Every maintenance management set up handle some amount of inventory by way of spares, supplies and tools; this is irrespective of the organisation size. For smaller teams, the inventory management could be a simple task since the quantities and variety would be less. As the size grows, so does the variety and inventory.
The OEM and AMC vendors normally give a set of inventory requirements (at times inflated) as regards maintenance effort. Many of these items go unutilised and we get into a situation where we hold a large inventory including non-moving items.
How do we optimise the inventory holding, thus reducing the overall maintenance cost?
Re-organising an existing store room or starting a new one are both time-taking and requires focused effort. Starting a new store room is comparatively simpler since we are starting from scratch and go by some inventory management logic to begin with. Revamping an existing an store room requires much more effort and thought. We will deal with an existing store house in detail in this post.
Redundant / Out of Service / Obsolete Machinery, Equipment and Systems
- Over the years of operations, some of the full equipment and machinery or full critical sub assemblies that we had ordered as hot spares might not have been used at all and may languish in the store rooms. Decide on how to dispose them off using the following options (just indicative and not necessarily exhaustive):
- Replace the old operational machinery and equipment with the new ones in store. After a short observation period, dispose the old items at the maximum possible price. Benefits – Lesser inventory level, new set of operational equipment / machinery with that much more reliability & life, scrap sales income accrued.
- Replace the existing sub-assemblies with new ones from the store. After these stabilise in operation, dispose the old ones at the maximum possible price. Benefits – Lesser inventory levels, new set of sub-assemblies in operation prolonging the equipment life, improving reliability scrap sales income accrued.
- Get the OEM to buy the items back at the best possible price. Benefits – Ideal way of waste reduction and reducing the inventory cost.
- In case it is strongly felt that we need to keep a hot spare that can reach the site in a short time, get the OEM or AMC vendor to take back and hold the full equipment or critical sub-assembly in their stock. Some hard bargaining may be essential. The population of similar equipment or critical sub-assemblies in your geographical area of operations (not necessarily with you) may clinch the issue in your favour.
- We may have replaced a few of the equipment / machinery / systems over the years with more efficient or better ones. The older full items, spare parts and special tools (if any) would still be part of the inventory. What do we do in this scenario?
- Dispose the full items at the best possible price.
- Inspect condition of spare parts and other supplied items, check for spares and supply items compatibility with other operational equipment (for example, bearings, seal units, couplings, fasteners, electrical contacts, switchgear, oils, greases etc) and dispose the unusable parts and supply items at the best possible price. Check with OEM for buy back.
- Inspect all the special tools, check for compatibility and useability on operational equipment and dispose the unusable items at the best possible price. Check with OEM for buy back.
- When equipment / machinery / systems are being replaced, negotiate a buy back of the items being replaced with all the spares and tools with the new supplier.
- With the rapid technology advancement, obsolescence has become a major problem, particularly in the electronic and microprocessor control units. We could get into an agreement with the OEMs to regularly upgrade the obsolete units with new ones with a buy back agreement of the old ones with all the spares.
After getting rid of all the useless inventory, now let us focus on optimising the useful inventory.
Optimising Current Useful Inventory
Assuming that we are using a CMMS Suite with an Inventory module, firstly there need to be a list of all assets under our maintenance. The inventory needs to be divided into three broad categories, namely:
- Spares – Made up of full equipment / sub assemblies held for “Hot swap”, and other spare parts.
- Supply items – General items of stores such as oils, greases, gases, cleaning material, standard rubber hoses, adhesives (general and specialised), sealant material etc
- Tools – This can cover general day to day use hand tools, special jigs & fixtures, equipment specific special tools such as Injector removal spanners, bearing pullers etc. Specific PPEs also could be listed under this category.
A screen shot of MPulse CMMS indicating the categories and the fields required to be filled for identifying an inventory in the “General Tab” is given below for easy understanding.
Linking of inventory items that could fall into the above mentioned three categories to each equipment would help in sharing the inventory resources over a larger number of equipment.
For example, Diesel Engines used as Generating set prime movers, emergency fire pump prime movers and air compressor prime movers may all use SAE 40 oil in them. The quantity of oil to be used in each would be specified by their respective OEM. By clubbing together all the requirements together, we can optimise the onsite stock of this oil. A screen shot of this feature in MPulse CMMs is given below:
On similar lines, the reverse process of linking each equipment asset to inventories also can be done.
As the operations get mature, the actual inventory usage need to be reviewed and the changed actual figures are to be incorporated into the CMMS data base. For example, Genset suppliers specify renewing engine oil, air filter and lub oil filters as part of 250 hrly maintenance.You may realise over a period that in your current operating environment, the 250 hrly changing of air filters is not required, but could be prolonged to 750 hrs with cleaning of filters with LP air being done every 250 hrs. This will reduce the maintenance expense and eventually, reduction in inventory.
Maintenance technicians appreciate a “Bill of material (BOM)” approach in Work orders. While scheduling planned maintenance and making work orders for break down repair work, a BOM will make it that bit easier for the technicians since they approach the work spot with all the essential spares, supplies and tools, thus reducing time wasted in going back to the stores for items frequently. Good CMMs systems will have a feature to link Scheduled Work, Work orders and Work Instructions to required inventory. A sample screen shot from MPulse for a scheduled work is given below:
A good maintenance related inventory module will reduce the time taken by assigned technicians to search for all the required material, get them together and do the job. Some systems even will allow the worker to raise a requisition for all the material they need.
Common and general hand tools or special tools could be linked to and issued to individual technicians. This will help in tracking “Who holds what, where” and sharing the available tools optimally.
An additional benefit is derived when an equipment in the facility is being removed from service. The parts associated with that equipment are quickly identified so that they can be removed from the storeroom as well.
That is all hunky dory. Why is it that many organisations operating with with good CMMS suites do not use the inventory modules fully?
- Firstly it needs initial planning to set up the inventory list with all details in an electronic format.
- Secondly this needs to be imported into the CMMS suite.
- Thirdly, the items need to be linked to individual assets (equipment , machinery, systems)
- Fourthly, the data needs to be updated whenever there is usage and replacements.
- Fifthly there needs to be a person motivated enough to understand the store philosophy, maintenance philosophy and understanding the economics of maintenance cost to drive the project.
Hope that I have been able to stir up some interest in the inventory management in some of you readers. I will cover the subject further in later posts.