CMMS and Inventory Management – To be integral or separate?

Hi,

I am writing this out of the personal experience in the Facilities Management field and from having used a few types of CMMS packages, deployed by large organisations.

In India, many of the medium-sized industries are yet to get into the CMMS bandwagon. Some sectors such as the hospitality industry, hospitals, IT / ITES buildings, pharma / chemical industries, irrespective of their size, still use spreadsheets to monitor their maintenance effort. Some of the larger industries do use the maintenance module of a custom-built ERP or SAP. This is only a macro level information.

The maintenance effort mainly revolves around the planned / scheduled jobs, reactive jobs related to breakdown of equipment and systems, condition based predictive maintenance if practiced, assigning personnel (own staff or third-party vendors) for the work and assigning inventory required for the jobs and monitoring overall costs.

The inventory related to maintenance would be a minuscule, as regards quantities and cost, related to the overall procurement done by any organisation. In case of manufacturing units the value and volume of maintenance related inventory would be the lowest.

In the scenario mentioned above would the Facility Manager be overtly interested in accounting the maintenance related inventory and involving himself  in the inventory procurement, receiving, invoice handling etc? I doubt, unless he is pushed to do it. Accounting for the spares and supply items usage for each job and calculating the cost apportioned to this may still be considered worthwhile. Probably that is the reason why most of the CMMS suites restrict their inventory module to the end point of raising a purchase requisition.

Now let me state two case studies:

  • A large automobile manufacturing unit is using a “Maximo” based custom-built global CMMS programme. This has a fully functional Work / Job scheduling / monitoring module and a very detailed inventory management module. The inventory module is not used at all since it got stuck at the data entry point, on a question; who is responsible for the inventory data entry and maintenance of the inventory data base? The maintenance department or the stores people?
  • A global banking giant has a custom-built CMMS package with great features as regards maintenance management, but a very rudimentary inventory module. Purchase and procurement are done through a different application. These two are not linked.

What prompted me to write this Blog is an article that I read in the Plant Services web site. The link is given below. Please do read the article.

http://www.plantservices.com/articles/2012/09-Asset-Manager-CMMS-ERP.html?page=full.

I have been a Facilities manager in large organisations and found it more convenient to let the purchase department do the procurement action. Firstly, they are eminently more qualified for that function. Secondly, if I were to take up that function I would have had to add specialists from that field in my team. This would mean,  duplication of effort. Thirdly, the team will have a disgruntled element, removed from his/her core group and having doubts about his career progress in the maintenance organisation.

For optimising the maintenance expenses, there is a need to account the inventory usage. This needs to be an integral part of any CMMS.

For timely availability of spares, supplies and tools, we need to monitor the on site availability too. This feature is also essential in a CMMS.

Inventory carrying cost needs to be minimised to improve the bottom line of any business. Hence, the CMMS should be able to report the stored inventory cost with segregation of high value and low value items / store house wise / Cost Centrewise / Location wise etc.

In my opinion, Purchase should remain a central function of any organisation and maintenance should utilise this department to do their procurement. If the CMMS package allows integration with the main purchase application (be it an ERP or SAP or anything else), by all means go for it. One word of caution: CMMS package may be able to update the inventory received and current stock levels from ERP or SAP, but may not be able to update on inventory usage to the ERP / SAP.

Comments on this Blog are welcome.

Kaycee

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2 thoughts on “CMMS and Inventory Management – To be integral or separate?

  1. Our company provides an integrated CMMS solution (both cloud-based on local). We have an office in India and are actively looking to sell to the Indian market. Since a cloud-based solution requires less infrastructure and risk (in terms of cost) we thought that would be the ideal mode of operation for Indian companies. Any thoughts on how to crack the Indian market, which segment would be best to target?

  2. Welcome to this Blog! Thanks for taking some time to write the comment. I have sent a mail to you separately indicating that I am marketing a CMMS myself.

    Thanks again for the interest. Please feel free to visit and browse the contents.

    Ajith

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