Author: Ethan Wilke

In many organizations, the word “audit” evokes feelings of annoyance, anxiety, and fear. In reality, audits are not as bad as they are made out to be. By understanding how maintenance audits work, you will see why maintenance audits are nothing to fear, especially if you are using computerized maintenance management system (CMMS) software.

What is a Maintenance Audit?

A maintenance audit is a systematic, comprehensive review of an organization’s maintenance processes and/or systems. It evaluates how well maintenance activities and their related results conform to set standards. Through a review of objective evidence, auditors determine whether maintenance procedures meet requirements, are effectively implemented, and are appropriate to reach desired outcomes.

Maintenance audits are usually conducted as a part of quality or health and safety audits. Quality audits verify an organization’s compliance to industry standard specifications or procedures. Health and safety audits determine whether a product is safe and whether the maintenance process has kept products from being contaminated or damaged.

The Importance of Maintenance Audits

Maintenance audits are an effective business tool. First, they provide a true picture of plant activities that allow the organization to set benchmarks for operations. This baseline data is compared to what should be done. If differences exist, the organization can implement solutions to address them.

Audits also protect an organization from liability. They are an integral part of a well-designed system to ensure end products are safe for consumers. Regulatory and compliance audits compare processes to industry standards. Safety audits help organizations reduce the risk of workplace injuries and health hazards.

A third reason maintenance audits matter is because they hold organizations accountable. Audits are usually conducted by third parties who understand the business or industry standards, and bring an outsider’s perspective to an organization’s operations. Their unbiased, objective approach ensures the integrity of the results.

Types of Maintenance Audits

There are several types of maintenance audits: mandatory, voluntary, and internal. Mandatory audits are required by law and carried out by governmental agencies that oversee an industry. Maintenance processes may be reviewed as a part of these audits. For example, the U.S. Food and Drug Administration audits the pharmaceuticals industry to ensure compliance with manufacturing processes according to their Current Good Manufacturing Practices (CGMP), Title 21 Parts 110, 111, and 211.

Voluntary audits are used to obtain certification that provides an organization with a competitive advantage. The International Organization for Standardization (ISO) 9001 certification, for example, demonstrates an organization’s commitment to being best in class and providing high quality products and services. Though this certification is voluntary, some organizations require that their business partners also attain certification. Safe Quality Foods (SQF) certification in the food and beverage industry is another example.

A third type of maintenance audit is an internal audit that is part of a continuous improvement plan. Organizations perform regular internal audits to ensure that their maintenance processes remain effective as maintenance operations change over time. Results of these audits are compared against internal company codes and policies, requirements of contractual commitments, and other key performance indicators.

What Happens During a Maintenance Audit?

No matter what format the audit takes, auditors check how well your standard operating procedures (SOPs) adhere to established best practices. They look for evidence that you: 1) say what you do, 2) do what you say, and 3) can prove it. Auditors verify your compliance through fieldwork in the form of observation of maintenance processes, employee interviews, and a review of the documentation system or CMMS.

What Do Auditors Examine?

Maintenance audits cover a wide swath of maintenance functions. According to Manufacturing.net, maintenance audits are broken down into several categories:

• • Maintenance organization
  • Maintenance practices
  • Equipment maintenance
  • Safety
  • Planning and scheduling
  • 5S
  • Cooperative maintenance
  •  Training
  • Document management
  • Maintenance inventory and purchasing

How Often Do Audits Occur?

Whether an organization is audited at all depends on the industry in which the organization operates. Generally, most maintenance audits are conducted in manufacturing or regulated maintenance services, such as airline maintenance. The frequency of audits depends on the auditing agency.

Audits may be scheduled or come as a surprise. For example, the FDA performs both announced and surprise audits. Audits may become more frequent if there have been past shortcomings or failures. Internal audits are conducted at the discretion of the organization and their quality team. In extreme circumstances, audits may be called for as part of an investigation following workplace injuries or when products cause unintentional harm to consumers.

How to Pass a Maintenance Audit

Maintenance audits aren’t something to fear. After all, millions of companies pass audits every year, so there is no reason to stress. Organizations that use a CMMS find that much of what auditors want is readily available.

Furthermore, maintenance audits are actually a good thing. They ensure that the organization is providing safe and effective products and services. Complying with regulations or achieving a certification informs the public that the organization is committed to high-quality standards. Ultimately, these benefits make your organization’s products more attractive and profitable.

Follow the steps below to make your next audit quick and painless.

Read more about how a CMMS prepares you for compliance audits

1. Implement a CMMS

Having a CMMS is a huge advantage when it comes to providing the documentation required by audits. The most important piece of documentation is the work order which tracks maintenance activities from start to finish.

During creation, standard operating procedures are communicated to technicians in the form of tasks. The work order’s task list provides step-by-step instructions for completing the job. When work is executed, technicians can mark tasks as complete, as well as document other information such as how much time was spent and what parts were used. Closed work orders create a history that shows work was completed according to the assigned procedure.

If you do not currently own a CMMS, now is the time to consider getting one. You will need time to identify and purchase a system, train users, and integrate the CMMS into daily maintenance operations. We have created a definitive guide that walks you through the process of CMMS acquisition and implementation.

2. Prepare Your CMMS

Your CMMS must demonstrate and reinforce your maintenance process. In preparation for an audit, make sure that procedures are up-to-date and inclusive of all operations, such as lockout-tagouts and any procedure that proves compliance with quality or health and safety issues.

Further, check that all maintenance work is documented in the system. Basically, if it isn’t documented, it didn’t happen. This includes updating work orders with all tasks that have been performed and marking those tasks as complete.

Some systems include features that automatically track user activity, providing further proof of what was done and who did it. If your organization uses a work order approval process, make sure it is recorded and that employees can find that documentation.

3. Prepare Your Team

As mentioned earlier, maintenance audits involve interviews with employees to make sure that they know how to do their jobs. Therefore, you must prep your team for these interactions.

Coach your team to answer auditors carefully and have them refer to SOPs if needed. This can be as easy as instructing technicians to say, “I do what the work order tells me.” If the auditor requires proof that procedures have been followed, technicians can simply pull up the work order history in the CMMS.

Auditors also verify that employees are properly trained. Expect auditors to ask employees to demonstrate how they use the CMMS to view asset records, access maintenance documentation, and complete work orders.

4. Tidy Up

Audit preparation is the perfect time to make sure everything is in order. That includes ensuring the physical facility is clean, organized, and presentable.

Areas used by the maintenance team, such as offices, repair areas, and inventory storage locations should be neat and well organized. Facilities should be reasonably clean and free of clutter. Address any other safety or housekeeping issues as well.

Fear Not!

By now, you can see why maintenance audits are nothing to fear. Let’s return to an auditor’s criteria to see how a CMMS fits in:

• Say what you do: Document your standard operating procedures and other maintenance policies in the CMMS.
• Do what you say: Train users how to use the CMMS effectively. Ensure that users check off their tasks and record their work. Remember, if it isn’t documented, it didn’t happen.
• Prove it: Close work orders to create a maintenance history.

When it comes down to it, organizations that consistently use a CMMS have an easier time passing maintenance audits.

Prepare for Your Next Audit with FTMaintenance

FTMaintenance is a CMMS that provides a single platform for documenting, tracking, and managing maintenance activities. It allows you to digitally track information about your assets, MRO inventory, work orders, and labor resources in a centralized location. When audits occur, information stored in FTMaintenance is readily available. Request a demo today to see how FTMaintenance can help you pass your next maintenance audit.

Assets are essential to the valuation and operation of a business. Understanding how assets contribute to (or detract from) the bottom line helps organizations make strategic business decisions.

The maintenance team plays an important role in preserving and protecting the assets that enable the business to succeed. This article provides an overview of assets and the role maintenance plays in managing assets that promote positive business growth and performance.

Learn more about maintenance management.

What is an Asset?

In financial accounting, an asset is a resource with economic value that is bought or created to provide value or benefits to an organization. Maintenance management is responsible for what are called tangible assets.

Tangible assets are assets that can be physically touched, such as buildings, machines, and furniture. They are also called “fixed” assets because, in addition to being physical items, they are long-lasting and not consumed in the normal order of business, making them permanent fixtures of the business.

The assets serviced by maintenance are referred to as “property, plant, and equipment” or PP&E. Property refers to land and buildings. Plant describes places in which goods are manufactured. Equipment includes the apparatuses used to produce goods or deliver services. The following section contains examples of these types of assets.

PP&E assets fall under the scope of maintenance management because they must typically be maintained and are, with the exception of land, regularly repaired or replaced. For example, an organization might repair a leaky roof or replace a worn-out conveyor system.

Types of Assets

There are several types of assets that can be categorized as fixed assets. Depending on the industry or organization, maintenance teams are responsible for servicing one or more of the following types of assets.

Land

As an asset, land is an owned, bounded piece of earth. Land includes the animal and plant life, bodies of water, minerals, and other natural resources on it.

Unlike other types of assets, land is considered to have unlimited use and doesn’t require the same type of maintenance as other assets. Maintenance performed on land assets are usually related to cosmetic or environmental concerns. For example, mowing the lawn improves the appearance of land. Landscaping or grading mitigates water drainage issues.

Buildings, Facilities, and Properties

Buildings and facilities include any permanent structure that is part of a business. This ranges from standalone office buildings to manufacturing plants comprised of many buildings. Building and facility assets also include structures like parking lots, garages, pavilions, and so on.

Property is considered land and/or any buildings on it. For example, corporate farms maintain land that does not contain buildings. On the other hand, apartment complexes and college campuses are also examples of property.

Furniture

Furniture generally refers to items used to support human activity. It is movable, meaning it does not have a permanent connection to the building or structure. Examples of furniture include bookshelves, desks, and storage racks.

Fixtures

Fixtures are assets that are physically attached to a property that cannot be removed without causing damage. Lighting, HVAC systems, toilets, and sinks are examples of fixtures.

Equipment and Machinery

This wide-ranging category includes any implements used in business operations. Equipment and machinery assets vary depending on the industry. For example, a manufacturer’s machinery assets may include lathes, presses, and conveyor systems. Facility equipment includes elevators, pumps, cleaning apparatuses, and lab equipment. Service providers use vehicles and specialized tools, which may be considered equipment or machinery assets.

Tools

Tools include items such as manual or powered drivers, saws, and hammers that make tasks easier. Many tools are simply replaced when they break, while expensive or specialized ones might be repaired. Tools are not to be confused with tooling, which are accessories mounted to a machine to make a specific item.

Vehicles

Vehicles transport people, products, materials, and equipment. Company vans, semi-trailer trucks, airplanes, and forklifts may be considered vehicle assets.

Why Do Assets Matter?

People generally get into business to make money; assets enable companies to do so. Companies purchase (or lease) assets at a cost and use them to produce goods or services which, in turn, generate revenue.

Assets are also an indication of a company’s value. Organizations that are earning money continue to grow through the addition of new assets or by optimizing the use of existing assets. A thriving business is an attractive opportunity to investors who may further inject funds into the business to help it grow.

How does maintenance management impact assets? The maintenance team is tasked with maintaining a company’s assets. To do so, the maintenance team must have sufficient information about assets available, such as their location and condition. Using this knowledge, maintenance teams create care plans that ensure assets are kept in optimal working condition.

Asset Management

An organization’s well-being is directly tied to its assets. Therefore, it is essential that organizations understand how much assets cost to purchase and maintain, their condition, and whether they are still working. Based on this information, organizations make decisions about their assets with the end goal of reducing costs and increasing revenue.

Asset management is the process of maximizing the value an asset provides in the most cost-effective manner. Asset management goes beyond just counting assets. It includes capturing data about an asset’s identity, location, specification, condition, maintenance, and cost.

Why is asset management important? Companies use asset data to evaluate whether assets provide value or are a net liability. The better a company manages its assets, the greater return they will receive from their investments. Below are a few ways businesses use data to manage assets.

Asset Tracking

Asset tracking is the process of documenting an organization’s assets. It involves recording information about each asset such as its name, serial number, manufacturer, cost, assigned owner, and other important information.

Asset tracking provides you with a vision of your assets. The process of documenting assets helps you identify the scope of assets you own and may even reveal assets that you either forgot about or never knew you had. Recording location data keeps assets secure by tracking their movement and preventing theft.

During documentation, assets are named according to an asset naming convention. They are given unique alphanumeric names along with brief descriptions. Identifying assets in this way ensures the same asset is not counted twice and that maintenance activities can be linked to a specific asset. This is especially useful when many similar assets exist.

Assets are also tracked via tags physically affixed to the physical asset. Asset tags typically include barcodes or QR codes. Using specialized software, asset tags can be scanned to provide real-time information to the maintenance team. Tags that incorporate Global Positioning System (GPS), Radio-frequency Identification (RFID), and Near Field Communication (NFC) technologies broadcast an asset’s location.

Asset Maintenance

Having comprehensive asset data allows the maintenance team to create appropriate care plans for a company’s assets. Factors such as current condition, criticality, maintenance history, and risk of failure help determine which maintenance strategy is used. Other factors, like downtime, meter readings, part availability, and cost to repair also determine what tasks are performed.

Maintenance strategies are either reactive or proactive in nature. With a reactive strategy, maintenance is performed after a failure has occurred. Proactive maintenance addresses the underlying conditions that lead to failure so that breakdowns can be avoided. For more information on maintenance strategies, read our article about the various types of maintenance.

