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Inventory: Low-Hanging Savings

Article by Andy Gager of Marshall Institute - Posted by Facilities Net - Read Article on Facilities Net Website

Part 1: Inventory: CMMS Captures Critical Data
Part 2: CMMS Data Helps Managers Make Inventory Decisions
Part 3: Inventory Strategies: Vending Machines & RFID
Part 4: Inventory Management: Lessons From Industry

CMMS Data Helps Managers Make Inventory Decisions


Managers will have a greater chance of successfully managing inventory if they can minimize decisions based on emotion and make more decisions based on real-life data. Much of the data they need exists in the CMMS database, and it can provide answers to several important questions:

What is the right part? Managers can answer this question by looking at the equipment bill of materials, the original equipment manufacturer list, nameplate information, work-order history, or the contractor-work history. They can document all of this information in the CMMS item-master registry to ensure the department procures the correct materials.

What is the right quantity or stocking level? A number of modifiers determine the correct stocking levels. Most organizations use minimum and maximum levels or calculate economic order quantities. These figures should relate to historical use, consumption rate and lead times. Instead, most facilities base minimum and maximum stocking levels on emotions.

Managers also must identify and stock critical spares or insurance spares. Technicians tend to hold these critical items in reserve because the possibility of a stock-out is too great a risk. Managers have access to several tools that can identify critical spares and eliminate the mindset that everything is critical. Analyzing the historical use and work-order history can help managers determine the right amount of the MRO items, replacement parts, and maintenance products.

What is the right time? Departments that operate in a reactive-maintenance mode tend to have high levels of inventory because of this firefighting mentality. Moving toward a planned work environment reduces the chances of stockouts, and it allows managers to bring materials in at the lowest cost of acquisition.

What is the right cost? The supply chain can be the heart of the maintenance organization, or it can be the heart attack. The way departments manage this process is a key component of their success. A stocking program, whether vendor managed or consigned, is a valuable practice for managers to optimize. The best departments have 25 percent of their total inventory on some type of stocking program.


Part 1: Inventory: CMMS Captures Critical Data
Part 2: CMMS Data Helps Managers Make Inventory Decisions
Part 3: Inventory Strategies: Vending Machines & RFID
Part 4: Inventory Management: Lessons From Industry

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