MRO Inventory Optimization and Best Practices
Effective management of maintenance, repair, and operations (MRO) inventory is critical for an organization’s smooth operation. By doing so, organizations can guarantee that they have sufficient inventory readily available to prevent unscheduled downtime and avoid holding excessive inventory levels.
Today we will discuss various MRO inventory optimization strategies such as Just-in-Time (JIT) and Vendor Managed Inventory (VMI) and when each approach is appropriate. Finally, we will examine how a robust computerized maintenance management system (CMMS) can effectively implement either strategy and the numerous advantages offered by a top-notch platform like LLumin’s CMMS+.
What is MRO Inventory Optimization?
MRO inventory management is a process that enables organizations to guarantee that their maintenance teams have the essential parts and materials needed to carry out repairs and maintenance activities while reducing the costs associated with carrying excess inventory.
When executed properly, MRO inventory management can provide an organization with a high-level overview of its inventory levels, enabling them to minimize unscheduled downtime, lower costs, and boost efficiency.
MRO inventory optimization is an ongoing process that involves using various strategies to help reduce costs and reduce MRO inventory surplus.
Strategies for MRO Inventory Management
Several MRO inventory management strategies can help an organization optimize MRO inventory levels.
In this article, the MRO strategies we present are:
- Just-in-Time (JIT) ordering: This involves ordering parts only as needed and reducing on-hand inventory.
- Vendor-managed inventory (VMI): This strategy involves outsourcing MRO inventory management to a vendor responsible for maintaining specific inventory levels.
We will discuss these strategies in more detail below.
Just-in-Time (JIT) Inventory Management
A JIT inventory management strategy is an MRO optimization strategy that requires close collaboration with suppliers to ensure timely delivery of parts and materials and real-time updates on demand and inventory levels. This strategy works best with a proactive maintenance strategy because maintenance activities are scheduled, and demand is easier to forecast.
The JIT strategy relies on good supplier relationships and trust, as well as careful planning and coordination, to be successful. It is also ideal if an organization and its suppliers have access to a CMMS, such as a cloud-based CMMS+ solution, that can provide up-to-date information on demand, inventory, and supplier lead times.
If a company lacks the solid working relationships and tools required to implement JIT inventory management, another strategy, such as vendor-managed inventory (VMI), may be more appropriate.
Vendor Managed Inventory (VMI) Management
A VMI strategy allows a supplier to continually monitor and manage an organization’s inventory. Rather than the organization, the supplier monitors inventory levels and determines when stock needs to be replenished.
Like the previously discussed JIT strategy, the VMI strategy requires a high level of trust in a supplier, as the outside supplier is given access to an organization’s internal information, such as inventory levels and demand patterns. A company can implement a CMMS+ solution to improve collaboration and enable a supplier to see an organization’s real-time inventory levels while making necessary adjustments.
This approach to MRO inventory optimization can help a company with limited resources refocus its attention back onto core activities while outsourcing inventory management to an outside supplier, resulting in improved inventory accuracy and a dramatic reduction in stock-outs.
How LLumin’s CMMS+ Supports MRO Inventory Optimization
CMMS software is well-known for improving inventory management and streamlining the entire replenishment process, ensuring that the correct levels and types of inventory are available while avoiding the overstock of unnecessary and potentially costly parts and materials.
A CMMS solution can be highly beneficial in supporting an organization’s MRO optimization strategies, and you can accurately and effectively manage MRO inventory levels with LLumin’s CMMS+.
The cloud-based platform can function as a unified inventory database, providing teams and suppliers with real-time access to inventory levels, demand patterns, and supplier lead times, reducing inventory overhead and costs.
Inventory Optimization With LLumin’s CMMS+
LLumin’s CMMS+ advanced inventory management features can help users accurately forecast their MRO inventory needs, reducing waste and expense, tracking required parts and avoiding the disorganization and mismanagement associated with less effective processes.
The CMMS+ is a complete solution for condition-based monitoring that enables organizations to control inventory based on actual need and set automated replacement ordering triggers, helping users to control the carrying costs of storing inventory and avoid the common problems associated with being over or under-stocked.
When you choose to work with LLumin, you will have access to excellent customer service throughout the entire implementation process, and your project will be tailored to your company’s specific goals and requirements. We will provide you with a complete implementation plan, support team, and ongoing assistance throughout your digital transformation and beyond.
So if you are looking for a cutting-edge CMMS+ accompanied by a seamless implementation process and an expert customer support staff, then LLumin is a perfect fit.
Getting Started With LLumin
LLumin develops advanced CMMS software to support preventive maintenance programs for industrial plants, municipalities, utilities, fleets, and facilities. If you want to learn more about how CMMS software can help improve your MRO optimization strategy, we encourage you to schedule a free demo or contact the experts at LLumin to see how our CMMS+ software can help you reach your performance goals.