Asset Depreciation

Depreciation is an accounting convention that allows organizations to more accurately spread out the cost of an asset over its useful life. The useful life is based on information provided by the manufacturer, assigned by the Internal Revenue Service (IRS), or approximated by a user.

Tracking depreciation allows the company to track how much assets are worth based on their expected useable life. In reality, an asset’s useable life is longer than what is typically accounted for via depreciation. This allows the company to generate income after the asset has been taken off the books.

Proper maintenance further extends an asset’s useful life. Maintenance management uses asset data to evaluate an asset’s condition and create an appropriate maintenance plan. Using computerized maintenance management system (CMMS) software, maintenance teams can efficiently plan and schedule maintenance activities.

Repair vs. Replace Decisions

Repair vs. replace decisions take into account an asset’s current value, useable life, and repair and replacement costs. Assets generally degrade over time. New assets are more valuable because they have been used less. Older equipment has less value due to extended wear and tear. When assets fail, organizations evaluate whether repairing or replacing the asset is more beneficial and cost effective.

The maintenance team identifies assets that are candidates for replacement. They may alert management of costly repairs and when maintenance costs on a particular asset are steadily rising. Based on the asset’s maintenance history, expected vs. actual usable life, and other asset data, the maintenance team makes a case for replacement or repair.

Further Reading: Asset Management KPIs

Asset Management Software

Manually documented asset data is prone to errors and inaccuracies. Assets are likely to be misidentified, creating duplicates or “ghost” assets that are documented but don’t truly exist. In addition, it takes too much time for employees to sift through asset data by hand.

To resolve these issues, organizations use computer software to track asset data. Spreadsheet software, such as Microsoft Excel, is a popular solution, but lacks the capabilities of dedicated asset management software. Ideally, asset data is documented in a CMMS or enterprise asset management (EAM) software.

CMMS software is specialized for maintenance management while EAM solutions can be used to monitor assets throughout their entire lifecycle. However, the lines between CMMS vs. EAM are becoming fuzzier.

Manage Assets with FTMaintenance

FTMaintenance is a CMMS solution that allows you to easily store, manage, and report on your company’s equipment and facility assets. Providing robust asset tracking and work order management features, FTMaintenance allows you to identify, monitor, and track asset maintenance. Request a demo today to see how FTMaintenance makes it easy to manage your assets.

An equipment bill of materials (EBOM) is extremely useful for asset-intensive organizations that rely heavily on proper asset and spare part management. However, creating an EBOM requires time, money, expertise, and a commitment from management, any of which may be lacking in a given organization. Further complicating the issue, valuable asset data is often scattered across several locations, in various electronic and hard copy formats, rather than stored in one place and format.

Despite these challenges, organizations must make a choice: either invest in the resources needed to build an effective EBOM and improve operations, or continue to suffer the consequences that arise from poor asset management.

This article is intended for organizations practicing robust asset management. It guides you through the process of creating, managing, and maintaining equipment bills of materials (EBOM). Organizations that require a simple bill of materials, such as one that will primarily be used for maintenance purposes, should read our companion article, How to Create a Maintenance Bill of Materials.

Note that throughout this article, we refer to an equipment bill of materials as an equipment bill of materials, EBOM, or equipment BOM interchangeably.

What is an Equipment Bill of Materials (EBOM)?

Within your organization, there may be a number of bills of materials (BOMs) that serve different audiences, such as engineering, asset management, manufacturing, and maintenance management. Each of these contains varying levels of detail, depending on who uses the information and how it will be used.

Typically, an equipment bill of materials (EBOM) defines the design or make up of an asset, such as a piece of equipment. The EBOM lists every part and material used on an asset, including specification, stocking level, and other features or characteristics.

Questions to Ask Before Creating an Equipment Bill of Materials (EBOM)

Creating an equipment bill of materials can take considerable effort, but is well worth it. There are many long-term benefits a proper EBOM brings, ranging from decreased downtime to simplified parts reordering and optimized stock management. Therefore, a systematic approach to EBOM creation ensures your time and effort are used efficiently.

The following questions prepare you for EBOM creation and make the process more manageable when the “real work” begins.

Who needs to use the EBOM?

Many parties throughout the organization may use the equipment bill of materials. Therefore, effective EBOMs contain relevant information for all stakeholders.

Think about which stakeholders will interact with the EBOM and how they will use it. Some examples are provided below. Keep in mind that a stakeholder’s role and responsibilities are unique to each organization.

Conduct an informal interview with each stakeholder to better understand what information they desire to see. Their responses will also help you identify the appropriate EBOM structure, as described in the next section, as well as what data should be included on the EBOM, discussed later.

How Should the EBOM be Structured?

Depending on the level of detail required, an equipment bill of materials may take many forms. Typically, EBOMs follow either a single-level or indented multi-level structure.

A single-level EBOM simply lists an asset’s components and spare parts. Each part is listed only once along with its total quantity for the asset.

A multi-level EBOM shows the hierarchy between an asset’s assemblies, subassemblies, and components. These parent-child relationships are usually visualized through indentation, showing which components “belong” to – or are organized “under” – each other. Unlike a single-level EBOM, parts in a multi-level EBOM are listed every time they are used by their parent item.

The feedback you receive from stakeholder interviews will help you determine which structure to use.

What System Will Be Used to Create the EBOM?

Due to the amount of information that will be included, think carefully about the best way to document and create the equipment BOM. Using paper and pencil will not work, as handwritten information is not easily edited and will likely need to be entered electronically to be useful anyway. Spreadsheet programs such as Microsoft Excel are popular and great for data collection and organization, but have limited collaboration capabilities, lack automation, and are cumbersome to use.

Many organizations build EBOMs using a computerized maintenance management system (CMMS). In fact, many CMMS solutions provide automatic EBOM creation, which streamlines some aspects of EBOM creation, maintenance, and management. Further, the speed, accuracy, and convenience of using a CMMS for EBOM management are far superior to other methods. Enterprise asset management (EAM) software may also be used.

Further Reading: What’s the Difference between CMMS vs. EAM Software?

EBOM Creation

The process of creating an equipment bill of materials involves multiple steps. When done in a systematic fashion, such as the process described below, EBOM creation is efficient and produces high quality results.

1. Determine which Assets need an Equipment Bill of Materials

In this first step, identify which assets need an equipment BOM and in what order you will create them. If you find that a large number of assets will benefit from an EBOM, you must prioritize EBOM creation. Start with the most critical assets. Critical assets are those that are integral to business operations and cost the most when they fail. Therefore, you will make the most impact by focusing efforts here first.

Once completed, you can repeat the EBOM creation process for similar assets, and assets that share the same assemblies, subassemblies, and parts. Depending on your organization, industry, and type of assets you own, one EBOM may cover multiple identical assets.

2. Decide what Items to Include on the EBOM

Set the parameters of what will and won’t be included on the EBOM. For example, if EBOM is created for the sake of making the maintenance team more efficient, you don’t need to list every nut and bolt that makes up the asset. In this case, only regularly serviced and replaced components may be listed, along with critical spares. EBOMs in highly specialized or heavily regulated industries may be required to contain more detail than in a standard maintenance organization.

At a minimum, include the following:

• Critical spares
• Anything that is reasonably expected to be repaired or replaced
• Anything for which it is beneficial for usage history to be tied to the asset

Stakeholder interviews also provide guidance as to what items are necessary to include.

You may have noticed that absent from this list are consumables such as towels, rags, gloves, and other supplies. While these items are used to perform maintenance, they are not part of assets themselves, and are therefore omitted from the EBOM. Work orders are a more appropriate place to identify what is needed to complete maintenance jobs.

Learn what should be included on a work order.

3. Determine what Data to Include on the EBOM

Finding the right amount of detail to include is important to the success of the EBOM. There is a delicate balance between providing enough information that the EBOM is useful, but not so much that is causes confusion. Conversations with key stakeholders should shed light on what information is important to have available.

At the most basic level, identify the part or component being used. This usually includes the item number and item name. Based on your organization’s needs, other information may be included. Below is a list of commonly used categories of information:

• CMMS part number
• Part number
• Part name
• Description
• Revision number
• Unit of measure
• Size
• Length
• Weight
• Quantity required by the asset
• Manufacturer
• Manufacturer part number
• Authorized substitutes/alternatives
• File availability (e.g., availability of drawings, CAD files, etc.)
• Other specifications or features

Information that is not available on the EBOM should be easily accessible in the CMMS. CMMS software centralizes maintenance data, and links important asset and inventory information together. This makes it quick and easy for users to navigate to appropriate records to find accurate information.

4. Collect Inventory Item Data

Effective equipment bills of materials rely on comprehensive, accurate data. Unfortunately, many organizations struggle with their data tracking practices. They either don’t track maintenance activities, have some data but don’t know if it’s accurate, or have data but lack the resources to do anything with it. Additionally, maintenance teams often do not reliably enter data in a CMMS or other maintenance management system.

Due to these reasons, data collection may be the most time-intensive step in the process. With that said, don’t overexert yourself trying to collect all the data at once. Refer to your prioritized list of assets from earlier and collect information for the most critical assets first. EBOMs for less critical assets can be created later, as long as they are done eventually.

Asset data can be obtained from multiple sources including:

• Equipment manuals provided by the original equipment manufacturer (OEM)
• Equipment suppliers or other vendors
• Drawings, schematics, and catalogs
• Similar assets and equipment
• Engineering change notices and redesign documentation
• Current or planned preventive maintenance (PM) work orders
• Previous unplanned work orders
• Work order history records
• Personal lists or cheat sheets
• Equipment nameplates
• Physical asset inspections
• Veteran employees and other “go to” workers

During data collection it is acceptable to store data in a spreadsheet. This information can be easily transferred into a CMMS after your data collection and review phase.

5. Review EBOM Data

As you collect data, take the opportunity to perform some “clean up”. You are likely to find information that is out of date or obsolete. If you encounter discrepancies, cross-check between multiple sources to ensure the most up-to-date information is being used. It is imperative that data is accurate because after this step, you will enter it into the maintenance management system for use by you and your team.

Read Also: CMMS Data Transfer Best Practices

6. Enter the EBOM Data in the CMMS

In this final step, enter inventory part data into the CMMS or other system. Some CMMS systems can automatically import part data, while others require you to do it manually. Either way, data entry should be performed by someone familiar with the CMMS who can accurately enter data into the required fields.

EBOM Maintenance

Equipment bills of materials are not “set and forget.” There are a number of events that require EBOMs to be updated in order to maintain their accuracy. Consider the events described below:

• Asset decommissioning and retirement: When assets are taken out of use and/or dismantled, an accurate EBOM identifies which parts are unique and can be sold or scrapped. Parts used elsewhere can be put back into inventory.
• Asset design changes: Assets that have been redesigned, refurbished, or otherwise modified may use new and different components. These items should be included in the EBOM, along with any alternatives.
• Part substitution: Due to availability issues, there exists a need to identify alternative parts that are viable substitutes. The EBOM or part record in the CMMS can show this relationship.
• Part standardization: To streamline inventory procurement and purchasing, parts may be standardized across similar assets or across plants. Amend the EBOM to show these changes, including effective start and end dates of new parts.
• EBOM review: EBOMs may go through informal or formal review throughout their lifetime. Informal reviews may happen as EBOMs are being used by those with specific knowledge about the asset. More formal reviews may be performed periodically by key maintenance stakeholders.

EBOM Management

To remain effective and accurate, EBOMs require a formal change management process. An out-of-control process – one in which anyone is allowed to make changes, changes are made without approval, or changes are made infrequently – can lead to disaster. Below are some EBOM management tips:

• Set clearly defined responsibilities and expectations for users. Make sure each person knows their role in using, maintaining, and managing the EBOM.
• Decide who is responsible for making changes to the EBOM. It is undesirable for everyone to be able to make changes. Limit editing capability to a small number of people.
• Ensure everyone is using the most up-to-date EBOM. Clearly label the EBOM, including titles, version numbers, and page numbers to reduce problems caused by using out-of-date information.

If your organization requires more intensive file change management, consider the following:

• Maintain a version history. Keep a copy of all versions of the EBOM in case you need to roll back to a previous version.
• Use a change log. A change log records what changes were made, by whom, and when. This makes it easy to identify what has changed from version to version. It also holds editors accountable for information added to or removed from the EBOM.

The activities described above are quite manual. A good CMMS automates EBOM maintenance and management activities. Some systems automatically build EBOMs when parts are issued against assets on a work order. In addition, updates to part records only need to be done once for it to be affected throughout the system. Although errors may occur less frequently when using an automated CMMS, EBOMs should still be closely monitored.

Manage Assets with FTMaintenance

FTMaintenance CMMS software is an optimal tool for organizing and tracking asset information, including equipment bills of materials. It provides a platform for tracking robust asset and part information, including the ability to see where parts are used and to what jobs they are assigned. Request a demo today to learn more about how FTMaintenance improves asset management.

Even though a bill of materials (BOM) makes maintenance operations more efficient and effective, many maintenance teams go without one. Often times, the absence of a BOM comes down to a lack of time, money, patience, expertise, or personnel available to build it.

To compensate, technicians, planners, and other stakeholders must find workaround solutions to complete routine tasks. This leaves organizations with a big decision to make: Should the organization invest the time needed to build a bill of materials for each of their assets or continue to deal with the consequences of poor spare part and asset management?

