Enhancing service levels while reducing working capital and minimizing downtime are crucial tasks for maintenance, repairs, and operations (MRO) teams operating in the aftermarket supply chain. Despite numerous challenges like finding spare parts and cutting downtime, inventory management emerges as a common headache, ranking only behind downtime in spare parts inventory issues according to a recent survey. To boost productivity and minimize losses, a well-structured and precisely monitored MRO inventory management system is essential. Surprisingly, effective MRO inventory control can deliver significant advantages compared to production inventory management, facilitating the avoidance of wastage, misplacement, and unaccounted-for or idle inventory. By streamlining consumables management and preventing stockouts, MRO inventory management can be optimized for optimal efficiency and cost-effectiveness.

Challenges in Managing MRO Inventory

Below are some of the common difficulties encountered by MRO organisations, warehouse managers, and teams when it comes to managing MRO inventory:

Oversight of Decentralized and Vast Supplier Networks

Consolidating the network of suppliers to align with unplanned/reactive demand for varied consumables can be difficult without nurturing strategic vendor relationships. This oversight of decentralized and vast supplier networks requires careful management and coordination to ensure seamless supply chain operations. It is essential to prioritize building strong partnerships with suppliers to effectively meet the evolving demands of the business and maintain a competitive edge in the market.

Organizing Inventory into Segments

Organizing MRO inventory into segments can become challenging due to their consumable nature and secondary classification compared to production inventory. This can lead to difficulties in tracking and monitoring these items effectively. Segmenting inventory can help to overcome these challenges and improve the management of MRO supplies.

Managing Levels of Overstock Inventory

Maintaining high levels of overstock inventory can lead to increased holding costs and a higher risk of inventory becoming obsolete. It is important to manage these levels carefully to prevent unnecessary expenses and ensure the stock remains valuable.

Managing Obsolete Inventory

Businesses need to be proactive in managing their obsolete inventory to optimize their MRO (maintenance, repair, and operations) strategy. While it may be tempting to simply ignore obsolete inventory stored in easily accessible locations, the cost of maintaining these items can impact savings in the long run. It is important for businesses to regularly evaluate and dispose of obsolete inventory to ensure efficiency and cost-effectiveness in their operations.

Predicting Demand and Supply

Predicting demand and supply for maintenance and repair operations can be challenging due to the irregular and job-specific nature of the need. This difficulty in predicting demand can lead to issues in managing timely supply, resulting in wasted time. Alongside these challenges, high Total Cost of Ownership (TCO) for inventory optimization tools, excess slow-moving units, and limited availability of relevant skill sets also impede efficient MRO operations. Despite these obstacles, it is possible to track MRO inventory efficiently for maximized benefits. Inventory managers can optimize MRO inventory in supply chains by implementing strategies to address these challenges.

How to Improve MRO Inventory Management?

Improving MRO inventory management: focus on key aspects like implementing better organization and tracking, using barcode scanners, establishing reorder points, maintaining accurate records, conducting regular audits and reviews, investing in efficient practices for cost savings and operational efficiency. Below listed some of key aspects for improving MRO Inventory Management system:

Implementing ABC Classification

Establish a standardized classification format to streamline the categorization of all necessary consumables. This will facilitate tracking of these items. For instance, a low-cost yet frequently used accessory can be categorized accordingly, enabling businesses to pinpoint items that require increased monitoring to minimize waste and losses.

Establish and track KPIs

Identify KPIs to assess the effectiveness of the existing inventory management system in achieving desired outcomes. KPIs can provide insights into the level of cost savings in comparison to the level of resources invested.

Keep EBOM Up-to-Date

Regularly updating the equipment BOM is essential for accurately comparing material quantities with the bill. This process helps identify any instances of wastage, misplacement, or theft. Whenever a new part replaces an old one, make sure to update the EBOM accordingly. If old spares or accessories are no longer usable, classify them as obsolete and update the records. It's important to always submit formal requests, even for smaller items.

