Carrying a spare part within the facility’s storeroom seems like a simple strategy not requiring much thought. But a second look at internal stocking options reveals there is much to consider in setting optimal stocking levels. Several strategies need to be considered. The use of free issue stock, vending machines, and vendor managed inventory are potential strategies that control cost, reduce transaction work load, and reduce consumption, while ensuring spare parts availability.

It is true, you cannot manage what you do not measure. But Key Performance Indicators (KPIs) can be detrimental to an operation if not properly established. KPIs need to be top-down driven. First and foremost are enterprise KPIs that support an organizations mission. All facility, functional, departmental, and individual KPIs need to support those enterprise KPIs. Too often, departmental or functional KPIs can work against each other. A PCA consultant once encountered a situation where the plant manager had two conflicting KPIs ...

The question is often asked, “What makes the perfect storeroom?” Is it brick and mortar? Is it the correct financial ratio of storeroom inventory to facility asset value? Is it a certain measurement of inventory turns? Is it a certain ratio of personnel to inventory value? While it can be argued that any one of, a combination of several, or all of the above are important, the perfect storeroom consists of a combination of strategies working together to assure the operations have ...

A cross-functional, multi-disciplined team that focuses on MRO issues is a must. MRO inventory management is too often thought of as just a storeroom function. In reality, it is a horizontally, cross-functional activity involving, maintenance, operations, capital projects, procurement, and stores. At PCA we promote what is referred to as an MRO Focus Team. This team consists of personnel from accounting, maintenance, maintenance planning, manufacturing, capital projects, purchasing, reliability, and the storeroom who represent their function’s concerns with parts availability ...

Some Key Performance Indicators (KPIs) can be misleading, if you only see part of the picture of inventory health. Inventory reporting as a financial matrix is required by shareholders and, in most cases, by the laws of business operation. But only reporting inventory value (which is an accounting average of overage and underage) can have disastrous consequences. Reporting a benchmark financial value of 98% accuracy is of little concern to operations and maintenance if a critical part is not available when needed ...

Effective MRO (Maintenance and Repair Parts and Operating Supplies) materials management is simply a derivative of the time-honored function of Supply Demand Planning. Day one in Econ 101, the professor presents a graph explaining the supply demand continuum. That same simple concept applies to MRO parts management. There is certainly the supply aspect; does the storeroom have what is needed when it is needed? But the key to having what is needed, when it is needed, is dependent upon robust demand-side signals ...