When you consider the impact of a bill of materials on asset reliability, the advantages are clear. Quicker maintenance and repair times, fewer errors, and simplified parts reordering reduce production downtime and other maintenance costs. Therefore, we strongly recommend that organizations that have no or incomplete BOMs create and/or update them.

This article is intended to help organizations create a bill of materials for maintenance purposes. Organizations engaged in enterprise asset management may require a more comprehensive bill of materials that meets the needs of stakeholders outside of the maintenance department. For details, read our article about how to create an equipment bill of materials (EBOM).

What is a Maintenance Bill of Materials?

Within your organization, there may be a number of bills of materials (BOMs) that serve different purposes and stakeholders, such as engineering, asset management, manufacturing, and materials management. Each of these contains varying levels of details, depending on who will use the information and how it will be used.

Typically, a maintenance bill of materials lists the replacement parts and/or materials that comprise an asset, such as a piece of equipment. These items must be repaired or replaced to keep the asset in working order. In this article, we will refer to this type of bill of materials as a bill of materials or maintenance bill of materials interchangeably.

How to Create a Maintenance Bill of Materials

Compared to other bills of materials, creating a maintenance BOM is quite easy due to its simplicity. For example, an engineering bill of materials may be a comprehensive list of any and all parts and materials that make up an asset, along with other information relevant to other stakeholders. Sifting through this level of detail would surely bog down the maintenance team’s productivity.

In contrast, maintenance BOMs are less formal. Maintenance BOMs can be created according to the following procedure.

1. Consider What Tool Will be Used to Create the BOM

Before you create your maintenance BOM, consider the best way to document the information. Using paper and pencil is not an efficient solution, as handwritten information is not easily edited and will likely need to be entered into an electronic system anyway. Like any other physical documentation, hard copies are prone to get lost.

Spreadsheet programs such as Microsoft Excel are popular and great for simple data collection and organization. However, spreadsheet software has limitations in terms of automation and ease of use. Though the tool is digital, many updates must be made manually, and it takes someone computer-savvy to set up special formatting, equations, and styling. Additionally, information stored in spreadsheets quickly becomes outdated if not consistently updated.

We recommend that you build your bill of materials in a computerized maintenance management system (CMMS). Many CMMS solutions automatically build a BOM when parts are issued against work orders. Automatically generated BOMs provide a base set of information about each part, taking away some of the guesswork and decision–making about what data to include.

As you will see throughout the rest of this process, although not required, a CMMS will provide many advantages as you create your BOM. Whichever program you decide to use, it must be used consistently to reap the full benefits.

2. Decide What Items to Include on the BOM

The needs of the maintenance process determine what items to include on the maintenance BOM. As mentioned earlier, maintenance BOMs often list only a subset of an asset’s parts. This should include all the critical components, asset-specific materials, and components that will reasonably be repaired and/or replaced.

Consumables, such as towels, gloves, and safety equipment, are usually omitted from the BOM, as they are not a part of the asset itself. Even though these items are used to complete maintenance tasks, this information is usually communicated on a work order instead.

Ultimately, a maintenance engineer, maintenance manager, or other relevant employee should determine what types of items are valuable to include on the maintenance BOM.

3. Decide What Data to Include on the BOM

There is a delicate balance between providing enough information to be useful, and providing so much detail that end users cannot find what they need. At a minimum, the maintenance BOM should identify the part or component being used. This usually includes the part’s number and name. Part quantities and usage data are also common data points.

What data is ultimately incorporated will be up to your organization to decide. Based on the system being used to create the BOM, more or less detail may be included.

Manual or spreadsheet-based systems allow you to track an unlimited amount of information. However, too much detail is often included, making BOM creation and updates a burden. For maintenance BOMs, it is often the case that less is more.

CMMS software offer a base set of data fields, which can often be expanded or reduced through configuration or customization. For the most part, the default fields provide enough information for maintenance purposes.

4. Collect Asset Data

Unfortunately, many organizations struggle with their data tracking practices. Valuable maintenance data is often scattered across several locations, and in various electronic and hard copy formats. Luckily, data about what parts are used on an asset can be obtained from multiple sources including:

• Drawings, schematics, and catalogs
• Equipment suppliers and other vendors
• Similar assets and equipment
• Engineering change notices and redesign documentation
• Current or planned preventive maintenance (PM) work orders
• Previous unplanned work orders
• Work order history records
• Personal inventory lists and cheat sheets
• Equipment nameplates
• Physical asset inspections
• Veteran employees and other experienced “go to” workers

Collecting data will be easiest for new assets. Original equipment manufacturers (OEMs) provide comprehensive documentation along with new assets, including an extensive list of spare parts. Data for existing assets can be obtained from one or more of the sources listed above.

During data collection, it is most common to store data in a spreadsheet. Information can easily be transferred into a CMMS when needed. As an added bonus, digital maintenance documentation can be uploaded to the CMMS for easy reference.

5. Review Asset Data

As you collect data, you’re bound to encounter information that is conflicting, out of date, or obsolete. If you encounter discrepancies, cross-check between multiple sources to ensure the most up-to-date information is used. It is imperative that the data you have is accurate. Inaccuracies or working from old information leads to a number of issues. For example, if the wrong part is listed, the correct part will need to be located or ordered. This may result in unnecessary downtime caused by tracking down parts or avoidable emergency shipping charges if a new part must be ordered.

Learn more about MRO inventory management.

6. Enter Data in the CMMS

After gathering all required information, enter part data into the system where the maintenance BOM will exist. If using a spreadsheet, this step will already be complete. If using a CMMS to build the BOM, data entry should be performed by someone proficient with the system that can enter data into required fields.

Once part data is loaded into the system, it must be linked to its specific asset. This is difficult in a spreadsheet; use a CMMS instead. As previously mentioned, many CMMS solutions automatically build BOMs when parts are issued against assets on a work order. Otherwise, you may build BOMs manually.

One advantage of using a CMMS to create your maintenance bill of materials is the ability to view BOMs from a part- or asset-centric view. From an asset record, you can see all the parts included on the BOM. In most cases, the CMMS part record has a “where used” tool, listing all the assets on which that part has been used or assigned.

Read Also: CMMS Data Transfer Best Practices

Maintaining the Bill of Materials

As much as one would prefer them to be, maintenance bills of materials are not “set and forget.” BOM data changes over time, and if changes are not made to an asset’s bill of materials, the wrong parts will be listed. Some reasons BOMs require modification are as follows:

• A supplier provides a new and improved version of a part
• Older parts become obsolete and an alternative is required
• A vendor changes its part catalog name and/or number
• Changes or modifications to an asset’s design require new and different components
• Parts become standardized across similar assets or across plants
• Similar parts are ordered from a new supplier

Managing and tracking changes is a challenge when done in a spreadsheet or other manual system. A CMMS makes maintaining the bill of materials easy. Changes made in a CMMS are only required once and reflected throughout the program. Your team benefits by always using the most-up-to-date information.

Manage Parts with FTMaintenance

FTMaintenance is a CMMS solution that allows you to track maintenance assets and MRO inventory. It offers automated features that allow you to quickly and easily build and manage bills of materials. Along with other powerful CMMS features, FTMaintenance is an all-in-one platform for documenting, managing, and tracking maintenance activities. Schedule a demo of FTMaintenance today.

Work order management is a core function of maintenance management. A successful work order management process depends on how efficiently work orders progress through each stage of their lifecycle. Maintenance professionals use one of many work order management systems today, each with their own benefits and drawbacks.

This article provides an overview of the pros and cons of several common work order management systems in order to help you make the best decision for your organization.

No Work Order Management System

As surprising as it sounds, some organizations do not have a formal work order management system in place. This is typical of small organizations that operate in a completely reactive mode. Depending on the makeup of the maintenance team, veteran technicians determine what maintenance is needed based on their practical knowledge, experience, or “gut feeling.” Employees rely on their memory to know when maintenance is due.

Having no work order management system has no benefits other than cost. Unless maintenance staff has superb memory skills, having any type of organized system is better than having none at all. Without a work order management system, maintenance operations are thrown into chaos. Not only does no one know what work needs to be done and when, it is difficult to hold people accountable. Because of these factors, maintenance costs are high and no useful information is documented to help improve operations.

Paper Work Order Management System

Though using a paper-based work order management system seems outdated, it still thrives in today’s industrial environments. Paper work order management includes communication about maintenance work using non-computerized methods such as paper and pen, sticky notes, bulletin boards, and maintenance tags.

Paper-based work order management has existed seemingly as long as pen and paper has been used. Before computers, many businesses were run on paper-based systems. Their ease of use and familiarity are a large reason why so many organizations still use them today. In fact, operations in many organizations largely rely on printed documentation generated by computerized systems, such as work orders or invoices.

The primary advantage of paper work order management systems is that paper work orders are very portable. Technicians can fold paper work orders, tuck them into a pocket, put them in a folder, or attach them to a clipboard. Paper work orders can also be taken into harsh environments or areas with no internet connection, places where electronic devices may get damaged or become useless. It is also easier for technicians to grip a writing implement with gloves on than to type on a mobile device.

Due to its simplicity, paper-based work order management systems are very limited. Paper work orders are easily misfield, lost, or damaged. It can also be time-consuming to locate, retrieve, and organize them, leading to slower response times. Even if there are only minutes of time wasted, lost maintenance time adds up over time.

In terms of communicating maintenance information, paper work orders are prone to errors. Poor penmanship, misspellings, and misnumberings cause inaccuracies that indirectly impact other aspects of maintenance operations like accurate inventory tracking.

Finally, filing paper work orders requires storage space, which quickly runs out when hundreds of work orders are being processed regularly.

Email Work Order Management System

Another common method of managing work orders is to use email software. Organizations most commonly use Microsoft Outlook, as it comes preinstalled with a Windows operating system. Google’s Gmail is another popular option.

Like paper, email is familiar to everyone, whether used in their business or personal life. Email-based work order management digitizes work orders, making them easier and faster to distribute to employees. Maintenance managers may also attach computer files to emails to provide extra context to work orders. Technicians that desire a hard copy version of a work order have the ability to print them, attachments included.

A big advantage of email systems over others discussed so far is built-in scheduling capability. Organizations use calendar appointments to assign and schedule work orders at a specific date and time. Automatic notifications remind technicians of upcoming appointments.

Email-based work order management is not without its limitations. For one, emails require manual data entry in order to create and update work orders. One person is responsible for generating work orders from scratch, by copying and pasting from previous emails, or through managing templates in the form of email drafts.

Email communication presents additional difficulties. Emails sent to a single person cannot be seen by others; emails sent to groups provide more transparency but can lead to multiple responses for the same job and muddied conversations.

Finally, email software does not provide transparency between users. Technicians do not have access to an asset’s service history unless they have previously performed the work. Even so, workers do not have access to work that others have performed.

Recommended Reading: 10 Reasons to Use CMMS over Email

Spreadsheet Work Order Management System

The next level of functionality is the use of spreadsheet software as a work order management system. Spreadsheets are still used by many maintenance departments today. Microsoft Excel is the most commonly used spreadsheet software, as it is part of the Windows operating system on which most businesses run.

Spreadsheets are a popular way to manage work orders due to their ability to organize information through the use of tabs, columns, and rows. Files contain defined spaces to hold specific information, making it easy for users to know exactly where to find or enter information about maintenance activities. Formatting options like text styles and background colors can draw attention to important information.

Savvy users can use formulas, data validation, and other data management features to provide some level of automation. For example, a field can be set up to automatically calculate labor cost by multiplying labor hours by an employee’s hourly rate. Spreadsheet software also generates basic charts, graphs, and reports.

Despite their advantages, spreadsheets create a shaky foundation for work order history. Spreadsheets require some computer know-how to enter and update data. A non-savvy user could easily mess up columns, rows, and formulas without knowing how to fix it. Data entry in spreadsheets is still very manual and cumbersome.

Another disadvantage of spreadsheets has to do with file access. Some files are locked into a single computer, making it difficult for others to access and see up-to-date maintenance information. Even if files are widely available, only one user can open the file at one time. More worrisome is that users may inadvertently delete or move the file, risking the loss of maintenance data.

Perhaps the biggest drawback of a spreadsheet-based work order management system is the lack of automated work order generation, particularly as it applies to preventive maintenance. Spreadsheet software does not have the ability to automatically generate work order forms based on a schedule. Therefore, work order creation, assignment, scheduling, and distribution remains a very manual process.

In-house Work Order Management System

Organizations that recognize the downfalls of the previous systems mentioned can create their own in-house, “homegrown” work order management systems using database software such as Microsoft Access.

The biggest advantage of a homegrown work order management system is customization. While off-the-shelf work order management software products must be design to appeal to many businesses with many different processes, a homegrown system is tailored to the way you work. Depending on the IT resources available, the potential benefit of homegrown systems is virtually endless.

All that being said, developing a work order management system requires a large time and IT investment. Organizations must be able to: create the database, build the software client, install it on servers, host the data, protect and safeguard the code, understand the organization’s maintenance management needs, upgrade hardware and software to support the system, and continually ensure the integrity of the system. Many small to medium sized-businesses simply do not have the manpower to create a work order management system in house.

Adding to the statements above, many homegrown systems are built without the end user experience in mind. The result is that users often find the system too cumbersome to use and inevitably either abandon it or reluctantly accept that more time and effort needs to be devoted to data entry.

