Introducing “lean” principles to the production environment is one of the most effective ways for manufacturers to improve maintenance effectiveness and reduce inventory carrying costs. Going lean with your maintenance, repair, and operating supply (MRO) storeroom inventory can be a difficult challenge for medical device manufacturers. However, the time spent creating and implementing a lean storeroom strategy will be well spent.
 
The steps your company takes to get there will determine how efficient your entire MRO supply chain becomes.
 
In a typical MRO storeroom, roughly 90 percent of all parts account for about 6 percent of inventory value. All other parts and components in your storeroom may be obsolete or duplicates kept for “just-in-case” scenarios that may never occur.
 
The bottom-line is that keeping those parts in your storeroom is inefficient and the management of those unused parts is costing you time and money. It explains why an inventory management strategy is so important.

The True Costs of Excess or Outdated MRO Inventory

The ability to eliminate excess spare parts inventory moves your organization closer to becoming a truly lean operation, even in today’s world of significant supply chain challenges. It is a strategic benefit, creating storeroom space that improves traffic flow and promotes safety.
 
Excess inventory disrupts operations by adding search time for maintenance technicians, reducing their effectiveness. This wasted time can equate to tens of thousands of dollars a year in lost maintenance “wrench time.” If technicians and storeroom personnel are wasting time searching for parts, equipment is not being maintained.
 
Besides, your storeroom management professionals have other responsibilities, so anything that enables the storeroom to run more efficiently benefits the organization elsewhere.
 
Finally, having more MRO inventory means more cash is tied up in the storeroom – carrying costs. These fixed costs might never be recovered, especially if unused parts become obsolete. Evolving your organization’s equipment and processes requires the need for new parts. Not knowing which parts to discard when adding new equipment, contributes to the excess inventory dilemma.
 
Once free of unnecessary spare parts and your storeroom is streamlined, your organization should develop a strategy to KEEP that storeroom lean so your costs and time can be more effectively managed. Four of the most effective ways to stay lean include:

1. Identifying Critical Spares

Keep your storeroom lean by identifying your “critical spares,” or the parts that are absolutely crucial to avoiding production or plant downtime. If you prioritize these available parts, you can ensure you become “lean” without sacrificing efficiency. This doesn’t mean you can or should label all spares as critical. On the contrary it, that approach actually leads to more inventory problems.

2. Predictive Inventory Management

Next, examine historical ordering and maintenance data to identify trends and insights that help predict MRO demand. Determine the optimal number of each type of part to stock. Establishing minimum and maximum numbers ensures you always have what you need, without the costliness of storing what you don’t.

3. Condition Monitoring

The next-wave method of predictive inventory management comes from gleaning predictions from a variety of sources. These predictions should not be predicated just on historical data, but real-time condition monitoring of equipment. Monitoring likely raises an alert when maintenance or a spare part need is imminent, and automatically triggers an order so that maintenance becomes proactive instead of reactive, eliminating downtime altogether.

4. Considering Partnering with an MRO Expert

Managing a storeroom is no small task. Since your operation has many needs, those managing your storeroom likely have other responsibilities they are required to handle. It can be a challenge finding time and resources to identify process improvements.  An MRO supply chain service provider utilizes its buying leverage to save on material costs, while applying a high level of expertise to storeroom operations and processes, leading to greater savings and organizational efficiencies across the board.
 
Implementing these steps increases the likelihood that your MRO storeroom will be lean, supporting an efficient production environment in the medical device sector. The end result should make management and storeroom personnel equally happy with lower costs and an efficient and safe operational process.
 

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As senior director of Project Management and Business Intelligence for Synovos, Diane Caldwell has extensive MRO experience working with customer data and managing projects to identify inefficiencies and opportunities for supply chain improvement. One recently completed project involved a comprehensive $50-million inventory analysis for a client across their North American locations that identified areas for inventory reduction as well as opportunities for shared inventory of critical spares across their enterprise. She can be reached at dcaldwell@synovos.com.