MRO Inventory and Purchasing (Maintenance Strategy Series Volume 2)
Book Review: Maintenance Strategy Series Volume 2 – MRO Inventory and Purchasing
Overview
One of the humorous elements of a subject often considered dry—MRO (Maintenance, Repair, and Overhaul) inventory—appears in Figure 1-2, the maintenance perspective on MRO materials:
All I need is one part. If that part is there when I need it, I am satisfied with the stores system.
If the part I need is not there I am frustrated and I will complain.
This myopic view is contrasted immediately afterward with the stores perspective:
Can I fill the next order promptly?
What is my safety stock?
Have I reached my reorder point?
What is the economic order quantity?
Is usage changing?
Have the sensitivities to cost, time, or support changed?
With this comparison very near the beginning of the book, the author proceeds with the subject at hand. The embodiment of the subject turns out to be numerous flow charts and work processes.
And yet, that may well be the correct solution to a problem characterized by chaos, lack of information, and lack of control. Disciplined work processes and restricted access is at the heart of the proposed solutions around inventory management. For a detailed reason why, I can do no better than this all-too-familiar story: A Day in the Life of Jim [PDF].
As with the first book in the series, Preventive Maintenance, the book introduces the “big picture” of maintenance strategy, and the current subject’s place in the hierarchy. Once a preventive maintenance program exists and is effective—with 80% of all maintenance work done on a planned basis—Wireman proposes that the next problem to tackle is that of chaotic spare parts inventory… and there is plenty to tackle.
Key Points
- Inventory management begins with a good location, clean bill of materials, and good parts identification. Once the organization—human and geographic—is in place, then a tracking system is needed.
- Next, transactions need to be formalized and documented. This is the heart of the inventory management system. If you don’t know where you are, then you can’t map a path to where you want to be. Also, formalized transactions will enable the metrics needed to measure success.
- Stores needs to be treated as a business. The myopic interpretation of this truism is that stores is a cost center and needs to be minimized. The perspective this book takes is that all costs need to be counted—not just holding and ordering costs, but stock-outs, idle maintenance employees, machine downtime, and other forms of waste.
Useful Features
- General guidance on storeroom conditions is given in Chapter 1, however the subject is only touched upon. Ineffective practices such as outdoor equipment storage and hung belts are pointed out, but then the subject is dropped in favor of work processes and flow charts. Shaft rotation, machined surface care, lubrication, tagging practices, and shelving could all be addressed. More detail on storage conditions would be a welcome addition to a second edition.
- There is a flowchart for almost everything. However, some of these flowcharts will only be starting points. Some of the blocks are rather vague. For example, the most relevant decision block in Figure 7-1—Adding Parts to Stock Process—simply says, “Obtain approval to stock from authorized managers.” Besides encouraging a defined administrative process, there is little guidance in the chapter on deciding when a part should be stocked. An example of a more effective flowchart is Figure 6-1—Returning Parts to Stock/Storeroom Process. Overall, the flow charts are good, leaving room for definition in places that make them flexible enough to serve as starting points for most companies.
- Optimizing inventory costs is not as simple as minimizing inventory, as demonstrated in Appendix A. Total cost of inventory is presented as a combination of holding costs and ordering costs. Given the hard push on reducing inventory at most companies I have experience with, this is a welcome business perspective that rounds out the typical CFO-centric viewpoint.
Table of Contents
Introduction
Overview: The Maintenance Strategy Series Process Flow
Chapter 1: Organizing MRO Inventory and Purchasing
Chapter 2: MRO Definitions and Transactions
Chapter 3: Tool Management
Chapter 4: The Reordering Process
Chapter 5: Rebuildable Spares
Chapter 6: Returning Items to Stock
Chapter 7: Adding and Deleting MRO Parts
Chapter 8: Making Financial Investment in MRO Spares
Chapter 9: Maximizing Investments in MRO Spares
Chapter 10: MRO Inventory and Purchasing Performance Indicators
Glossary
Appendix: Economic Order Quantity, Reorder Points, and Safety Stock for MRO Inventory
Index
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