Work Order Management Software

As its name suggests, work order management software is specifically designed for managing maintenance work orders. Because proper work order management relies on information about other maintenance resources, work order management functionality is a central part of computerized maintenance management system (CMMS) software.

CMMS software is the most complete work order management system. The benefits of automated work order software can be felt throughout the entire work order management process.

First, it provides requesters with a channel for requesting maintenance assistance. The system notifies administrators of incoming requests, allowing them to review and approve them. Based on the urgency of requests and other maintenance work, the CMMS makes it easy for administrators to prioritize, assign, and schedule work orders.

The CMMS automatically notifies technicians about assigned maintenance work and distributes it electronically, ensuring that work orders don’t get lost. Technicians are able to use an internet-connected device to update work order details and close out work orders once they are complete. A work order list provides technicians with visibility of “open” work orders.

Finally, a CMMS automatically tracks and stores data collected through work orders so that it is available for analysis. Maintenance reports allow organizations to track work order key performance indicators (KPIs), identify trends in productivity and asset downtime, and adjust maintenance plans accordingly.

One of the primary concerns with work order management software is the cost of software and training. On the plus side, many vendors offer subscription licenses to reduce the upfront costs of getting started. To put things further in perspective, the long-term benefits of CMMS software in terms of cost- and time-saving more than make up for the cost of software. For example, consider how much money is saved by reducing asset downtime, even if only by a few hours per year.

Another potential issue is the need to gain employee buy-in. A CMMS represents a new way of doing things, and it is possible that you may face some resistance to the idea of doing things differently. Our article, How to Increase CMMS User Adoption, provides an overview of user adoption challenges and provides some tips on how to deal with reluctant employees.

Manage Work Orders with FTMaintenance

Choosing the right work order management system is an important decision with many factors to consider. It is clear that a CMMS, like FTMaintenance, is the superior choice when it comes to managing maintenance work orders. However, FTMaintenance is more than a simple work order management system. Our full suite of features provides functionality that makes it easy to track assets, MRO inventory, work requests, preventive maintenance, and more. To learn more about FTMaintenance, request a demo today.

Maintenance storeroom organization greatly influences maintenance operations and the organization’s bottom line. However, maintenance storerooms are commonly disorganized, cluttered, and neglected, creating numerous inefficiencies that drive up MRO inventory costs. Though organizing your maintenance storeroom may be a long process, the benefits of improved asset reliability and productivity are well worth the effort.

Why Maintenance Storeroom Organization Matters

The organization of your maintenance storeroom greatly impacts the productivity of the maintenance team. According to a study conducted by Emerson Reliability Consulting, technicians spend 10% to 25% of their time obtaining parts. Instead of performing maintenance work, maintenance staff is spending up to a quarter of their day trying to identify and locate spare parts! Meanwhile, the organization unnecessarily loses money from lost production, extended asset downtime, and emergency inventory purchases.

An organized maintenance storeroom provides several benefits. First, it allows maintenance staff to get in and out of the storeroom quickly because everything is in its place and is easily found. This shortens the amount of time it takes for technicians to respond to unplanned maintenance events, reducing downtime.

Better part location also reduces the need for workers to create their own “private” inventories in personal toolboxes. As a result, inventory counts become more accurate, reducing duplicate orders for parts that are in stock but cannot be found when needed.

Reduced inventory levels not only mean less inventory spend, but also that less space is needed for storage. Combined with improved storage solutions, more free space is available in the facility for additional production equipment, kitting, or other workspace.

Maintenance storeroom organizations also impacts inventory control. When storeroom clerks are able to plainly see what items are in stock and how much is on hand, they can make better decisions regarding the timing of orders, order frequency, order size, lead time, and available storage space.

Finally, better storeroom organization means that MRO items will be stored properly, protecting them from degradation caused by humidity, temperature, dust, and other environmental factors.

How to Organize Your Maintenance Storeroom

The most tried and true approach to maintenance storeroom organization is 5S, developed as part of lean manufacturing. The philosophy behind 5S is that good results cannot be achieved until a workplace is in a clean and organized state. It is estimated that the effective implementation of 5S improves maintenance efficiency by 10% – 30%. Therefore, this discussion will approach maintenance storeroom organization through the lens of 5S. For those unfamiliar with the concept of 5S, each S is defined below:

• Sort: Examine a set of items and remove those that are unnecessary or unwanted.
• Straighten / Set in Order: Determine a logical way to arrange items.
• Shine: Keep workspaces clean and well-maintained.
• Standardize: Systematize the previous steps and create standard operating procedures that make these activities routine.
• Sustain: Make 5S a part of the company’s culture.

Sort

Over time, storerooms tend to hold MRO items that are obsolete. For example, assets are often replaced or retired, leaving their associated parts behind. Organizations also switch inventory vendors in search of better prices or contract terms, resulting in out-of-date parts. Or possibly, an effort to standardize parts across equipment renders parts useless.

The goal of sort is to get rid of unnecessary items. Ideally, every item left in the storeroom is tied to operating equipment. Also consider stocked items that are not stored in the storeroom, such as spare parts managed through vendor managed inventory (VMI) agreements.

There are many valuable resources that can assist with sorting. MRO inventory management systems, if available, are used to create bills of materials (BOMs), track usage metrics, and analyze other inventory management data for decision making. Technicians and maintenance storeroom staff are also valuable resources. They work directly with the parts themselves, and can offer insight into the purpose of parts, when and how often they are used, and whether the parts are truly needed.

Straighten / Set in Order

After the sort phase, only essential items should remain. Next is to straighten or set items in place. The straighten phase is best summed up by the proverb “A place for everything and everything in its place.” This phase helps organizations locate parts and tools in the most efficient manner.

Parts Organization Methods

There are numerous ways to organize items within the storeroom. Regardless of what method is chosen, parts should be easy to find, easy to use, and easy to put away. Two common ways to organize parts are by asset or by part type and are described below. It should be noted that many organizations use a combination of organization methods.

Organize Parts by Asset

With this method, parts are organized by the asset(s) on which they are used. Organizations choose this method because it makes it easier to find the right parts for an asset, whether for planned or emergency maintenance. It is also useful when many parts are needed for the same asset at once.

A major downside of this approach is duplicity. Parts that are used on more than one piece of equipment, which is often the case, must be stored in multiple locations. Organizing inventory this way requires more precise inventory control and additional storage space.

Organize Parts by Type

This approach organizes similar parts together (i.e., bearings with bearings, fuses with fuses, etc.) and provides numerous advantages. First, it helps with troubleshooting because it makes it easy to find substitute parts if required parts are out of stock. Second, it makes it easier to measure the value of inventory part types – for example, you can see how many motors are in stock at a glance. Finally, grouping inventory parts by type reduces duplication, since parts are only stored in one location.

One potential downside to this method is the opportunity for mistakes. Technicians in a hurry are more prone to grab the wrong part, which delays response times and increases downtime costs. However, a barcoding system reduces this risk. More on this topic is discussed in the Standardization section.

Location

Straighten also means determining the best locations for parts within the maintenance storeroom. For example, commonly used parts may be placed closest to the entrance to reduce unnecessary travel. Alternatively, items commonly used together may be located near one another, like storing personal protective equipment (PPE) near hazardous chemicals.

Storage Solutions

The structures used to hold inventory items should also be considered during this phase. There are many storage solutions available, each with their own pros and cons depending on the type of inventory being held. For some companies, shelves and bins work fine. Storerooms with space limitations may consider high density cabinets.

Also consider storage locations outside of the storeroom, such as lockboxes, cribs, and other areas. These storage locations provide quick access to high volume parts without requiring technicians to travel all the way back to the storeroom, thereby increasing their productivity.

Shine

The shine stage focuses on keeping the storeroom clean and by extension, well maintained. Basic housekeeping improves storeroom safety by removing debris that leads to slips and falls. Cleaning reduces the risk of pathogens and other health hazards.

One must also pay attention to the condition of the storeroom itself. Parts stored in environments that are overly humid, hot, or cold leads to premature part degradation. For example, excess moisture in the air that collects on surfaces causes corrosion and mold. Dusty parts do not perform to specification. When combined with humidity, dust and debris stick to parts and become difficult to remove.

Take note of other storeroom conditions as well. Ensure that storage equipment is in good condition. Fix any holes in the roof, cracked or broken windows, or missing doors. Provide proper lighting and heating and air conditioning. While these tasks sound like common sense, you’d be surprised at how often they are ignored.

Standardize

After sort, straighten, and shine, your maintenance storeroom should be in pretty good shape. The standardize step makes the aforementioned activities routine so that your storeroom doesn’t slowly slip back into a state of disarray. Standardization involves creating standard operating procedures that reinforce 5S principles.

Schedules and Checklists

Create a schedule to make 5S tasks a part of your routine operations. Schedules spell out how frequently tasks like cleaning should be done and who is responsible. Also provide a chart or checklist that communicates what needs to be done. Checklists not only serve as a reminder of what to do, but can also be used to audit whether tasks are completed to satisfaction. Overtime, these tasks will become second nature and will be done automatically.

Naming Conventions

Standardized asset naming conventions help identify parts and their attributes. Technicians can use asset names to quickly locate parts within the storeroom, depending on its organization. For example, if all bearings are stored together, a technician will know which section of the storeroom to look in when a part name that includes “BRNG” appears on a work order.

Further, assign standardized names to the storeroom aisles, racks, shelves, and bins. This information directly tells workers where parts are located, such as aisle 5, rack A, shelf 1, and bin 7.

Standardization also extends to the inventory tracking system or computerized maintenance management system (CMMS). A standardized asset naming convention helps employees easily identify parts in the system, as well as provides a way for new records to be added in the future.

Labeling and Signage

Labels and signs provide employees with a quick reference of 5S expectations. Print and display maps of the storeroom to remind technicians where parts are located so they can be picked or returned. Use labels on aisles, racks, shelves, and bins to direct employees to the exact location of a part. Hang posters that remind workers of the importance of cleaning and so on.

Barcode labels are useful for managing a large number of MRO items. Scanning barcodes is an error-free way of identifying parts and their associated storage locations. Barcoding parts and storage bins ensure that items are easy to find and that everything has a home.

Sustain

Habits take time to form. Organizing the maintenance storeroom – and ensuring it stays organized – takes a department-wide, even company-wide effort. The goal of the sustain step is to form long-lasting habits and continuously improve. Doing so may require a change in maintenance culture. Tools like schedules and checklists, mentioned earlier, help reinforce behaviors that make 5S sustainable. Further, maintenance management should follow up to make sure tasks are being completed.

Safety

Some companies choose to include safety as a sixth “S”. Safety focuses on reducing potential hazards as much as possible. Improving maintenance storeroom safety can take many forms. For example, apply a warning label to cabinets that contain chemicals. Make storage shelves more stable by storing heavier items near the floor and lighter parts higher up. Hang safety-focused signage such as “Watch Your Step” or “Authorized Personnel Only” where applicable.

Maintain an Organized Maintenance Storeroom with FTMaintenance

Properly organized maintenance storerooms lead to many productivity benefits provided that they stay organized. FTMaintenance CMMS software helps organizations manage their maintenance inventory by providing powerful MRO inventory management features. With FTMaintenance, you can track all spare parts (including their stockroom location), ensure storerooms are well maintained, and improve accuracy with barcode scanning. Schedule a demo today to learn more.

Historically, maintenance, repair, and operations (MRO) inventory management has been viewed as a necessary cost of doing business, a cost center, with little thought given into how much money is spent on acquiring and storing spare parts and materials. As a result, money has been tied up in overstuffed MRO stockrooms, emergency inventory purchases, and expedited shipping costs.

Today, organizations recognize maintenance operations as a potential source of cost savings. Upper management pays close attention to whether investments in MRO inventory result in improved asset availability and profitability. Due to the high costs and risks associated with poorly managed MRO inventory, upper management holds maintenance managers responsible for tracking inventory management metrics and KPIs.

What are Inventory Management KPIs?

A key performance indicator (KPI) is a metric, or measured value, which is directly tied to a specific strategic business goal. Inventory management KPIs track how well your organization’s MRO inventory supports your organization’s goals and the return gained on investments in inventory. Over time, KPIs show you whether you are approaching or moving further away from your organization’s goals.

Before we dive into our discussion about inventory management metrics, we must point out the importance of working with reliable data. Whether you already have an inventory management system in place or are just beginning to track MRO inventory data, reliable data is essential.

Many organizations track inventory management activities with computerized maintenance management system (CMMS) software. A CMMS provides accurate data for calculating inventory management KPIs and removes the manual effort of generating maintenance reports.

Inventory Management KPI Examples

Every organization has unique business goals and therefore, uses their own set of inventory KPIs. Nonetheless, some common KPIs serve the needs of organizations in a range of industries. The purpose of this article is to introduce you to these common inventory metrics that can help you meet your maintenance management and MRO inventory management goals. Consider the following common inventory management KPIs.

For you convenience, the KPIs discussed in this article are also available as an infographic. Download the MRO Inventory Management KPIs infographic.

Inventory Accuracy: What’s In Stock?

One of the basic components of MRO inventory management is identifying what items you have and how many. The inventory accuracy KPI is simply a measure of how closely your count of physical inventory matches what is recorded in your CMMS or inventory management system.

