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Rethinking MRO inventory in a digital age

I started my first job back in the "dark ages", before smart phones and the internet. You know, 1990? I worked for a mom and pop machine tool distributor. There I spent my days helping customers purchase replacement parts and tooling for large OEM operations. And, in my spare time, I would inventory "returned" parts that had been laying around for the better part of a decade without supporting documentation.

The inventory work was challenging, but I was fortunate that most of the parts originated from a small pool of manufacturers, were easy to classify (tooling; punches and dies) and usually had some physical markings distinguishing the manufacturer name and part number. With these identifiers and a bit of industry knowledge, I had everything I needed to create an accurate part description to record in a basic spreadsheet. 

Today, companies still have to identify and maintain accurate inventory, but with added complexity. In MRO storerooms at manufacturing facilities it's routine to implement centralized enterprise asset management (EAM or CMMS) systems to govern numerous plant locations. The business intentions are good: centralizing information on plant assets gains efficiencies across locations and provides clarity to facilities maintenance and procurement organizations. However, when you consider that each location has historically operated with different IT systems, hundreds (if not thousands) of plant-specific trading partners and unique data standards, the only thing that's clear is how inconsistent and incomplete comparative asset information is. One storeroom manager's "carriage bolt" is another storeroom manager's "wood screw". 

Rightly so, companies must standardize their asset information. Therein lies the greatest challenge. Sure, solid standards exist to help an MRO storeroom classify its item data at a serviceable level (e.g. UNSPSC and eCLASS), but there will (and frankly should) be debate on how thoroughly asset data is standardized and what value it returns. Some companies elect to classify their asset information three to four levels deep (category, class, sub-class, with a few attributes sprinkled in) so there is little ambiguity on what an item actually is.  This ensures better search and transparency across all MRO storerooms, assists in inventory transfer, reduces downtimes, and helps leverage contracts with suppliers. But beware… if users of this data don't understand the organizational value and aren't mandated to uphold the standards, it may return to a state of despair. 

Inevitably in this process the dilemma of deciding on items that rest in inventory but have no "system-of-record" (i.e., quarantines) will also surface. Companies often overlook these items, which never quite made the grade when it was time to enter in system data, but are valuable organizational assets.  Like my experience at the mom and pop distributor, to truly level-set a storeroom sometimes you have to roll-up your sleeves for a walk-down process/crib-crawl.  Conducted in-tandem with other data cleansing processes, this improves your chances for a cleaner balance sheet in the EAM/CMMS system.

Unlike those days, the internet brings ample opportunities to source additional item information once basic elements have been assigned.  If done holistically and in accordance with newly developed data standards, MRO Inventory can achieve full value.  No matter how granularly the data is defined, the key is to strike the right balance so that all stakeholders - the maintenance engineer, storeroom manager, and purchasing agent- understand that a "wood screw" is also a "carriage bolt".

1 comment for “Rethinking MRO inventory in a digital age”

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    Posted Wednesday, February 26, 2014 at 9:50:54 AM

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