Verusen shares the merits of optimizing MRO inventory for a more profitable operation
While many businesses are aware of the need for inventory optimization, the need for MRO optimization is less well-known. MRO stands for Maintenance, Repair, and Operations.
This form of inventory is not usually in your company’s main line of business, but it can be an integral part of whether your employees can succeed in their jobs. Entire companies can depend on the accuracy of their MRO data. Carelessness when putting these systems into operation will lead to higher costs.
Verusen, an industry expert, explores how this type of optimization can help your business grow more lean and agile while responding to today’s challenges.
Maintenance, Repair, and Operations
All companies need a plan for these three areas of business. From large manufacturers who need to work on their machinery to small retailers who need cleaning and sanitary supplies for their stores, all businesses could benefit from optimization in this area.
The most important aspect of optimization is a clear and coherent data system. All inventory, parts, and supplies need to be tracked in a workable system.
Similar to inventory optimization, optimizing MRO requires keeping just enough supplies on hand to meet demand while not tying up money in excess inventory. These systems need to be able to adapt to changing business conditions.
For example, if your company is changing over to a new type of machinery, the MRO items that will need to be stocked are not the same as they have always been. Companies will need to find ways to keep the necessary items in stock when they are required.
Special Challenges for MRO Management
While data-driven programs are highly useful for inventory optimization, many companies sabotage themselves by neglecting to put maintenance, repair, and operations items in the system. The problem of siloed data carries over from inventory optimization, as different departments in the company may be using proprietary software to keep track of their items and expenses.
A centralized data system is a must for these companies. This can help to keep track of items that are needed frequently, items that are especially expensive, or items that are not used very often but are absolutely critical to the company’s operation. Parts also need to be tracked to determine when and if they may become obsolete. This is especially true when working in manufacturing and transportation.
Consequences of Neglecting MRO
The consequences of operating without a proper MRO inventory approach include incurring abnormally high costs for carrying items. When products are allowed to become obsolete, this represents a major loss for the company. Overall costs for out-of-stock parts are higher. This may require extra labor or storage costs.
If the MRO inventory plan is not solid, the company could lose credibility with its customers. Costs may become prohibitive to doing business, and the company may lose customers entirely.
Keeping a centralized data system for MRO equipment is absolutely necessary. Departmental data systems should be discouraged, and employees should be properly trained before any use of the database. Verusen offers an AI solution for inventory and MRO management, and this system takes the guesswork out of setting the proper stock of saleable and maintenance items.
An effective MRO management system is based on strategy. This enables the company to balance the cost of parts, storage capabilities, and lead times for purchasing and manufacturing parts.
A proper MRO management system can change constantly, driven by the changing complexity of the products, shifts in geography, fleet trends, alterations in consumer demand, and updates in technology.
This system will be able to help you balance your investment in maintenance-related inventory. This will help you avoid running up unnecessary costs in the supply chain and will also enhance your company’s productivity.
A centralized MRO optimization system will also prevent needless duplication of effort. For example, a company with many manufacturing locations discovered that it was spending huge amounts of money on disposable gloves, coming from multiple suppliers. When this expense was centralized, the company was able to rein in their costs and create a more workable situation.
An AI system is set up to help you determine what your needs will be in the future, based on data-driven forecasting. When the AI system models demand and supply, it can handle the challenges posed by intermittent demand. This system will save your company money while making your employees’ jobs easier. This could also save your company from costly turnover if managing the MRO system is too much to handle.
Optimizing MRO Inventories
MRO optimization is an often-overlooked area where costs can be brought under control. Companies like Verusen are able to provide AI management of these systems, helping to keep costs in check while making operations more successful.