To calculate this metric, an employee audits the items on your storeroom shelves and compares them to the database record. A truly accurate inventory will have matching on-hand quantities, storage location(s), and identification tags such as barcodes. Use the following formula to calculate the inventory accuracy KPI:

How to Interpret Inventory Accuracy

It is not realistic, nor practical, that records exactly match for every item that is counted. For example, data entry errors, mislabeled or confusing location codes, and outstanding transactions all impact inventory accuracy. For most organizations, inventory accuracy ratings of 95% or greater are considered acceptable. Sophisticated organizations may adjust this tolerance based on an item’s criticality, but for most, maximum accuracy is the goal.

If your inventory accuracy rating is low, it is imperative that you find out why and, if necessary, implement process improvements. Inaccurate inventory counts can lead to lost production, unnecessary downtime, under- or over-ordering, and costly emergency purchases.

Accuracy may be improved by performing regular physical inventory audits whether by exhaustive or cycle counting. CMMS software is a valuable tool which automatically updates inventory records as parts are updated in the system, via consumption on work orders or as newly purchased parts are received.

Inventory Turnover: How Much Stock Should I Have?

Whereas the inventory accuracy KPI tells you what is in stock, the inventory turnover KPI helps you determine how much inventory you should maintain. Ideally, there will be enough stock to meet demand but not so much that you have significant overstock.

Turnover is the rate at which an inventory item’s stock is used. This KPI measures how quickly you work through the lowest level of stock of an inventory item you desire to keep on hand in a given time period. Knowing an inventory item’s turnover rate is used to help set an appropriate reorder point. Reorder point is the minimum quantity of an item that, when reached, triggers an action to replenish stock. Inventory turnover is determined by the following formula:

How to Interpret Inventory Turnover

Low turnover (values less than 1) is typically associated with infrequent usage and/or overstock. For example, a widget has a reorder point of 10 and 3 were used in a measured timeframe of one year. The widget’s turnover rate is 0.3 (3 ÷ 10 = 0.3). Being less than 1, a turnover of 0.3 means the item is used at a relatively slow pace. Keeping 10 widgets in stock at any given time when only 3 are used per year seems excessive. In this scenario, the reorder point could be lowered.

High turnover (values greater than 1) is typical of frequently-used items, which are more at risk of stockouts. For example, a widget’s reorder point is set to 10, and 30 were used in the measured timeframe. The turnover rate for the widget is 3 (30 ÷ 10 = 3). With a value greater than 1 (3 times greater than 1 in this case), the item is used at a relatively fast pace. The reorder point should be set carefully enough so that stock doesn’t run out.

Be aware that the inventory turnover KPI does not account for the type of inventory being managed, so values derived from this calculation require further investigation. Consider the case of critical spares. Critical spares naturally have low turnover because they are seldom used, but are held as safety stock.  While regular usage is low, it is desirable to keep extra stock on hand as insurance. On the other hand, the turnover rate of often-used consumables and non-critical spares will be naturally high.

Another point that bears discussion is the timeframe in which turnover is calculated. Keep in mind that there is a delay between when orders are placed and when parts arrive. The time period used to determine turnover should be in line with your procurement process and cover the time from the start of the ordering process to the receipt of goods. We recommend the turnover reporting timeframe be no shorter than a week and no longer than a month.

Manually determining the optimal reorder point on tens, hundreds, or thousands of inventory items is nearly impossible. Simply reordering parts when they run out is not a sustainable strategy either. CMMS software contains features such as reorder point notifications, alerting you when parts need to be reordered. Integrated purchasing functionality allows you to automatically generate requisitions and purchase orders.

Stockouts: Are Parts Available When Needed?

The inventory stockouts KPI determines the frequency of out-of-stock occurrences, where stock is not available when needed. A stockout happens every time an employee attempts to retrieve a part and is unable to do so. Determining stockouts is fairly straightforward:

How to Interpret Stockouts

It goes without saying that stockouts should be avoided. In many industries, best practices suggest the value of the inventory stockouts KPI should be less than 1%. However, getting too carried away with eliminating stockouts can lead to overordering, which may result in overstuffed stockrooms and dead money that can’t be recovered.

Risk of stockouts influences reorder points and is typically looked at alongside the inventory turnover KPI. Low stockouts on items with low turnover can be a sign of overstocking. Low stockouts on high-volume items means that demand for the item is being met. Frequent stockout occurrences imply that reorder points may be set too low, though the length of your procurement process could also play a role. CMMS software keeps track of reorder points to help you avoid stockout occurrences.

Supply On Hand: How Long Will Stock Last?

The supply on hand KPI estimates how long your current stock will last based on past usage. It takes into account your past usage and current quantity on hand, and expresses your supply in units of time. Supply on hand is determined by the following formula:

Calculating this metric is a little more involved than it first appears. Let’s walk through an example step by step:

1. Find your usage for the most recent reporting time period. It’s important to select a time period large enough to give you an accurate representation of your usage. Using too short of time period, such as a week or month, may not represent your “typical” usage. In this example, let’s assume 25 widgets were used during a reporting period of one year.
2. Divide your current quantity on hand by the usage during the time period. This gives you the usage for the time period. In this example, supply on hand will be expressed in terms of years since the reporting period is 1 year. We’ll use a quantity of 6 for our current quantity on hand.
3. Convert the time period from the previous step into your desired time period. We’ll choose to express supply on hand in terms of weeks, so we will multiply our supply on hand in years by 52, as there are 52 weeks in a year. Note that the conversion factor used depends on the original reporting time period.In this example, there is approximately 12 weeks’ supply of widgets.

How to Interpret Supply on Hand

Supply on hand reveals how long it would take for the quantity of the item to run down to zero. Of course, it would be wise to reorder before that point is reached. To gather meaning out of this metric, it should be looked at in tandem with other inventory metrics, like turnover and stockouts.

Low supply on hand may mean you have low stock or the reorder point is set too low. For low turnover items with a relatively short reporting timeframe, it may be that the item was recently replaced. Low stock items may be in danger of stockouts. Compare supply on hand with turnover and stockouts to determine whether the item has an appropriate reorder point.

Using the supply on hand calculation for high stock items identifies slow-moving or obsolete inventory. For slow-moving inventory, use the inventory turnover metric to determine a lower reorder point. Obsolete inventory can be set aside for future disposal, thereby clearing space for active inventory items.

Inventory reports available in CMMS software help you monitor your supply on hand and optimize inventory by bringing attention to slow-moving items.

Track Inventory Performance with FTMaintenance

Organizations are paying closer attention to how their investment in inventory is being managed. The inventory metrics provided in this article are intended to help you make smart decisions about your MRO inventory. CMMS software is a necessary tool for maintenance teams looking to track and improve their inventory practices.

FTMaintenance inventory management software provides a centralized system for tracking and managing your spare parts inventory. Quickly identify what’s in stock, automatically update stock levels, and create purchase requisitions in one click. Powerful reporting capability provides you with meaningful, actionable insights into inventory performance. Schedule a demo of FTMaintenance today.

Many maintenance teams tend to follow a reactive maintenance approach due to its low initial costs and low requirement for planning. After all, it’s easier to do nothing than something. Unfortunately, a “fix it when it breaks” approach sends technicians scrambling, and often results in overtime, high repair costs, lost production, and severely reduced asset life. These consequences run counter to an organization’s goals of asset availability and profitability.

Even though many organizations realize that it is better to prevent breakdowns rather than respond to them, they struggle to be proactive about asset maintenance. This article seeks to provide a framework on how to implement a proactive maintenance strategy.

What is Proactive Maintenance?

Proactive maintenance is a maintenance strategy that involves performing maintenance before a failure or breakdown occurs. It seeks to increase asset availability, reduce downtime, and lower maintenance costs by addressing the root causes of asset failure before significant problems occur.

Proactive vs. Reactive Maintenance

Reactive maintenance is a maintenance strategy that involves restoring assets to operating condition after a breakdown (failure to function) has occurred. Compared to proactive maintenance, reactive maintenance requires less planning and upfront costs, at the expense of higher overall maintenance costs, increased downtime, and unpredictability.

A reactive maintenance strategy is designed to treat the symptoms of asset failure to promptly return a failed asset to full working order rather than diagnose and analyze why failures occurred. Generally, reactive maintenance traps maintenance teams in a vicious cycle of constant emergency work due to the nature of unexpected failures, leaving less time and money for maintenance work that could have helped to avoid the same failure in the first place.

By comparison, proactive maintenance works by focusing on the root causes of failures and then taking proactive actions to minimize or eliminate them. Though a proactive maintenance strategy requires more planning and upfront investment than reactive maintenance, it is more targeted, predictable, and cost-effective. In fact, by some estimates, proactive maintenance can lower total maintenance costs by as much as 60%.

It is important to recognize that reactive maintenance will never go away completely. In some cases, it is more economical to let parts fail rather than proactively replace them. Additionally, no maintenance strategy will eliminate unexpected failures. A balanced maintenance plan will include and budget for some reactive maintenance.

Further Reading: Using Root Cause Analysis to Improve Maintenance

Types of Proactive Maintenance

There are many types of proactive maintenance:

• Planned Corrective Maintenance (CM): Maintenance that is required to restore an asset to optimum or operational condition, but does not need to be performed immediately. Planned corrective maintenance occurs when a maintenance need is expected, allowing you to schedule corrective action ahead of time.
• Preventive Maintenance (PM): The most common type of proactive maintenance. Preventive maintenance is scheduled using time-based or usage-based intervals.
• Condition-based Maintenance (CbM): Maintenance carried out when an asset’s monitored condition reaches an unsatisfactory level. Using real-time condition data, maintenance can be performed before failure occurs.
• Predictive Maintenance (PdM): Maintenance scheduled using predictive analysis, based on an asset’s monitored condition, historical performance data, and advanced analytics. Predictive maintenance forecasts when failure is likely to occur, allowing maintenance teams to take preventative action.

Laying the Groundwork for a Proactive Maintenance Strategy

The transition from reactive maintenance to proactive maintenance does not happen overnight. Think of it more as an evolution rather than a flip of the switch. The following sections outline a few key tasks that will help you build a strong foundation for change before you actually begin to implement a proactive maintenance strategy.

Get Ready for Change

The truth is most people don’t like change. Transitioning to a proactive maintenance strategy requires a change in maintenance culture, which can be a challenge. Satisfaction with the status quo and reluctance to change are difficult hurdles for organizations to overcome, but it can be done.

A change in strategy also brings about the use of new technology, additional employee training, and other tools. It is crucial that the maintenance team embraces these opportunities. You will have an easier time implementing a proactive maintenance strategy if everyone is on board.

Invest in Maintenance Management Software

The best way to support a proactive maintenance strategy is with a computerized maintenance management system (CMMS). A CMMS helps you and your team shift to a proactive mindset by allowing you to organize, track, manage, and analyze maintenance data.

As you craft your proactive maintenance plan, a CMMS will allow you to easily establish preventive maintenance procedures, track asset failures and service history, and leverage maintenance reports to optimize proactive maintenance schedules.

Later, when your plan is put into action, a CMMS will keep your team accountable. Team members will use the CMMS to communicate maintenance work, access asset information, and document maintenance activities. If you are not currently using a CMMS, it is time to invest.

Further Reading: Creating a Culture of Accountability with a CMMS

Assess Your Current Maintenance Operation

Evolving maintenance operations must naturally move in a proactive direction. While maintenance teams in many organizations operate in a reactive way, they often quickly realize that this approach is not sustainable or beneficial. Additionally, an organization’s financial goals rely on improved asset reliability and availability, creating a greater demand for a proactive maintenance strategy.

The graphic above depicts the general progression of maintenance operations. Take a moment to identify where your organization currently falls and what’s next. As you progress down the line, consider what other changes are needed to support your operation.

Each level of complexity requires a higher level of skill, increased asset knowledge, and time and effort to plan and schedule maintenance than the last. Consider whether you currently have the technology, staff, and other resources required to move on. If not, work with your organization to determine how each can be acquired.

Understand Your Current Performance

In order to make improvements to your maintenance operations, you must have a solid understanding of your current performance. Performance data should be gathered from multiple sources such as the operations and engineering department, and your maintenance documentation system or CMMS. If you don’t have a maintenance documentation system in place, obtaining some of this information will be very difficult, if it exists at all. Therefore, we strongly recommend implementing and tracking maintenance activities in a CMMS.

Measures of performance include asset availability and the use of maintenance resources. In terms of asset availability, it is important to understand when downtime occurs, how long it lasts, and what causes it. Organizations commonly use asset management key performance indicators (KPIs) such as Mean Time Between Failure (MTBF), Overall Equipment Effectiveness (OEE) , and others to assess availability.

Evaluating maintenance resources involves knowing where time and money are spent. For example, it is important to know asset repair costs, how technicians spend their time, how much money is wasted on avoidable emergency inventory orders, and so on.

How to Implement a Proactive Maintenance Strategy

Once sufficient asset and historical maintenance information is collected, you can proceed with implementing your proactive maintenance strategy. The following steps provide a framework to help your implementation go smoothly.

Select a Project Leader

One of the most important keys to success is selecting an effective team member to spearhead the project. Ideally, the project leader will be someone who has intimate knowledge of maintenance needs, such as a maintenance supervisor, maintenance scheduler/planner, maintenance manager, or inventory clerk.

The project leader is tasked with overseeing the planning and implementation processes and ensuring tasks are completed. Their responsibilities include managing day-to-day operations, gathering information, and eventually creating and managing the maintenance schedule. The project leader also ensures that others are adhering to the proactive maintenance plan and properly using the CMMS.

