Do you Understand your MRO Inventory and Maintenance Cost?

Do you Understand your MRO Inventory and Maintenance Cost?

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You do not work in the maintenance department or in purchasing. Why would you care about MRO inventory and maintenance costs? If you lead a manufacturing automation project implementation, you should care. The impact of a well-developed automation project on maintenance costs is often overlooked. Yet, it is a compelling cost reduction opportunity.

How does a company feel MRO and maintenance cost pain?

· Inventory shortages occur due to usage that exceeds predicted consumption

· Stock-outs happen because the wrong replacement part number is on the equipment BOM

· A replacement part is defective because it was never sent out for repair

These examples increase cost for an organization. The extra downtime until repair and expedited part shipping is costly. Adding to the pain are overtime labor costs for maintenance emergency repair support.

How does a well-developed automation project affect MRO Inventory and Maintenance Cost?

1. Use standardized components and communicate requirements to the integration team

Reducing the number of MRO items held in inventory benefits the organization because:

  • Purchasing can leverage volume buy pricing with the supplier of the standard component.
  • Inventory min/max or automatic reorder quantities are stable in a standardized environment.
  • Standardization reduces equipment BOM complexity and the likelihood of error.

2. Include a diagnostic strategy that decreases troubleshooting time and establishes preventative maintenance intervals

Project diagnostic strategies result in an average reduction of 35% in operational downtime. Effective diagnostics allows an operator to make an operational change based on feedback. In some instances, maintenance isn’t even called to the line. Diagnostics with built-in repair procedures make the maintenance repair quick. It releases the equipment back to production in an expedited fashion. A preventative maintenance alert programmed in your automation will notify support teams. They will address important maintenance items before failure. This reduces downtime. Also, the PM alert provides data to predict PM supply usage. This allows for “real-time” supply availability and reduced inventory carrying cost.

We listed two examples of the impact of a project on MRO inventory and maintenance costs. There are many more. These cost reduction opportunities warrant consideration. Your company benefits from your forward-thinking cost reduction initiatives.

Do you need a partner to help you manage your manufacturing automation project? Get help in avoiding costly mistakes with MRO inventory and maintenance costs. Contact KM Shinn Consulting to assist you with your critical automation projects. We want to help.

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