Leverage Managed MRO Services

Utilize outsourcing and managed MRO services to streamline inventory management. Opting for third-party assistance can simplify the process and allow teams to concentrate on their primary responsibilities. Engaging experts in managed services and consulting for MRO inventory management will guarantee meticulous tracking of consumables.

Efficiently Store MRO Inventory

Properly storing parts and accessories is crucial for effective record keeping and ensuring prompt availability. It is essential to consider potential manual errors, such as accidental damage while stocking or using items. Assess which components require special handling and allocate suitable storage space for them.

Identify and Stock Critical Components

Ensure critical components are always in stock to prevent downtime and potential losses. Warehouse managers must be vigilant in storing and tracking the usage of high-usage repair items to maintain smooth operations.

Improve Communication

It is common for materials to be transferred between various business units. To prevent losses due to theft or misplacement, it is essential to document this movement of items. Consider utilizing Kanban cards or implementing a streamlined inventory movement system for efficiency.

Implement a Unified ERP Solution

By utilizing a centralized ERP system like Nirmalya Enterprise Platform Suite, alongside advanced inventory management techniques, you can streamline tracking processes, maintain timely supply levels, and effectively address any gaps in your operations. This integration will ultimately lead to significant time and resource savings.

Effectively Manage Undiscovered Inventory

Frequently, inventory labeled as "hidden" is stored in toolboxes, shelves, and closets, making it challenging to locate when needed. Therefore, it is essential to implement an organized storage system to ensure timely access. It is recommended to store these items in centralized locations rather than scattered across various unidentified areas.

Training MRO Teams

Regularly educating members of MRO teams on the significance of following standardized inventory management practices is highly beneficial.

Leverage MRO Analytics

Utilize MRO analytical tools to effectively manage data, track usage patterns, and forecast demand for MRO parts. These tools can identify pricing variations, duplicate records, and enable metric comparisons to optimize costs. Additionally, they can uncover new insights that traditional record management systems may overlook.

Enhancing MRO Inventory Optimization with Nirmalya Enterprise Platform Suite

Nirmalya Enterprise Platform Suite, equipped with Business Intelligence and AI capabilities, offers comprehensive solutions for enterprises looking to streamline their business processes and operations. This integrated suite is specifically designed to unite individuals, procedures, and technology in one cohesive platform, empowering enterprises to efficiently manage their business operations without relying on external software or tools. The suite provides all the necessary components for successful business management, ensuring enterprises have everything they need at their fingertips.

Nirmalya Enterprise Platform Suite offers a wide range of modules including supply chain management, human capital management, inventory management, electronic document management, vendor management, enterprise asset management, facilities management, EHS compliance, customer relations, manufacturing execution, business intelligence, dashboard and analytics, among other features.

Supply chain management is crucial for enterprises, with Nirmalya Supply Chain Management addressing the real-time issues businesses face. To ensure supply chain efficiency, businesses should have a disciplined and methodical MRO inventory strategy that utilizes seasoned expertise and best practices like innovative pricing models and analytics. MRO leaders must identify areas for inventory optimization and ensure their teams have the necessary skill sets to handle this task effectively. Managing MRO inventory can be a challenging job, but with the right approach, businesses can benefit greatly from optimized inventory management.

Nirmalya Enterprise Platform Suite offers interactive dashboards and analytics for various aspects of enterprise management, including supply chain, warehouse, logistics, workforce, asset, and operational management. By defining key performance indicators and regularly monitoring data, enterprises can make data-driven decisions to enhance operations. With seamless integration of procurement and order fulfillment, bottlenecks can be quickly identified and metrics analyzed for increased productivity. By reducing costs, optimizing profitability, and exceeding customer expectations, supply chain logistics can be elevated. The suite also helps enhance resilience, streamline contract compliance, and provide insights, control, and visibility for an improved customer experience.

For further information on how Nirmalya Enterprise Platform Suite can enhance enterprises and drive business growth, kindly reach out to us today.