increasing the efficiency of your MRO processes.