Do you remember hearing the story of Goldilocks and the Three Bears as a kid? In the fairytale, Goldilocks samples the bears’ three bowls of porridge. One is too hot, one is too cold, and one is just the right temperature. The Goldilocks analogy can be applied to inventory management—you don’t want to have too much or too little inventory, but you need to find the amount of parts that is just right. We’re going to discuss MRO inventory management challenges organizations face, and how you can manage your inventory with computerized maintenance management system (CMMS) software.
Inventory Management Challenges
The main problems with inventory management are having a surplus or overstock of spare parts inventory, not having enough parts in stock, and being unable to locate the parts you need quickly. There are also additional challenges some organizations face, specifically with MRO inventory management.
Overstock, also called inventory surplus, is a common stock management problem. Even though it can sometimes be difficult to keep spare parts inventory in stock, according to Plant Services, only 8-10% of spare parts inventory gets used each year. Maintenance teams often end up wasting money on unnecessary orders. This can lead to lack of storage space and cluttered stockrooms. When money is wasted on things like this, your budget is reduced. Money that was spent on inventory could have been used for other things. If parts sit around unused long enough, the assets might be decommissioned and then the parts end up being scrapped. All of this reflects poorly on maintenance’s ability to manage MRO inventory.
Insufficient Stocking Levels
Not having enough inventory parts in stock (sometimes called under stock) causes more immediate stock management problems. When a machine goes down and a part needed to repair it is not in stock, production can be down for days or even weeks while waiting for the part shipment to come in. Alternatively, you might pay expedited shipping fees to receive it as soon as possible. This major increase in the length of machine downtime can skyrocket the total repair cost. In some cases, maintenance teams do what they can to reduce expenses while waiting, using risky stopgap measures to keep production moving, which can lead to safety hazards and sub-par product quality.
Other problems with MRO inventory management resulting from insufficient stock levels include purchasing parts when the per-unit price is higher due to urgent demand. Instead, the parts could have been ordered earlier when the per-unit price was lower. If shipments are missed, that creates delays in production, leading to strained client relationships.
Difficulty locating a needed part wastes valuable time. Up to 25% of maintenance technicians’ time per day is spent searching for spare parts. This can add up to thousands of dollars in wasted labor costs. Having repair parts stored across multiple onsite stockrooms can make finding the needed part even more difficult.
Shrinkage, which occurs when parts go missing, are unaccounted for in inventory records, or get damaged, is another big inventory management challenge. Inaccurate counts can contribute to shrinkage, as well as overstock or under stock. When a part gets used and no one logs it, this makes actual inventory lower than the recorded counts. Conversely, sometimes more parts are available than recorded in part counts, leading to waste and ordering too many parts. Parts could also be unaccounted for because there is no communication of when items like tools are checked out.
Despite these challenges, managing MRO inventory effectively is feasible for every organization with the use of spare parts inventory management software such as a CMMS system.
CMMS Inventory Management Software Features and Benefits
The overall goal of inventory management is optimizing inventory (having just the right levels of parts in inventory while minimizing the purchasing costs) for maintenance operations. CMMS inventory management software offers capabilities to make achieving your inventory goals easier.
- Automatic Reorder Notifications: Set reorder points so that you’re notified automatically when a predefined stock level is reached. You’ll know immediately when it’s time to purchase additional parts. It takes out the guesswork so that you don’t order too many parts when you don’t need them.
- Inventory Cycle Counts: Keep track of the number of times specific parts are reordered, with the option to classify them according to importance. Critical part inventory cycle counts can be set to occur more often than counts for less important parts.
- Timely Shipment Scheduling: Schedule parts shipments close to when repairs or preventive maintenance tasks need to be completed.
- Detailed Location Data: Maintain a detailed record of every part’s location down to the bin number, and whether or not it’s been checked in or out recently. No more frantically searching a stockroom hoping the part you need is there.
- Detailed Vendor Records: Store your vendors’ contact information, along with pricing for each part and suppliers’ shipment lead times for each part in your CMMS database.
- Purchase Orders: Quickly create purchase orders from within CMMS software to order all the parts you need at once in a concise manner. This capability makes it easier to keep track of inventory numbers and costs.
Discover how Ranger Boats improved their inventory management.
FTMaintenance CMMS Facilitates Inventory Management
FTMaintenance is an industry-leading CMMS with MRO inventory management software features. It’s a tool to help you maintain that just right balance of inventory levels. With FTMaintenance, you’ll be able to set automatic inventory re-order points and adjust them for multiple stockrooms. Tools for inventory auditing will ensure that your physical and recorded inventory counts match. You’ll be able to quickly find the parts you need. FTMaintenance CMMS makes it easy to check parts in and out of inventory, automatically debiting parts from counts when you close work orders.
Detailed information on all MRO parts maintained in your inventory such as replacement parts (valves, compressors, pumps), safety equipment, cleaning consumables, and plant upkeep supplies (lubricants, filters), will be freely available. FTMaintenance stores comprehensive data about your spare parts so you’ll always know where they are located, how much are in stock, what they cost, and more. Automatic inventory count updates ensure you always have an accurate picture of what parts are in stock or when to reorder. Find out more about FTMaintenance inventory management software features.