Research & Best Practices

MRO Inventory Management: Aids in Reducing Maintenance Costs


Cost-consciousness has always been a priority for manufacturers. In an industry where even one unforeseen event – like an equipment shutdown or a delivery delay – can derail a project’s entire budget and timeline, the need for tight control over processes is well-recognized.

In times of uncertainty, cost management is even more critical, as margins grow thinner and order pipelines become more difficult to fill. By remaining vigilant and cost-conscious, manufacturers can take steps to insulate themselves as much as possible from downturns and uncertainties. Manufacturers can manage costs by taking preventive measures to reduce and avoid downtime as much as possible, and by ensuring that equipment is operational and productive. One effective — though sometimes overlooked — method of maximizing uptime is to optimize the facility’s MRO inventory management. Prioritizing this key area can play a major role in reducing maintenance costs, improving inventory management and shielding the overall bottom line as much as possible. Below, we’ll look at how to reduce maintenance costs through effective MRO inventory control and management.

Reducing maintenance costs through MRO inventory optimization

Improving inventory management offers a number of benefits, including reducing maintenance costs, boosting productivity, shortening downtime and streamlining dependent processes throughout the operation.

These benefits are achieved through:

  • Availability of parts in stock when needed: If neglected, inventory management systems devolve into disorganization and confusion. One manifestation of this confusion is that spare parts are less likely to be available when needed — often at the most critical times. This leaves the facility with two options: unplanned downtime until the right parts are delivered, or an expensive rush order. By simply making sure the right parts are available, MRO inventory control can reduce or eliminate these unnecessary costs.
  • Prevention of part damage and unsuitability: Spare parts and components are susceptible to damage in numerous ways. For instance, they may be mishandled or stored incorrectly. When inventory is improperly managed, excess spares may linger on the shelf for too long, surpassing their rated useful life or deteriorating due to poor conditions. In these scenarios, the investment in these parts is wasted, as they must be discarded and replaced.
  • Keeping bills of material up-to-date: An equipment bill of material lists the spare parts and components required for maintenance, both planned and unplanned. These bills are used for spare part ordering, and thus must be kept up-to-date through any equipment updates or changes in order to guarantee that the right parts are on hand when needed. This prevents unnecessary downtime as well as the need to rush-order parts.
  • Eliminating confusion over inventory counts and locations: One of the most damaging qualities of a poorly managed MRO system is a lack of control over inventory. Whether through insufficient storeroom security and ownership, inadequate paperwork and accounting, or simple disorganization, mismanaged MRO leads to confusion — and ultimately, the need to reorder parts — when spares are expected to be on the shelf but aren’t. A dedicated MRO practice includes comprehensive storeroom management to prevent these problems.
  • Managing and predicting inventory demand: A comprehensive MRO plan includes scanner equipment for more accurate forecasting of part requirements. With greater insight into real inventory needs, the facility can reduce inventory footprint and costs through increased accuracy in order timing.
  • Improving inventory logistics: As in a retail setting, each interaction with inventory can be considered a “transaction,” and it has the applicable operating costs: personnel, resource time, overhead and more. By analyzing these transactions at the aggregate level and optimizing the level of “service” provided in each transaction — such as speed and accuracy — MRO management can improve repair times, reduce logistical costs and streamline processes.
  • Analyzing the supply chain: With a dedicated MRO plan, you can gain insight into supply chain data and forecasting, as well as supplier optimization. While this type of research and sourcing effort requires a commitment to an investment, it can yield significant benefits in ordering efficiency, favorable pricing and anticipation of (and reaction to) supply chain disruptions.

At ATS, we offer comprehensive plant maintenance solutions, including MRO inventory management programs specifically designed to improve uptime, increase productivity, streamline inventory processes and reduce costs. For more information, contact us today.

Let’s Talk

This field is for validation purposes and should be left unchanged.