Cutting the downtime associated with maintenance, repair, and operations (MRO), reducing the working capital, and enhancing the service levels are proven ways to improve your profits and address the challenges of the supply chain and warehouse management. Some of the familiar challenges of inventory optimization include segmentation, management of extensive and fragmented vendors, management of obsolete inventory, and excessive inventory item levels. On average, US companies spend more than 6 million annually on maintenance, repair, and operational expenses. This cost can be curtailed by improving the warehouse and inventory upkeep and maintenance efforts.
Business Tips To Optimize Your Warehouse MRO
Below are the essential tips and measures for the management of warehouse MRO, and its optimization. These tips can be fruitful for all kinds of businesses, including service and retail business organizations.
The best inventory management plans and systems will strive to have only enough inventory at hand for the management of regular and everyday operations. The orders should be scheduled periodically for replenishment, for a reliable inventory flow. However, timely and accurate demand for forecasting and predictions are required. Nowadays the best business organizations use automated systems for notifications and alerts, and for ensuring that stockouts do not occur. The ABC classification system can be utilized for prioritizing inventory and reducing losses and wastage.
Using Multiple Approaches
MRO inventory can be defined through multiple approaches, including the leveraged and the managed approach. The “leveraged” inventory approach and MRO optimizations define the team and individual accountability for timely improvements and are strategic approaches. The “managed” MRO optimization approach uses data for understanding the inventory flow processes and for controlling and optimizing them.
Using the Latest Inventory Management Systems and Software
The new inventory management systems are a must for organizations to remain effective and lead the competition in the present era. These systems may include the CMMS (Computerized Maintenance Management System), EAM (Enterprise Asset Management) system, and FM (Facility Management) system. A centralized management software system and platform will consolidate all the systems and present them on a single dashboard. Furthermore, the new software systems provide for the integration of third-party software and apps through the API (Application Programming Interface) to improve effectiveness manifold. The leading and expert warehouse logistics consultants can help you choose the right inventory management system for your needs.
The Key Performance Indicators (KPIs) can bring more visibility and help in the analysis of important metrics. For instance, you can use the below-given KPIs for better inventory MRO management.
- Backorders: supplier back orders are important performance metrics. The amount of the back orders should not be more than 5% of the total inventory being tracked.
- Inventory Turnover: the inventory turnover rate signifies the total number of inventory items that have been used within a given period. The metric should be analyzed every month.
- Stock-outs: stock out situations occur when the item shows to be available on the system but is not located in reality. Continuous improvement programs can address this grave issue.
It is important to use the asset labels (or the inventory tags), and an elaborate tagging and labeling procedure for the critical inventory items. The important inventory can also be labeled based on demand or variability. It can ensure that the important and high-demand inventory items can be assessed easily at any point in time.
Warehouse MRO management and inventory optimization can ensure better profits and make the services even more satisfactory for the end customers and stakeholders. You must use the latest technology and resources to ensure speedy and accurate processes and reduction in wastage.