Need for MRO Inventory Optimization

November 2, 2020 Tags: Data Standardization, Inventory Optimization, MRO inventory, MRO supply chain efficiency, spares forecasting

Renewable Natural Gas | mro inventory optimization

MRO Inventory Optimization is not complicated but is a discipline that requires attention. There are many reasons why inventory optimization is critical in today’s ever challenging economic climate.

Before we get into explain the simplicity and need for MRO inventory optimization, it is worth mentioning how MRO is impacted in 2020.

It has a total reliance on ‘DATA’. With the unavailability of a physically connected team, the only constant reliable connection between the – production, maintenance, procurement, sourcing, inventory and warehouse folks is ‘reliable data’.

Gaining visibility that a lot of work can be done off-site which directly reduces the travel time.
Reduced travel gives the executives a chance to rethink MRO strategies and prepare for any uncertainties that might come.
Reduces anxiety if the suppliers can adhere to committed delivery of spares and asset within the timeline, and costs.

With increased demand for organizations to have a clear MRO strategy, inventory optimization is now playing a lead role which is directly impacting significant costs of overall operations across supply chain, labor, procurement, sourcing, warehouse, logistics, etc.

The major concerns of the organizations for touching the MRO inventory is that they know that it exists across systems, but there are duplicates. The Maintenance teams spend about 20 to 30% of their time searching for a part, with even more delayed time with obsolete parts and not being prepared with the alternated.

Frankly the ‘DATA IS DIRTY’, and below are the difficulties one faces including:

No clue where to begin
Who will be impacted
Utilized internal resources carrying out their regular tasks who cannot work on MRO data
Unavailability of necessary tools
No leadership direction to own this
Cost factor where if it will cost is millions of dollars, it is not budgeted
having no idea of ROI time lines

And many more…

In lieu of all these difficulties, we simply will put it on the back burner, and get the job done slowly which would take another 2 to 3 years.

The absolutely ‘NO’, companies who we work with have had one, or several of these thoughts before approaching us. Therefore, firstly we need to remove the prejudices associated with MRO Data:

Low costs:It does not cos millions of dollars, it will range from about US$5,000 to maybe US$40,000 to US$70,000, and can increase based on volume, and scope. However, the cost range is right here from small to large companies across industries.
Low time lines: It can be done in anywhere between 2 to 8 months, irrelevant of the volumes at hand.
ROI: The ROI is fairly immediate (3 to 9 months), even if your embarking on a 3-year supply chain efficiency program, and MRO is a part of it.

MRO Inventory Optimization does require specific – tools, domain experts, and experience in analyzing the insights and making actionable recommendation. Enventure, takes it to the next level of even supporting some of the implementations via a network of trusted partners. The client ownership is minimal, and usage of tools are simple yet configurable. Periodic walk through of insights – weekly, monthly & quarterly; recommendations, progress, feedback is extremely proactive, and to the point with quick results.

In the next blog, I will share some details of some of the techniques of inventory optimization and the results thereby.