MRO Optimization - Best Practices for Effective Inventory Parts and Storeroom Management

In today's extremely competitive business environment, companies are searching for any and every way to increase efficiencies, decrease costs, and manage asset wisely. One of the critical areas of efficiency and cost management resides in a place that too many firms downplay as a simple "cost of doing business": the parts storeroom. There are countless examples of companies keeping maintenance, repair, and operations (MRO) parts inventories that are literally out of control - meaning that storerooms hold too many parts, have duplicate part codes for the same part, keep inaccurate counts of parts on hand, and hold parts that are just plain not recorded. In addition, too often parts storerooms operate with poor inventory control procedures, execute inefficient parts stocktakes, and generally have inadequate controls on parts purchases, usage, and flow. In a large plant with 6- and 7-figure parts lists, these poor management practices can add up to 7-figure dollar wastage annually. Combine that with the not-so-hidden cost of equipment down-time due to the absence of the proper repair parts and you find a major source of profit loss hiding in plain site (pun intended)! This paper addresses a set of critical management methods for getting a storeroom into tip-top shape - and keeping it there. Collectively, these methods are called MRO Optimization. Many of these management options involve simple common sense; many involve the power of computer processing to aid in organizing a storeroom for maximum efficiency. Together, these tools and processes offer a timely opportunity to gain bottom-line profits without radically changing normal business practices. Gains can be found immediately in the areas of: