MRO spare parts
Whenever it comes to holdings management, numerous leaders in asset-intensive sector like electrical power, amenities, or chemical manufacturing walk a tightrope. The effectiveness of upkeep, repair, and operation (MRO) initiatives more especially, the replacement parts that support them depends on striking the correct balance.
What is in jeopardy?
The desired outcomes of MRO Spare Parts operations are the same whether they deal with preventative maintenance, service breakdowns, or
Shutdown overhauls: They should raise service levels, work safely and sustainably, run smoothly, and cut down on unscheduled and expensive downtime.
According to a recent estimate, The cost of production downtime increased significantly between 2021 and 2022, costing Fortune Global 500 businesses 11% of their annual turnover, or around USD 1.5 trillion, as opposed to USD 864 billion in 2019 and 2020.
The pendulum that swings
The MRO spare parts inventory ranges from specialized goods to more basic supplies, depending on the industry and equipment. From massive infrastructure components like turbines, generators, transformers, and HVAC (heating, ventilation, and air conditioning) systems to tiny components like gears, grease, and mops, these suppliers have it all. Inventory optimization is becoming a top priority for many asset-intensive firms as a result of expanding industry 4.0 rules, digital transformation, and cost-cutting demands.
Inventory managers have experimented with many strategies throughout time to see which works best for their companies.
Businesses have long supported just-in-time operations as the most sensible strategy for controlling inventories and reducing holding expenses. But many have been caught off guard by the recent interruptions in the global supply chain brought on by the epidemic and regional problems.
When operations required a spare item that wasn’t easily accessible, it often led to expensive stockouts or equipment downtime. Even in the past, using this strategy often resulted in higher shipping or expediting costs and raised questions about the products’ quality.
It is clear that this strategy involves more danger than it would appear when you consider that 37% of organizations questioned by IDC handle MRO Spare Parts inventory by utilizing spreadsheets, email, shared folders, or an unclear approach. Using a reactive strategy might be less effective if your demand forecasting is off.
Now think about the just-in-case strategy. Because they have experienced delays and other unfavorable outcomes in the past, some management decide to keep an excess of replacement components on hand. While keeping a safety stock is a good idea, having too much inventory may be expensive and time-consuming to handle. Assets that are not assigned criticality or priority run the danger of collecting superfluous components that might end up on the shelf. This in turn starts an ongoing cycle of investing in attempts to reduce inventories.
The advantages of striking the ideal equilibrium
The objective thus becomes striking the proper balance to assist guarantee you have the required materials to continue company operations while giving your teams what they need at the right moment, taking into account the disadvantages of both just-in-time and just-in-case methods.
It’s not just theory either. Maintaining a balance between the dynamics of MRO Spare Parts and material demand has measurable advantages. Many firms lack the internal resources or expertise to carry out these essential processes,
But those that can report:
- 50% decrease in unscheduled part-related downtime.
- 40% decrease in the price of items.
- A reduction in maintenance costs of 35%.
- 25% rise in the quality of service.
How to strike the ideal balance
To get instant value throughout your operations, gather, evaluate, and act upon data in real-time. Is it simpler to say than to do? That may be the case if you just use condition monitoring, physical asset counts, or spreadsheets.
Think about these inquiries:
- Do you have a platform that integrates optimization algorithms, prescriptive analytics, and statistical analyses?
- Is it possible to use important characteristics such as cost, criticality, utilization, real lead times, and more to segregate data from all of your systems, including customer relationship management, enterprise asset management, enterprise resource planning (ERP), and sensor technology?
- Are you recognizing SAP’s shortcomings for asset-intensive sectors and failing to take advantage of the vital analytics and reporting features that you need if you depend on transactional ERP systems?
Are you able to look over the old data modules?
- Do you carry out baseline assessments to determine the worth of your inventory using factors like average price, inherited products, and other factors?
- Is it possible for you to do what-if analyses to see your possibilities?
- Do you have specially designed algorithms to enhance the forecasting of variable and intermittent demand?
- Is it possible to monitor progress by organizational areas and data types and use work queues to prioritize and arrange tasks?
Even while many inventory managers already include artificial intelligence (AI) into their strategies, it’s still important to stay up to date with the most recent developments in the field.
Generative AI has the capacity to provide significant assistance in important data domains:
- Use expert data purification to identify outliers and minimize duplications.
- Enriching master data to improve material properties and classification.
- Gain mastery of data quality to enhance automated data validation, prioritization, and scoring.
By giving you a precise and comprehensive view of performance, IBM MRO Inventory Optimization may assist you in optimizing your MRO inventory. With the help of a variety of cutting-edge algorithms and analytics, the adaptable, scalable solution is a fully managed cloud inventory platform made to gather, store, and analyze enormous volumes of MRO Spare Parts inventory stock data in order to optimize MRO Spare Parts stocks in an intelligent manner.
IBM’s supply chain consulting services may also improve supply chain management by assisting customers in creating end-to-end supply chains that are flexible, robust, and long-lasting.