What Impacts MRO Inventory | eMaint

What Factors Impact MRO Inventory?

Businesses spend roughly $110 billion on maintenance, repair, and operating (MRO) materials per year, according to a study conducted by Grainger. Of that $110 billion, approximately $12 billion are for parts that go unused. Additionally, Grainger notes that over 50% of U.S. businesses are not efficiently managing their MRO inventory. Read on to learn how to be a part of the 50% of businesses who efficiently take control of their MRO Inventory.

What is MRO Inventory?

Maintenance, repair, and operations (MRO) inventory include the supplies used to maintain facilities, plants, manufacturing lines, etc.

The three components of high inventory costs are the physical parts on the shelf (inventory costs), the time and energy put into the MRO environment (process costs), and parts purchasing. To break it down further, we outlined some common drivers of cost increases within each category, and how a Computerized Maintenance Management System can help spark improvements and cost savings.

The Causes of Ballooning MRO Inventory Costs

Excess Inventory 
Without tracking parts usage, it is difficult to know how much inventory is being used in a given time period, and companies often end up purchasing in excess.

Buying Around Inventory
When an organization does not know what they have in stock or cannot find parts when they are needed, money might be wasted buying around inventory, especially in emergency situations.

Special Projects 
A purchase is made for a sizable equipment or parts list for a particular project. When the project is completed, those parts get placed back into inventory, and are not used again. This inventory just sits on the shelf without any real return.

Hidden Costs of Maintenance Processes

Item search time 
If an organization does not have optimal control over inventory within a CMMS or spreadsheets, trying to find particular parts can be a very time consuming process.

Downtime cost per hour

In a recent webinar survey conducted by eMaint, 60% of organizations said they do not track or measure the cost of downtime. For organizations looking to improve inventory management, process costs or purchasing spend, it is important to understand the metrics that drive daily activities.

Sourcing time 
Sourcing time includes how long a technician, mechanic or employee spends trying to find vendors and suppliers for new parts and other items. Without a catalog or a database to store contact information, including associated products and costs associated, this can be a lengthy and expensive process.

Purchasing Cost Considerations

Just In Case Buying 
This method relies on purchasing with a “gut fee