A well-run storeroom preserves capital, saves time and money

Following best practices and running an efficient, up-to-date maintenance repair and operations (MRO) storeroom can save the company a great deal of money in the long-term with less production downtime and greater use of technical resources

06/27/2013


The first indication that a maintenance repair and operations (MRO) storeroom isn’t run well is the response you get from the maintenance technicians when you ask their opinion of how the storeroom is performing. The comments are usually, “We can’t depend on our storeroom for the right parts” or “They never have the parts I need to make the needed repairs.” These comments reflect a storeroom that is in trouble and costing the business money in excessive production downtime, low equipment reliability and low utilization of technical resources.

Not having the right part or not having the parts when they are needed are also symptoms of other internal issues in the storeroom. Not having the right part is a primary indication that the Equipment Bill of Material (EBOM) isn’t accurate and the wrong parts are being stocked in the storeroom. The EBOM is used by the storeroom to determine which parts are to be stocked on site and other parts that can be purchased as needed to reduce dollars invested in inventory.

An inventory that doesn’t have the parts when needed is an indication that the stocking levels are not adequate to support the maintenance requirements to perform the needed repairs. Conducting an annual review of the item stocking level to evaluate the reorder point, minimum and maximum stocking levels, safety stock requirements and annual item usage provides insight into future stocking requirements to prevent item stock outs. Reviewing stocking levels and monitoring inventory usage reports also identifies obsolete and excess inventory that consumes inventory dollars and robs valuable space in the storeroom. 

Transforming a storeroom from a business liability to a business asset that has the right parts when requested requires the implementation of basic MRO storeroom best practices.

What are MRO storeroom best practices? A storeroom applying best practices includes:

  • A storeroom layout that effectively reduces waste and increases storeroom staff utilization
  • Documented work processes and an auditing procedure to promote value added continuous improvement activities
  • An inventory locator system that organizes inventory by commodity grouping of spare parts. Commodity grouping of inventory locates motors with motors, pumps with pumps, bearings with bearings.
  • A storeroom security policy that restricts access to approved employees 
  • A storeroom staff that is trained in storeroom operation, safe working habits, stores performance measures and inventory management practices
  • Data management of item description, manufacturer and item number. Corrupted data increases search time, causes duplicate entry of items, increases the time to generate an accurate purchase request, and causes errors in inventory orders.

 

 

 

 

 

Key performance measures reported weekly or monthly. The basic key performance measures are inventory value, inventory activity, inventory receipts/issues, requisition fill rate, inventory turns, inventory accuracy and cycle account adjustments to inventory. 

According to data collected from organizations that have implemented MRO storeroom best practices, these organizations were able to:

  • Increase maintenance technician utilization by 12 to 15%
  • Reduce MRO material costs by 20 to 30%
  • Reduce equipment unplanned downtime by 3 to 7% 

 

 

The MRO storeroom has several partners that support and advise the storeroom supervisor on what to stock and the suggested minimum and maximum stocking levels. The decision to stock a part starts with the reliability engineer, the maintenance planner, procurement/buyer, and ultimately the maintenance technician.

The reliability engineer’s role is to define the part criticality and suggest if the part should be stocked on site or purchased as needed. The maintenance planner and maintenance technicians have a good understanding of the equipment and have the practical knowledge of what parts or components will have an immediate impact on safety, the environment or production if they were to fail.

The buyer’s role is to define the order lead time and part availability from the supplier. The order lead time has several definitions within an organization. The order lead time that should be used is defined by the supplier and is the time from when the purchase order enters the suppliers order log until the shipment leaves the suppliers shipping dock.

All too often, the storeroom is operating without the support of these partners, which leads to the wrong parts being stocked in inventory, obsolete items not removed from the inventory and parts for equipment modification not updated in the Equipment Bill of Material. These are all key activities to maintaining a valid MRO inventory and an efficiently run storeroom. 

Wally Wilson, CMRP, CPIM, has more than 25 years experience in plant management with three Fortune 500 corporations. He is a senior subject matter expert specializing in materials management with Life Cycle Engineering. You can contact him at wwilson@LCE.com. 

Read about how KPIs can improve your company below.



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
World-class maintenance: The three keys to success - Deploy people, process and technology; 2016 Lubrication Guide; Why hydraulic systems get hot
Your leaks start here: Take a disciplined approach with your hydraulic system; U.S. presence at Hannover Messe a rousing success
Hannover Messe 2016: Taking hold of the future - Partner Country status spotlights U.S. manufacturing; Honoring manufacturing excellence: The 2015 Product of the Year Winners
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Digital oilfields: Integrated HMI/SCADA systems enable smarter data acquisition; Real-world impact of simulation; Electric actuator technology prospers in production fields
Improving flowmeter calibration; Selecting flowmeters for natural gas; Case study: Streamlining assembly systems using PC-based control; CLPM: Improving process efficiency, throughput
Putting COPS into context; Designing medium-voltage electrical systems; Planning and designing resilient, efficient data centers; The nine steps of designing generator fuel systems
Warehouse winter comfort: The HTHV solution; Cooling with natural gas; Plastics industry booming

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me