An MRO inventory optimization builds a certain level of credibility, which is sustainable and helps in sharpening the company’s competitive edge. Looking after the management of the MRO spares and other consumables inventories with proper optimization technologies and practices produces measurable advantages.
Beyond just getting the right materials and parts at a right time, you need to get MRO inventory solutions to help you reap huge cost savings and provide higher operational efficiencies. Better inventory performance means that you will meet and exceed reliability, production targets, and safety. Before going ahead and checking out the best practices of MRO inventory optimization, take a moment to know what MRO inventory is.
What’s MRO inventory?
Maintenance, repair & operation supplies, or MRO are equipment, materials, and supplies that are used in a production process at the manufacturing plant and aren’t part of their finished goods or products being produced. The optimized inventory develops a constant improvement loop that will produce sustainable results with time and driving asset performance, advantage, and positive results.
MRO Inventory Optimization will include:
- Maintenance spares are used for responding to unplanned breakdowns or scheduled maintenance.
- Operating supplies required to keep its maintenance processes working smoothly.
- Spares held by original equipment manufacturers or OEM to service the tools you have bought from them.
- Inventory used by the suppliers becomes your inventory
Taking a little time for MRO inventory management effectively will lead to cost reductions & savings. Let us look at the top 7 best practices when developing a proper plan to manage the MRO inventory.
1. KPI or Key performance indicators
Like with any operation management, KPIs must be held to measure important factors like costs, savings, and obsolescence in the MRO project. It’s very important to check how effective these organizations MRO management is so upper management will not just understand its progress, but see several benefits.
Some measures to look at will include the number of stock, days, and months of inventory and rush orders ratio to replenishment the orders. All these measures must be tracked & posted to make sure those responsible will see the performance and act to improve the performance as required.
2. Identify & Track KPIs.
You cannot reliably check the success of your procurement if you do not have any benchmarks or standards. KPIs offer you crucial information, which makes the benefits of the initiative very clear to the upper management or other stakeholders in the monthly and quarterly reports.
3. Streamline Procurement
When your inventory gets cataloged and well-located, create the schedule for the equipment downtime and order enough quantities that will keep your systems to work at the optimal efficiency without keeping check of the unnecessary inventory. You will find forecasting and budgeting are improved to a higher extent, as you can identify buying patterns accordingly.
4. Importance of Batch Tracking
Batch tracking also referred to as lot tracking is a kind of process for tracing goods all along its distribution chain by using the batch numbers or signs. A “batch” generally refers to a set of products that were made together and used similar materials.
You can use automatic batch tracking to enter the information about the products in your batch – and keeping the information easily if you ever need to access this fast, as in a case of the product recall.
5. Streamline Your Stocktake
The process of streamlining the stocktaking can help you to mitigate the probability of your staff doing costly mistakes. The well-planned stocktaking process can include various steps needed to keep the staff working efficiently for uncovering any discrepancies or inaccuracies when keeping them focused and engaged.
6. Ease off during the slow seasons
With demand forecasting services, you will determine your low and high seasons. It can affect your production cycles. In the low seasons, you can lower the resources that are allocated to the MRO inventory in case items aren’t being used.
7. Buy strategically
The important part of inefficiency is when the teams fail in communicating cross-functionally. This same MRO product will be needed over multiple teams for various purposes. You can use the inventory management solution where managers will look at the purchase orders before going out, and edit any orders based on what the team needs or benefit from the discounts & cost-saving that come from the bulk orders.
MRO inventory is crucial and unavoidable in the operations of any business. The small businesses ignore MRO inventory management until it is very late and have overhead costs.