ores inventory. They do not trust that parts are really there in the quantities stated, or that they are still usable. They might even keep a private cache of parts hidden somewhere for their own use. Or they might by-pass Stores altogether and just order the part directly from the supplier. These scenarios are real and they add further to cosYou don’t have to be a genius to recognize that a lot of money is tied up in MRO inventory ….especially if your business requires the use of capital-intensive equipment. Literally millions of dollars are tied up in spare parts for day-to-day Maintenance, Repair and Operations (MRO).

Historically, no one ever really ‘owned’ inventory, so stocking another item “just in case” had very few, if any repercussions. Inventory was often seen as a necessary evil of doing business. The term Inventory Management was almost an oxymoron. There were few procedures for setting up an item, no standard structure or format. Item information was written in the manner of each individual….first onto cards, which were later transcribed into a computer system. More often than not, there were no stock review processes. The only ‘management’ of inventory came with its annual physical count undertaken for financial reporting purposes.

Typically over time, Stores inventory grew… and grew… and grew… to the point where the numbers were just too big to ignore. That’s when inventory gets the attention of management: when the numbers are just too large to ignore any longer. After all, that’s real money tied up in parts. Good money… paid out to suppliers… for maintenance workers’ peace of mind.

The ironic thing is that maintenance workers do not often have much confidence in Stores inventory. They do not trust that parts are really there in the quantities stated, or that they are still usable. They might even keep a private cache of parts hidden somewhere for their own use. Or they might by-pass Stores altogether and just order the part directly from the supplier. These scenarios are real and they add further to cost

ocking another item “just in case” had very few, if any repercussions. Inventory was often seen as a necessary evil of doing business. The term Inventory Management was almost an oxymoron. There were few procedures for setting up an item, no standard structure or format. Item information was written in the manner of each individual….first onto cards, which were later transcribed into a computer system. More often than not, there were no stock review processes. The only ‘management’ of inventory came with its annual physical count undertaken for financial reporting purposes.

Typically over time, Stores inventory grew… and grew… and grew… to the point where the numbers were just too big to ignore. That’s when inventory gets the attention of management: when the numbers are just too large to ignore any longer. After all, that’s real money tied up in parts. Good money… paid out to suppliers… for maintenance workers’ peace of mind.

The ironic thing is that maintenance workers do not often have much confidence in Stores inventory. They do not trust that parts are really there in the quantities stated, or that they are still usable. They might even keep a private cache of parts hidden somewhere for their own use. Or they might by-pass Stores altogether and just order the part directly from the supplier. These scenarios are real and they add further to cos

cards, which were later transcribed into a computer system. More often than not, there were no stock review processes. The only ‘management’ of inventory came with its annual physical count undertaken for financial reporting purposes.

Typically over time, Stores inventory grew… and grew… and grew… to the point where the numbers were just too big to ignore. That’s when inventory gets the attention of management: when the numbers are just too large to ignore any longer. After all, that’s real money tied up in parts. Good money… paid out to suppliers… for maintenance workers’ peace of mind.

The ironic thing is that maintenance workers do not often have much confidence in Stores inventory. They do not trust that parts are really there in the quantities stated, or that they are still usable. They might even keep a private cache of parts hidden somewhere for their own use. Or they might by-pass Stores altogether and just order the part directly from the supplier. These scenarios are real and they add further to cos

oo big to ignore. That’s when inventory gets the attention of management: when the numbers are just too large to ignore any longer. After all, that’s real money tied up in parts. Good money… paid out to suppliers… for maintenance workers’ peace of mind.

The ironic thing is that maintenance workers do not often have much confidence in Stores inventory. They do not trust that parts are really there in the quantities stated, or that they are still usable. They might even keep a private cache of parts hidden somewhere for their own use. Or they might by-pass Stores altogether and just order the part directly from the supplier. These scenarios are real and they add further to cos

ores inventory. They do not trust that parts are really there in the quantities stated, or that they are still usable. They might even keep a private cache of parts hidden somewhere for their own use. Or they might by-pass Stores altogether and just order the part directly from the supplier. These scenarios are real and they add further to costs.

When a formal inventory review is undertaken, we often find that unfortunately, many item descriptions are inadequate, with spelling errors or missing manufacturer names and/or part numbers. Often the part descriptions are unrecognizable by a tradesperson.

Before any inventory analysis can take place, inventory item description data must first be cleansed. Any sort of benchmarking activity requires that you know your starting point (i.e. what you currently have on hand). Once data has been cleansed, we typically find duplicate items ranging from 5% to 15% within a given site. The percentage of commonality of items across multi-site companies can range as high as 25%.

Inventory can then be sorted into typical commodity groups: Bearings, Industrial Supplies, Electrical, Instrumentation, Fluid Power, and Pipes, Valves & Fittings. Commodity groups can then br segmented into categories: required active, excess active, and inactive. Required Active inventory includes commonly used parts that must be stocked. Excess Active inventory is the overstock of Required Active items (i.e too much of a good thing).

Inactive items can be further segmented into critical spares, slow-moving, and obsolete materials. Critical spares are items essential for the business to run…stocking out would significantly impact production quality, safety, or costs. Slow-