Involve Key Stakeholders

Asset maintenance affects the entire organization. Therefore, an effective proactive maintenance program is one that receives input from and informs multiple maintenance stakeholders. Stakeholders may include the following:

• Front-line maintenance technicians responsible for performing the actual maintenance tasks who can provide information about ongoing equipment issues and downtime events. Technicians are also responsible for tracking maintenance activities in the CMMS, helping you build valuable data.
• Production operators who are responsible for ensuring that assets are running to specification. These regular equipment users who know what everything looks like when it’s “in place” and act as important allies for detecting issues early. Further down the road, they can assist with simple preventive maintenance activities or minor repairs.
• Operations engineers in charge of purchasing new assets, planning new equipment lines and cells, and performing critical analysis. This group also documents equipment specifications and may provide parts lists to the maintenance department.
• Operations management that communicates concerns about asset availability and scheduling.
• Safety managers who oversee employee health, safety, and environmental risks.
• Original Equipment Manufacturers (OEMs) who design industrial equipment and facility assets. OEMs are a valuable source of information and typically provide performance parameters and recommended maintenance schedules.
• Upper management who commits resources to the project and expect to see results.

Each of these stakeholders plays a role in optimizing and enhancing the proactive maintenance plan.

Create an Asset Registry

An asset registry is a list of all the assets that you are responsible for maintaining. Creating an asset list ensures that records are up to date and that all assets are accounted for when planning maintenance. A CMMS stores important asset information and makes it easy to track maintenance performed on each asset.

Learn more about FTMaintenance Asset Management

Identify Critical Assets

Critical assets are assets that are integral to business operations and result in major consequences should they break down. Determining an asset’s criticality helps you prioritize where to focus proactive maintenance efforts. It makes sense that the more critical the asset is to the organization, the more should be done to protect it.

Typically, critical assets are well-known throughout the organization. Regardless, it is beneficial to cross-check with other stakeholders to ensure that everyone is in agreement as to which assets are considered critical. In larger organizations, critical assets may be formally identified by the operations engineering team through a criticality analysis – a systematic way of evaluating the risk of asset failure.

Determine Effective Maintenance Activities

Once critical assets are identified, determine the best way to keep them running. At this stage you can keep things high level, but should at least determine the type of maintenance to be performed and how often. Later, you can hash out the specifics of what each task entails.

The goal for now is to get a rough sense of how you will care for each asset. An effective proactive maintenance program will leverage numerous resources, including:

• Maintenance history (CMMS or other internal maintenance documentation)
• Input from key stakeholders
• Documentation from criticality analyses
• Maintenance specifications provided by OEMs
• Operational experience

If just getting started with proactive maintenance, your plan will likely consist of planned maintenance, time-based preventive maintenance, and usage-based preventive maintenance. Advanced organizations may utilize condition-based and predictive maintenance.

Create Detailed Instructions

With effective maintenance strategies defined and maintenance activities identified, now you can create documentation about how each activity should be performed. Developing task-specific, step-by-step instructions provides guidance for technicians and ensures proactive maintenance is performed consistently. Be sure to estimate the amount of time needed to complete each task, as it will be important to make sure that your proactive maintenance schedule is realistic. Use your CMMS to create and manage detailed task lists for use on proactive maintenance work orders.

Create the Proactive Maintenance Schedule

The first step to creating the proactive maintenance plan schedule is to decide on the official start date of the program. Then, assign maintenance activities to specific days using the frequencies and estimated duration identified earlier.

A schedule that is mapped out for at least one year should allow you to balance the workload and account for at least one cycle of maintenance activities with less frequent occurrences. Ultimately though, the best duration will depend on your organization.

When scheduling work, consider peak production periods or planned plant shutdowns. These events may require changes to an otherwise rigid maintenance schedule.

Implement the Proactive Maintenance Plan

Now is the time where all the pieces come together. Once the start date arrives, your plan can be put into action. Don’t panic if things don’t go exactly as planned right out of the gate. Proactive maintenance plans will constantly change based on experience, updated recommendations, new technology, and so on.

Remember that implementing a proactive maintenance strategy is an evolution, and will take weeks to months to fully implement. The implementation timeframe depends on the resources at your disposal. Regardless, any step towards proactive maintenance – no matter how small – is beneficial.

Implement Proactive Maintenance with FTMaintenance

As demonstrated many times throughout this article, a CMMS is an essential tool for helping organizations move from a reactive mindset to a proactive maintenance culture. Leveraging CMMS software will make the implementation and tracking of your proactive maintenance plan go smoothly.

FTMaintenance is a powerful CMMS solution that offers robust asset management, preventive maintenance, and maintenance reporting features that allow you to craft an optimized proactive maintenance plan. Schedule a demo of FTMaintenance today!

Mobile computerized maintenance management system (CMMS) software is becoming more prevalent in today’s maintenance teams. While it may be convenient for employees to use their personal devices to log into CMMS apps and software, consumer-grade hardware is not designed to withstand harsh factory environments.

Thankfully, many technology manufacturers provide rugged hardware for industrial applications. This blog post provides an overview of what to look for when selecting mobile devices for your maintenance team.

What is a “Rugged” Mobile Device?

Industrial environments can wreak havoc on consumer-grade mobile devices. Therefore, organizations that wish to integrate mobile technology into their maintenance process need what are known as “rugged” devices. Rugged devices are designed specifically to stand up to extreme temperatures, moisture, dirt, and other environmental factors. Below are some attributes to consider when selecting rugged phones, tablets, or laptops.

IP Rating

Ingress Protection (IP) rating is an international standard, developed by the International Electrotechnical Commission (IEC), to grade the degree of protection against intrusion of dust or liquids. IP ratings are expressed as two digits.

The first numeral indicates protection against solid objects on a scale from 0 to 6, with 0 being no protection and 6 being no ingress of dust. The second numeral is the level of protection against liquids on a scale of 0 to 9, with 0 being no protection and 9 being protected against high pressure and temperature water jets. For example, an IP rating of IP65 means the device is dust tight and protected against water jets. Refer to the IEC website for more information.

MIL-STD-810 Compliance

MIL-STD-810 is a standard used by the United States Department of Defense to ensure equipment functions reliability while under real-world stress caused by vibration, shock, extreme temperature ranges, and other conditions. While this standard was developed specifically for military purposes, it is often used for testing rugged technology products as well.

To be MIL-STD-810 compliant, manufacturers must meet several guidelines, including sending devices to external testing laboratories. Because external testing can be expensive, some manufacturers choose to do in-house testing according to the official standards documentation.

Be warned that many manufacturers claim their products are MIL-STD-810 compliant even though they are not! Sometimes, products have not even been tested. Therefore, be sure to investigate any claims of compliance and ask about what standards the device passed, what test methods and parameters were used, and what the test results concluded.

Environmental Testing

Here are the most common types of tests manufacturers may perform on rugged devices to prove compliance with standards, determine specifications, or make marketing claims:

• Drop and shock testing: Requires devices to withstand multiple drops from specified heights.
• Temperature testing: Tests a device under normal operating conditions in extreme temperatures.
• Liquid-resistance testing: Measures a device’s water resistance.
• Vibration testing: Shakes the device to simulate movement from being carried by vehicles or people.
• Sand and dust testing: Tests the ingress of small particles and foreign bodies.
• Humidity testing: Exposes a device to high heat and humidity to test liquid resistance.

“Ruggedized” vs. “Rugged” Devices

As a cost-saving measure, some organizations opt to install tough outer cases on otherwise standard devices. Beware that these “ruggedized” devices still have sensitive internal components and are not the same as true rugged devices. Rugged devices are specially designed, inside and out, to withstand harsh conditions.

Useful Device Features for Mobile Maintenance

Today’s mobile devices have many features beneficial for performing maintenance. Many of these features are built right into the hardware or can be acquired by downloading apps. Listed below are common features used in mobile maintenance management for you to consider when evaluating rugged mobile devices.

Camera

Integrated cameras make it easy to add visual context to maintenance documentation. Technicians can take photos or capture video of maintenance tasks for training or documentation purposes. They may also be used to show supervisors or other approvers how tasks were performed for verification. Before-and-after pictures also help demonstrate correct disassembly and reassembly.

Some organizations take photos of their assets to aid in identification. These pictures can be stored with asset records in a CMMS to help users accurately identify which asset requires maintenance.

Finally, organizations with photo editing talent may use software to modify images in order to create custom diagrams or highlight specific components, assets, or facility locations.

Voice Recognition

Devices with voice recognition features, also called speech to text, enable you to enter work order details while reducing typed data entry. Simply activate the speech-to-text feature, and the device will transpose any verbal input into text. This feature comes in handy when traveling between locations or when devices may not pick up touch input due to gloves, grease, or water.

Barcode Scanning

Barcode reading capability converts mobile devices into scanning devices. Barcode scanning uses the device’s integrated camera to quickly read 1D barcodes and 2D barcodes, such as QR codes. Applications of barcodes in maintenance management include:

• Tracking assets via asset tags
• Looking up assets and inventory using a barcode scan
• Checking tools in and out
• Identifying the storage locations of MRO inventory items
• Looking up purchase orders
• Receiving inventory purchase into the system
• Adding assets, parts, and tools to work orders
• Increasing the accuracy of data entry

Units of Measure Converters

Units of measure conversion apps are ideal for quickly converting between imperial and metric measurements.

Flashlights

Flashlights allow technicians to see in low light areas, such as dark work areas or machine interiors. Using certain apps, flashlights can also function as strobe lights to inspect rotating, oscillating, or vibrating equipment.

Location Tracking

GPS and mapping technology allows you to easily identify the location of assets or employees. Maintenance teams servicing remote assets can also get directions to maintenance locations through maps. Location data also helps schedulers and planners see where field technicians are in relation to jobsites, determine if jobs are being completed on time or are delayed, and rearrange the schedule, if needed.

Condition Monitoring Apps and Hardware

Mobile devices find additional utility in maintenance environments by using existing hardware features in new ways or extending functionality through apps. A few examples include:

• Using the built-in accelerometer or gyroscope with an app to measure acceleration and vibration.
• Installing magnetic field detector apps to check for electromagnetic fields and power lines.
• Leveraging sound level detector apps to measure sound pressure levels and detect frequencies that are too high to hear with the human ear.
• Using a metal detector app to locate metal such as pipes.

While these apps are useful for non-critical measurements, the appropriate meters and instruments should be used when exact measurements are required.

Go Mobile with FTMaintenance Select

Introducing rugged mobile devices to your organization opens up numerous opportunities to improve your maintenance operations. FTMaintenance Select mobile CMMS software provides maintenance technicians with essential work order management functionality needed to document day-to-day maintenance activities. Request a demo today to learn more about our mobile maintenance management solutions.

Preventive maintenance (PM) is a critical part of any maintenance strategy. No matter the industry, the ability to preempt failures and breakdowns can lead to a wide array of benefits. However, effective preventive maintenance requires ample time, money, and effort.

With so many resources dedicated to preventive maintenance, you – as well as other management – will want to know: Is your preventive maintenance program working? In this article, we explore a number of key metrics to help you measure your preventive maintenance effectiveness.

Measuring Preventive Maintenance Effectiveness

In order to understand whether your preventive maintenance program is meeting or falling short of expectations, you must measure it. Measuring preventive maintenance effectiveness requires solid and consistent documentation. Organizations using paper-based or spreadsheet-based maintenance tracking systems may find it difficult to do proper analysis, due to unreliable or incomplete data. Generating reports or making calculations will be time-consuming. That’s why documenting maintenance activities is best done with computerized maintenance management system (CMMS) software.

Download Ebook: 10 Reasons to Use a CMMS over Maintenance Spreadsheets

Preventive maintenance software like a CMMS is an invaluable tool for measuring and improving preventive maintenance effectiveness. It provides tools you need to automatically schedule, manage, and track preventive maintenance activities. CMMS software stores preventive maintenance data so it can be used for robust analytics and reporting. Powerful maintenance reporting features, allow you to generate insightful PM reports that will help you improve the effectiveness of your preventive maintenance program.

Preventive Maintenance Metrics

There are a number of ways to measure preventive maintenance effectiveness and each organization may do so differently. Furthermore, what key performance indicators (KPIs) are used depends on your organization’s goals. The following sections provide an overview of common preventive maintenance metrics you can use to help you reach your maintenance management goals.

For your convenience, a quick reference sheet of the KPIs discussed in this article are available in our Common Preventive Maintenance KPIs infographic.

Planned Maintenance Percentage

Planned Maintenance Percentage (PMP) measures how much time is spent on planned versus unplanned maintenance in a given timeframe. This simple metric allows you to quickly see how maintenance time is being spent.

Make special note of the word planned in this equation. While preventive maintenance will likely make up most, if not all, of your planned maintenance, other types of proactive maintenance, such as predictive maintenance, should also be included here.

To calculate Planned Maintenance Percentage, divide the total number of planned maintenance hours by the total number of maintenance hours (both planned and unplanned). Then multiply by 100 to get the percentage.

How to Interpret Planned Maintenance Percentage

PMP tells you how much of your maintenance activities are scheduled in advance, compared to how much time was spent reacting to asset breakdowns.  Typically, a low PMP – meaning little time is spent on planned maintenance – shows that assets may be unreliable and more susceptible to unplanned downtime. It is assumed that assets with a high PMP will generally face fewer unexpected issues. Note that a low PMP is not necessarily bad, as we will explain shortly.

