Where to start? Building a world class MRO process

In practice, it’s easier to ‘build’ a world class MRO process from one that is mature and functioning, rather than from scratch.

03/21/2013


Courtesy: Marshall InstituteIn practice, it’s easier to ‘build’ a world class MRO process from one that is mature and functioning, rather than from scratch. Consider your process that has been inefficiently working for years; delivery both poor service and great inconvenience. This is truly a more enviable position than starting with an empty warehouse.

Why? Think of all the great examples you already have of “how not to do something”. Thomas Edison so cleverly stated that he didn’t have thousands of failed experiments when creating a light bulb; he just learned 10,000 ways not to do it.

We’ll save you 9,991 attempts by giving you a 9 step outline to use in building a world class MRO process. It’s like flipping a switch; after all, what could be easier?

Step 1: Conduct a parts needs analysis

How do parts end up in the storeroom? That’s a rhetorical question; the most likely scenario is “we really don’t know”. Technically, when the equipment was first commissioned, the OEM should have provided a suggested spare parts list. From that initial offering, and after years of use, the maintenance/engineering departments add to (and theoretically subtract from) the MRO materials stocked for that specific machine. After a long disconnected relationship between the storeroom and maintenance, we end up with having lots of parts, but never the right part.

All MRO material in the storeroom should be in active support of current plant equipment. If the spare components do not meet this threshold, remove them. Establish a priority of equipment to consider for and MRO review. Determine what you have in stock, in support of that equipment, review previous work order history and interview the skilled trades and get a sense of what should be stocked and in what quantity.

Use a methodology like an ABC classification to break down your MRO material in terms of its criticality. Also, create the critical spare parts formula to carefully consider and stock these most valuable items.

And, most importantly, make sure your MRO material on hand is in perfect alignment with your maintenance strategy. This is the oft forgotten step.

Step 2: Setup/Layout

Nothing sets the tone for service and convenience like the layout of the area itself. Another ABC type of classification could be applied to establish a logical layout. A very effective layout might include an open stock area, one that might have been referred to as ‘free stock’ in the past. Behind the counter, MRO items are stocked so that the ‘A’ category items are closest to the window. Items considered to be ‘A’ items follow that classic Pareto-80/20 rule. ‘A’ items are those items that make up 80% of the issues. Further from the window are ‘B’ then ‘C’ items. Large, bulk items are further back still, and then critical spare parts.

Step 3: Staffing

Company attempts and insistence on keeping overhead low has really affected MRO staffing levels. This can negatively affect both service levels and security/control of stock as well. At a minimum, store room staffing should be consistent with plant operations; 24x7 or 8x5. Also, consider all the functions of store room personnel: receiving, reconciling, kitting, issuing, etc. There is a limit to line-items per store room clerk.

Step 4: Control

If it is impossible to staff the storeroom 24/7, access has got to be limited and controlled. There is no gray area in this mandate. All receipts and issues are entered into the CMMS, and all items issued from stores are assigned to a work order; again, no gray area.

The ‘control’ aspect of a world class storeroom also includes low-level authority to handle inventory adjustments with slow moving, idle, or obsolete parts.

Step 5: Managing the process

At some point, in fact, a requirement to be truly world class, all the processes performed in the storeroom have to be reduced to processes IN WRITING. How can we possibly expect to have our procedures followed if they aren’t written down? Write down the process, train people to the process. Modify the process as necessary.

A common prescription for most companies is to charter and launch as Stores Stock Committee. This high level oversight committed guides and supports the tactical work performed by those in the storeroom.

Step 6: Service

Window issues should be prompt and efficient. The written process steps indicating the correct method to use should clearly identify how the service is prompt and efficient. Keep it simple; the idea is to develop process steps that are easy to repeat. Practice doesn’t make perfect as much as practice makes permanent.

Storeroom kitting for enhanced planning and scheduling are processes within the storeroom sphere of responsibility that have to be considered when developing a service definition.

Step 7: Procedures

The list of procedures is far too long to list in a blog. Suffice to say, the list is divided into tactical and strategic. The strategic concerns are big, fiscally critical ‘decisions’ such as reorder point and economic order quantities. Parts standardization and critical spares evaluations are other high level strategic considerations.

The tactical sphere provides attention to the more dynamic and personal aspects of an MRO operation: cycle counting, receiving, purchasing, etc.

Step 8: Options

Some world class storerooms also participate in classic storeroom activities; they just do them at a very high level of performance. These include tool management, managing a project spare parts laydown area, and chemical/flammable storage.

Step 9: Supplier Involvement

A high performing storeroom and MRO operation tends to be very effective at establishing strategic sourcing relationships. The true world class processes can handle expanded open stock offerings, vendor managed inventory, and conduct supplier performance audits.

John L. Ross is a senior consultant at The Marshall Institute.



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...
Strategic outsourcing delivers efficiency; Sleeve bearing clearance; Causes of water hammer; Improve air quality; Maintenance safety; GAMS preview
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
Flexible offshore fire protection; Big Data's impact on operations; Bridging the skills gap; Identifying security risks
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
Applying network redundancy; Overcoming loop tuning challenges; PID control and networks
Putting COPS into context; Designing medium-voltage electrical systems; Planning and designing resilient, efficient data centers; The nine steps of designing generator fuel systems
Package boilers; Natural gas infrared heating; Thermal treasure; Standby generation; Natural gas supports green efforts

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