When measured for a specific asset, PMP indicates the proportion of work performed as part of a preventive maintenance plan. PMP can be looked at together with other asset management KPIs, such as Mean Time Between Failure (MTBF), to identify areas of improvement to the asset’s preventive maintenance plan. A centralized maintenance tracking system, like a CMMS, makes generating these reports quick and easy.

So, what is considered a “good” PMP value? While there is an often stated target of 80% of work being planned versus 20% reactive, the ideal PMP will differ by organization.

For example, planned maintenance activities for facility assets are generally more spread out (and therefore occur less often) compared to planned maintenance in manufacturing. Seasonal preventive maintenance, like furnace tune-ups, or assets designed to run-to-fail, like light bulbs, also influence PMP. Tracking PMP over time helps you understand where you are now and set improvement goals for the future.

Preventive Maintenance Compliance

Having a preventive maintenance plan is useless if it’s not followed. That’s where this next preventive maintenance effectiveness metric comes in. Preventive Maintenance Compliance (PMC) is a measure of how many scheduled preventive maintenance work orders are completed within a set amount of time. It can be an indicator of whether PM schedules are being adhered to and how well your PM program is working.

Preventive Maintenance Compliance is determined by dividing the number of completed PM work orders by the number of scheduled work orders within the timeframe, then multiplying by 100 to get a percentage. Note that scheduled and completed should only count those work orders that were originally scheduled to be completed in this timeframe.

How to Interpret Preventive Maintenance Compliance

Preventive Maintenance Compliance tracks whether preventive maintenance is being performed and can help keep your team accountable. Low PMC signals that PM work is planned but isn’t being completed and that further investigation is needed. There could be many reasons for low PMC, such as the following:

• Work orders are being lost or ignored due to an inefficient work order management process.
• Assets may not be available for maintenance when scheduled.
• Irrelevant tasks are purposely being skipped.
• Not enough maintenance resources are available to complete the work.
• Tasks are not being communicated to maintenance staff.

Related Reading: Creating a Culture of Accountability with a CMMS

One shortcoming of PMC is that it doesn’t tell you how many work orders were completed late or how far past their due date they were completed. To overcome this, it is important to look for how many PM work orders are completed by their due date. This is easily done in a CMMS.

Skipped PM Percentage

Somewhat related to Preventive Maintenance Compliance is a measure of how many PM work orders were not completed because they were skipped, aka skipped preventive maintenance percentage. Skipped work orders are different than those that are simply postponed or completed late – they are intentionally disregarded.

For example, a preventive maintenance work order might be skipped because tasks were completed during a recent corrective maintenance event. A frequently occurring PM might be skipped because the asset was unavailable at the time the work was to be performed. Depending on your available labor resources, you might choose to skip a PM because no one was available to do the work.

Skipped PM percentage can be calculated by dividing the number of skipped PMs by the number of scheduled PM work orders within the time frame, then multiplying by 100 to get a percentage.

How to Interpret Skipped PMs

A high Skipped PM value (meaning many PMs are skipped) indicates there are underlying issues that warrant investigation. First, it can be an indicator of the level of communication between the maintenance team and the party that requires maintenance. For instance, an asset may be inaccessible for maintenance due to a scheduling conflict with the production team or a tenant. A CMMS makes it easier to share and communicate the maintenance schedule with other departments or people.

Another reason the Skipped PM value could be high is that preventive maintenance is being done too often. Performing preventive maintenance on assets that don’t need it leads to unnecessary downtime, labor costs, and parts usage. It also increases the risk of reducing reliability caused by incorrect re-assembly or other errors. Preventive maintenance software makes it easy to change and fine-tune PM schedules.

A third reason that preventive maintenance might be skipped is a lack of adequate labor resources. Perhaps there are simply not enough technicians available to complete the work on time. Maintenance reports provided by a CMMS can help balance the workload, reprioritize tasks, and build a case for additional staff.

Scheduled Maintenance Critical Percentage

Scheduled Maintenance Critical Percentage (SMCP) measures the impact of late planned maintenance work. This metric quantifies the risk associated with overdue preventive maintenance work orders relative to their work order cycle, making it easier for you to prioritize which PM jobs to complete first. For example, a weekly PM work order that is 5 days late impacts an asset’s longevity and likelihood of failure more than an annual work order that is overdue by 5 days.

To calculate SMCP, you must know the PM work order’s recurrence and the number of days the procedure is late. Once you have that information, you can use the following formula:

How to Interpret Scheduled Maintenance Critical Percentage

Falling behind on preventive maintenance increases the risk of downtime, the severity of breakdowns, and the amount of backlogged maintenance work. When you are behind on preventive maintenance, it can be difficult to know which tasks to perform first. SMCP compares the criticality between jobs in order to make this decision easier.

Typically, the higher the SMCP, the longer overdue (and therefore more critical) it is to complete the task. To illustrate, let’s compare two tasks on a CNC lathe: greasing the chip conveyor and cleaning the coolant tank. The chain on the chip conveyor should be greased quarterly (every 90 days), but you’re 9 days behind. The coolant tank is to be cleaned semi-annually (every 180 days). This work order is also 9 days late. Let’s calculate the SMCP, using the formula presented above:

Conveyor: ((9 + 90) ÷90) x 100 = 110%

Coolant Tank: ((9+180) ÷ 180) x 100 = 105%

In this example, greasing the chip conveyor should be prioritized over cleaning the coolant tank. Notice how the work order’s recurrence impacts the severity of the job. The SMCP demonstrates that it is more critical to complete the overdue quarterly work order first before addressing the overdue semi-annual work order.

Be aware that, while SMCP is useful, it doesn’t account for the types or significance of failures that the PM work order is intended to prevent. Look back at our example: a poorly greased chain might slightly slow down the chip conveyor whereas poor coolant quality can affect tool and machine life. Therefore, it is important to “look beyond the numbers” with SMCP – or any preventive maintenance KPI, for that matter.

Aside from measuring criticality, SMCP can bring attention to reasons why work orders are late. For example, perhaps tasks are held up because there aren’t enough technicians scheduled to keep up with the workload. It’s also possible that you underestimated how long it takes to complete the work. You might even have to reprioritize tasks so that habitually late tasks can be completed on time.

Track Your Preventive Maintenance with FTMaintenance

Effective preventive maintenance is the hallmark of any maintenance strategy. The preventive maintenance metrics provided in this article help you make smarter management decisions regarding maintenance operations. Tracking preventive maintenance data is best done in a CMMS, like FTMaintenance.

FTMaintenance allows you to craft and execute a master preventive maintenance plan for all of your assets. Additionally, FTMaintenance tracks the data you need for generating crucial maintenance management reports. Schedule a demo of FTMaintenance today to learn more.

For tips on how to improve your preventive maintenance plan, check out our blog post 12 Tips for Improving Your Preventive Maintenance Plan.

An inevitable result of the manufacturing process is the creation of waste, and it comes in many forms. Implementing lean manufacturing techniques enables organizations to target and eliminate waste, leading to more productivity and ultimately, higher profits.

Because the maintenance team is responsible for equipment maintenance, it must also eliminate waste in maintenance processes that threaten efficient production. This article provides an introduction to lean management and discusses how the maintenance team contributes to a lean manufacturing system.

What is Lean Manufacturing?

According to the American Society for Quality (ASQ), “lean manufacturing is a system of techniques and activities for running a manufacturing or service operation” with the goal of maximizing the value delivered to customers. This is done by eliminating waste (i.e., non-value-adding activities) at each stage of the production process.

Origins of Lean Manufacturing

Lean manufacturing originates in the automotive industry, starting with the founder of Ford Motor Company, Henry Ford. Ford’s moving assembly line process cut out much inefficiency from manual processing to make mass production possible. Over time, the Toyota Motor Corporation continued to improve upon Ford’s idea to create the Toyota Production System, which focuses on “the complete elimination of all waste in pursuit of the most efficient methods.”

Today, lean manufacturing concepts are used in many industries including:

• Automotive manufacturing
• Footwear and apparel manufacturing
• Textile manufacturing
• Healthcare
• Food and beverage
• Construction
• Government
• Hospitality

Principles of Lean Manufacturing

Image derived from Lean Enterprise Institute at https://www.lean.org/lexicon-terms/lean-thinking-and-practice/

There are 5 main lean manufacturing principles that guide organizations on how to optimize their production process:

1. Identify value: Understand the value customers place on your products (i.e., what problems they need to solve).
2. Map the value stream: Visualize every step of your manufacturing process, from raw materials to delivery, to identify which activities add value versus create waste.
3. Create flow: Optimize your manufacturing process by eliminating bottlenecks, reducing changeover time, and leveling production.
4. Establish pull: Manufacture product only when there is demand.
5. Seek perfection: Strive towards excellence by making ongoing, incremental changes towards your goal.

8 Wastes of Lean Manufacturing

If waste is to be eliminated, one must know what types of waste exist. As mentioned earlier, waste is any activity that does not add value to the customer. Lean manufacturing identifies several types of waste within the manufacturing process.

1. Transportation: Unnecessary transportation of employees, tools, inventory, or equipment
2. Inventory: Producing quantities of inventory that exceed demand
3. Motion: Unnecessary movement of people or equipment
4. Waiting: Idle time, such as waiting for materials to arrive or for equipment maintenance to be complete
5. Overproduction: Manufacturing product before it is truly needed
6. Over-processing: Adding features to a product that are not required by the customer
7. Defects: Producing products that are not fit for use, resulting in rework or scrap
8. Unused talent: Not taking worker’s ideas and input into account when making decisions

The Toyota Production System further organizes waste into the following three categories:

• Muda (wastefulness): Waste that is produce by unnecessary, non-value-adding activities, materials, and other work.
• Mura (unevenness): Waste due to fluctuations in demand, resulting in an uneven work pace.
• Muri (overburden): Waste caused by overworking people or machines; working in an unsustainable way.

Lean Manufacturing and Maintenance Management

Lean manufacturing focuses on production – so what does it mean for maintenance organizations? Since maintenance and production are so closely related, one could justify that adequate maintenance enables lean manufacturing. Therefore, any changes to the production process also require changes to the maintenance process.

For example, problems encountered in a continuous flow process shut down the entire production line, requiring maintenance to either respond quicker to downtime or implement proactive maintenance techniques that prevent such problems from occurring. Each of these solutions requires changes to maintenance operations, techniques, tools, and management.

Keep in mind that the lean philosophy applies to any process or function, including maintenance. “Lean maintenance” aims to optimize maintenance and asset management activities, which is commonly plagued with waste caused by excessive MRO inventory, over- or under-maintaining equipment, and inefficient maintenance tracking.

Implementing lean maintenance can improve productivity, reduce maintenance costs, increase asset reliability and longevity, and make the maintenance team look more competent. Additionally, lean maintenance gives you the ability to do more maintenance work with the same or fewer resources. Given the maintenance technician shortage, finding ways to reduce maintenance costs without losing employees is especially important.

Lean Tools and Techniques Used by Maintenance Organizations

Given its scope, lean manufacturing utilizes multiple tools and techniques to eliminate waste and improve efficiency. We have highlighted the lean tools most relevant to maintenance management in this article. A more comprehensive list is provided on LeanProduction.com.

Lean Tools

The following tools are part of the lean methodology in general, though we discuss how they can be applied to maintenance management.

5S

5S is an organization system that aims to create efficient, effective, and safe work environments. Also part of the Toyota Production System, 5S seeks to reduce waste in employee workspaces. 5S gets its name from the 5 steps it includes:

• Sort (seiri): Remove any unnecessary or unwanted items from the workspace.
• Set in Order (seiton): Arrange items in a logical, organized manner.
• Shine (seiso): Clean the workspace.
• Standardize (seiketsu): Make sorting, setting in order, and shining routine activities.
• Sustain (shitsuke): Form long-lasting habits and update as necessary.

One of the most common workspaces to improve through 5S is the maintenance storeroom. Storerooms in many organizations are messy, cluttered, and create several inefficiencies that lead to higher MRO inventory costs. However, an organized storeroom can improve efficiency by 10% to 30%. More on this topic can be found in our article, How to Organize Your Maintenance Storeroom.

Just-In-Time Inventory Management

Just-in-Time (JIT) inventory management is an inventory management technique that enables organizations to meet demand while working with minimal inventory. For production, this means only producing enough goods to satisfy customer orders. Materials are ordered to arrive “just in time” to fulfill the order.

In a maintenance context, demand is typically driven by preventive maintenance (PM) because tasks are scheduled and the required part quantities are known. Organizations may also refer to maintenance reports that show historical part usage trends to estimate demand for corrective maintenance (CM).

Using JIT inventory management for MRO items, organizations may opt not to stock particular items that can be sourced locally and obtained quickly when needed. Doing so saves storeroom space and inventory management effort. Just-in-Time inventory management is discussed further in our article, MRO Inventory Optimization Techniques.

Poka-yoke (Mistake-proofing)

Poka-yoke, or mistake-proofing, means to minimize the number of mistakes employees make in order to avoid defects, rework, or scrap. Maintenance managers can limit employee errors by:

• Improving the accuracy of data entry through barcode scanning
• Providing step-by-step instructions for routine maintenance tasks
• Developing and communicating clear policies and procedures
• Clearly labeling equipment, storerooms, stocking locations, and tools for easy identification
• Providing ongoing training opportunities
• Holding employees accountable for performing quality maintenance work
• Implementing a work order approvals process to ensure work is done correctly
• Providing quick access to a digital library of maintenance documentation

Putting measures in place to prevent common errors leads to vast improvements in the quality and consistency of maintenance work. This translates to improved asset reliability, extended asset life, and lower maintenance costs.

Kaizen (Continuous Improvement)

One of, if not the most important, element of lean is kaizen, meaning “change for the better”. The idea behind kaizen is to examine inefficient processes or recurring tasks and make small, incremental improvements over time. An important aspect of kaizen is to document your process and measure it over time to see if changes achieve the intended result.

Lean Maintenance Tools and Techniques

There are several tools and techniques maintenance teams utilize to support a lean manufacturing approach.

Computerized Maintenance Management System (CMMS) Software

Many maintenance organizations still rely on manual maintenance tracking systems to manage their maintenance operations. These outdated systems are simply too cumbersome and ineffective for managing today’s complex maintenance needs.

A computerized maintenance management system (CMMS)  is a centralized platform for documenting, managing, and tracking maintenance activities. It provides you with real-time access to important maintenance information, allowing you to increase your productivity and efficiency. Automated features reduce the burden of managing day-to-day administrative tasks related to work order management, maintenance planning and scheduling, asset management, and other aspects of your maintenance operation.

Total Productive Maintenance (TPM)

Total productive maintenance (TPM) is a system of maximizing asset availability by taking an organization-wide approach to maintenance. One of the main pillars of TPM is autonomous maintenance, which places the responsibility of performing simple preventive maintenance tasks on machine operators. Doing so increases the operator’s knowledge of their equipment, allowing them to spot and address small issues before they become big problems that cause downtime.

Failure Analysis

Unexpected asset failures result in lost production time. While many organizations simply treat the symptoms of failure in order to return machines to operation, others perform failure analysis to determine how to avoid future failures. There are many methods of failure analysis including:

• Failure, Cause, and Remedy Codes: the process of using a CMMS to codify and standardize documentation of the type of failure, its cause, and its solution.
• Root Cause Analysis (RCA): the process of identifying the origins of an asset failure and developing an approach to resolve it.
• Five Whys: a method of executing root cause analysis by asking “why” five times.
• Failure Modes and Effects Analysis (FMEA): a systematic way of determining all possible ways assets can fail, their potential causes, and risk to the organization.

Though each of these methods varies in complexity, all aim to prevent or mitigate the effects of failure, thereby minimizing interruptions to production.

Reliability-Centered Maintenance (RCM)

Reliability-centered maintenance (RCM) is a corporate-level, proactive maintenance strategy that determines the most cost-effective maintenance techniques to maximize asset reliability. It considers the inherent design of equipment, taking into account: equipment function and performance standards, functional failures, failure modes, and failure effects. Based on this analysis, organizations then determine the appropriate tasks to eliminate, detect, reduce the frequency of occurrence of, or reduce the impact of each failure.

As its name suggests, RCM is focused on reliability, or reducing the frequency of asset failure. Reliable assets perform their intended function for longer periods of time without failure (so long as they are used under their stated operating conditions). RCM reduces lost production time caused by unexpected failures and waiting for maintenance to make repairs.

Predictive Maintenance (PdM)

Predictive maintenance (PdM) is a maintenance technique that forecasts when assets will fail by analyzing real-time and historical asset performance data. Compared to preventive maintenance, which is performed according to set intervals, predictive maintenance allows maintenance to be scheduled and performed only when it is truly needed. As a result, the maintenance team can sharply reduce unscheduled downtime and the severity of failures, when they do occur. This leads to optimal availability, reliability, and production capacity.

Key Performance Indicators (KPIs)

Tracking key performance indicators (KPIs) helps you determine whether changes to your maintenance process are having the desired impact. The metrics you track depend largely on what’s important to your organization, the process you are trying to optimize, and the type of waste you seek to eliminate. Common lean maintenance KPIs include:

• Mean Time to Repair (MTTR)
• Mean Time Between Failure (MTBF)
• Overall Equipment Effectiveness (OEE)

Maximize the Efficiency of Your Maintenance Process with FTMaintenance Select

The main goal of lean manufacturing is to eliminate waste from the production process, which relies on the competence of the maintenance team. Using a CMMS like FTMaintenance Select is one of the best ways to create an efficient, mobilized, and connected maintenance team that supports lean initiatives. By automating essential tasks related to work order management, asset management, inventory management, and more, FTMaintenance Select empowers you to eliminate waste and make maintenance management easy. Request a demo today to learn more.

Key Takeaways:

• MRO inventory is critical to maintenance operations, yet not managed as closely as other inventory, leading to direct and indirect maintenance costs
• MRO inventory management requires the identification, specification, location, procurement, and control of inventoried items
• Computerized maintenance management system (CMMS) software, like FTMaintenance, is designed to help you effectively manage your maintenance inventory

Maintenance teams depend on hundreds to thousands of different materials and supplies to keep assets running. This type of inventory, known as maintenance, repair, and operations (MRO) inventory, includes spare parts, lubricants, tools, safety gear, and other consumables that do not make it into the final product (or service).

Yet, while 94% of industry professionals view MRO inventory as being extremely or somewhat important, it is typically not managed as closely as production inventory. As one can imagine, poorly managed inventory is a real headache for the maintenance department. This article explains MRO inventory management and how it impacts the maintenance process – and ultimately an organization’s bottom line.

What is MRO Inventory Management?

MRO inventory management, or maintenance inventory management, is the process of procuring, storing, using, and replenishing the materials and supplies used for maintaining assets at the lowest possible cost. This process involves ensuring you have stock on hand while factoring in available storage space and budget. To put it simply, the goal of MRO inventory management is to have the right stock at the right time and place, and at the right cost.

Why MRO Inventory Management is Important

The importance of a properly managed maintenance inventory is fairly clear when you consider all the direct and indirect costs. Consider the following common scenarios:

Production Stoppages

If MRO inventory keeps assets running, what happens when materials and supplies run out? Production screeches to a halt! Meanwhile, you pay a premium for expedited shipping while operators and technicians are on standby, waiting for parts to arrive. This major increase in downtime makes the total repair cost skyrocket. If you simply cannot wait to restore assets, you must use risky stopgap measures that could endanger product quality or safety.

Overstock

Having too much inventory can also be a problem. Perhaps you attempt to avoid stockouts by ordering extra parts, only to find that they are seldom used. Alternatively, maybe you panic-purchased a part you knew you had, but just couldn’t find at the time you needed it. In either case, excess inventory sits on a shelf, further cluttering your stockroom. Even worse, you cannot reclaim the money spent.

Losses in Productivity

Finally, let’s not forget how poor MRO inventory management affects day-to-day operations. By some estimates, technicians spend as much as 25% of their time trying to secure parts. While this may only increase downtime a little bit each time, it quickly adds up. Not to mention, there’s also a fair amount of frustration that goes along with not being able to find a part you need.

To remedy this problem, some technicians create their own “private” inventories of materials in their toolboxes or in desk drawers. Though it may be convenient for the individual, this inventory is not available for other technicians when needed. Due to the inaccurate stock counts, the organization may face production stoppages, overstock, duplicated orders, and other bottlenecks in the maintenance process.

Components of MRO Inventory Management

The core components of MRO inventory management are identification, location, procurement, and inventory control, described below. As you read each section, think about how each resolves the problems stated above.

Identification

Swift, effective maintenance relies on knowing exactly what MRO items are kept in stock in your maintenance inventory. Maintenance teams are often judged based on response time, so being able to quickly identify the materials you need for a job is crucial.

Consider that manufacturers may use different parts in their designs, even for similar types of equipment. It is possible that no two machines may share the same parts or require the same supplies. This reality is even more visible when looking at a supplier’s parts catalog. For example, hardware supplier McMaster-Carr lists over 56,000 different types of fasteners!

Maintenance inventory management can be improved simply by identifying what items are stocked. To further assist with identification on an asset level, maintenance teams reference an equipment bill of materials.

Specification

Related to identification is specification. The specification provides the requirements of the spare parts or supplies to ensure an asset’s proper operation. For example, a standard screw has the following attributes, each of which is considered during an asset’s design:

• Thread size
• Length
• Diameter
• Head type (e.g., socket, rounded, flat, hex, etc.)
• Material (e.g., brass, lead, steel, zinc, etc.)
• Drive style (e.g., Phillips, square, slotted, etc.)

How does this affect maintenance? Part specifications define exactly what is needed for optimal asset performance and dictate the tools used to install or utilize the part. In the case of the screw, it’s more efficient for a technician to know which wrench or drill bit will be needed ahead of time. For items that require specialized tools, technicians benefit by ensuring they are available to be checked out ahead of time.

Specifications are also useful when alternative parts or supplies are needed. Tracking specification helps you identify similar, interchangeable parts. In terms of purchasing and reordering, specifications are used to identify vendors that carry the part.

A third way that specification affects maintenance is organization. A stockroom employee may arrange inventory items by their characteristics, such as size, weight, material, shape, and so on. As you’ll read in the next section, an organized stockroom makes MRO items easier to find for technicians.

Location

Once you know what MRO inventory items you have in stock, you must be able to locate them. As mentioned earlier, poor organization leads to unnecessary costs related to expedited orders or losses in productivity. Knowing exactly where MRO inventory items are stored helps improve responsiveness and allows you to fulfill maintenance work orders more efficiently. Locating inventory comes down to creating an organization system and communicating that system with others.

Organization

Depending on the size of your organization, MRO inventory may be spread out across multiple stockrooms or contained within a single storage location. Within those locations, there may be multiple aisles, racks, shelves, and bins. Technicians may keep a personal stock of items in tool chests or service vehicles. Because there are so many places MRO inventory might be stored, you must have a system for organizing the items.

In a grocery store, for example, aisles are numbered, and related items are typically located together. Ask any store clerk about the location of an item, and they can surely tell you what section and aisle to look in. They may even be able to tell you a more precise location, such as “about halfway down, at eye level,” if not the exact shelf.

Similarly, stockrooms and storage locations ordinarily use a letter or number scheme to organize their aisles, racks, shelves, and bins. Like a grocery store, physical labels are affixed to the location, making inventory items easy to find.

Communication

Once items are organized, you must communicate the organization system to others. Appropriate stakeholders should know exactly how things are organized and understand how to interpret naming or numbering conventions. Locations can also be communicated through a maintenance inventory management system such as computerized maintenance management system (CMMS) software.

Procurement

Procurement is the process of obtaining goods or services, such as MRO inventory items, in a cost-effective and time efficient manner. It includes all the activities that take place from the initial requisition to final payment and receipt of goods. In simple terms, the procurement process is how you acquire the MRO inventory items needed for maintenance jobs.

The level of authority given to the maintenance team to make purchases differs from organization to organization. In general, the procurement process will look similar to the following:

1. Identify MRO Inventory Items Needed: Determine what materials and supplies – and stocking levels – are needed for efficient maintenance activities.
2. Generate Purchase Requisition: Create a purchase requisition that includes details such as what items are needed, the recommended vendor, and the date the items are required. Submit the requisition to for approval.
3. Get Purchase Approval: Submit the requisition for review. The purchaser will assess the requisition for completeness and priority. Assuming that the requisition is approved, proceed with the purchase.
4. Select Vendor(s): Identify the best vendor to fulfill the order requirements. Vendor selection criteria may include price, quantity ordered, speed of delivery, customer service, and prior relationships.
5. Create and Issue Purchase Order: Create a purchase order (PO) and issue to the vendor.
6. Receive Order: When the shipment is received, review the delivery, record the items in the inventory tracking system, and stock the items in the appropriate location(s).

Inventory Control

Inventory control ensures the right amount of stock available to the organization so that maintenance can be performed efficiently. It involves knowing what you have, where it is located, and how much of it is on hand. When combined, this information helps those who manage MRO inventory avoid stockouts and ultimately, costly asset downtime.

On the surface, it may sound like inventory control simply means reordering supplies when quantities are low. However, this is only one aspect of inventory control. Proper inventory control also includes regularly counting stock, tracking usage and movement, and anticipating future demand. When it comes to replenishing stock, you must also think about when to place orders, delivery lead times, available storage space, and ways to minimize ordering costs.

MRO Inventory Management Tools

Due to the relatively lax requirements of managing maintenance inventory (compared to other inventory), MRO management tools are typically less robust. In fact, it is not unusual for small businesses to have administrative staff manually track MRO inventory in spreadsheets. Large organizations use enterprise resource planning (ERP) software, though the MRO inventory management capability is often lacking.

Effective maintenance teams benefit from using computerized maintenance management system (CMMS) software for inventory management. With a CMMS, you can leverage functionality designed specifically to help you manage your maintenance inventory. A good CMMS provides the following:

• Comprehensive inventory records
• Automatic MRO inventory count updates
• Reorder point notifications
• Inventory cost tracking
• Vendor and supplier management
• Purchasing capability
• Inventory-focused maintenance reports

Read Cadeco Industries Case Study

Manage MRO Inventory with FTMaintenance

The disorganization of MRO inventory management means there’s ample opportunity for improvement. In fact, some organizations estimate that proper MRO inventory management reduced their inventory spending by as much as 25%!

With FTMaintenance, you can take advantage of these cost savings while increasing your asset’s availability. FTMaintenance CMMS software helps organizations improve their MRO inventory management processes and procedures. Learn more about FTMaintenance inventory management system software.