Achieving Successful Spare Parts Inventory Management

The importance of automation in enterprises across industries is noticeable. However, there’s still a pushback against automation despite the benefits it can provide. This is true at all stages of the supply chain, including facility equipment maintenance and inventory management, which is a necessary component of many organizations. For maintenance, repair, and operations (MRO), storage, all tracking and parts ordering must be accurate. 

Spare parts inventory management is a giant element in preventing unnecessary downtime that could impact your organization’s workflow. With the advantage of maintenance inventory management software that’s customized to your organization, the process becomes a whole lot easier. 

Read on to learn more about the challenges of handling maintenance inventory and how you can implement spare part management in your organization.

What is maintenance inventory management?

Maintenance inventory management is the practice of overseeing the inventory of spare parts in a company or facility. When done successfully, proper organization can avoid inaccurate records and prevent any disruption or delays in operations or production. It also ensures the efficient use of available space and budget planning.  On top of tracking and ordering, inventory management can be enhanced using metrics like mean time to failure (MTTF) to predict when a consumable supply will fail or need to be replaced. 

Maintenance facilities use spare parts inventory management to paint a picture of what they have on hand and what they don’t. When replacement parts run out of stock, being able to complete a work order ahead of an equipment failure can save days or weeks of downtime that would occur while waiting for them to be delivered.

Effective quick fixes and quality control are the hallmarks of maintenance management. Many managers have turned to software and automation to help manage inventory more efficiently, as traditional methods fall short in meeting today’s demands. 

The challenges of traditional MRO inventory management

Traditional MRO management methods do pose some challenges. Relying on Excel, paper records and even the wrong software can lead to human error and consequent inefficiencies. Anyone in maintenance will agree that it can be difficult to forecast the demand for spare parts across the entire organization.  When we order the parts we need after a breakdown has occurred, we could be left extending the equipment’s downtime while we wait for the fulfillment of the part order. 

Analytics is one great way to overcome this obstacle in a way that traditional parts inventory management can’t. You may be tempted to over-order parts and increase stock level to limit the risk of not having the right part, at the right time, in the right place, but this decision-making may be costing your facility instead of benefitting it. 

Here are some of the difficulties that come with traditional MRO inventory management: 

Finding the inventory level “sweet spot”

Too much stock on hand means needing to expand storage and using more capital that could be spent elsewhere. This includes the parts your team may order “just in case” but will rarely require. It can be difficult to know exactly how much of one MRO part must be stored to meet your facility’s demands. You need to find that perfect “sweet spot” that doesn’t use up excessive funds while also reducing the risk of a stock out. 

Overstocking of obsolete parts

Some managers will hold onto obsolete items to prevent them from affecting the financial statements when the parts are written off. In reality, the unnecessary parts take up storage space that could be better optimized for the stock you do need. 

Lack of centralization

Improperly captured and reported data can be prone to errors, especially when there isn’t a strong plan in place to track parts as they move through a facility. For example, your records may say that you’re out of an item because it’s been taken off the storage shelf. In reality, it might be sitting forgotten in a worker’s drawer somewhere. Different staff members may prioritize different needs. If the task of work order management is put in the hands of too many people, priorities may get lost or duplicate items may be requested due to a lack of centralization. 

Without a complete, updated, and accurate list of inventory by location, it may be difficult and time-consuming to figure out the exact location of a part. Until you can track down the item, you won’t know how many you actually have in stock, or you may be misled into thinking the stock is depleted when, in reality, there are many collecting dust in another storage closet.

The challenges of MRO inventory management are varied. You may have to deal with inaccurate records and outdated information, uncoordinated efforts to maintain and manage MRO inventory, or an inability to respond to demands for a particular item quickly. It can be beneficial to create a plan for managing MRO inventory to help you minimize these problems. 

Spare parts inventory management best practices

An organization may overlook the importance of managing inventory and the risks that come with it. The following are some of the hazards associated with disregarding spare parts inventory management:

• Inability to maintain production: If a commercial facility doesn’t have enough spare parts on hand, they may not be able to keep up with demand. This could result in lost revenue and unhappy guests or customers.
• Project delays: If your team can’t find the right part for their machinery, they’ll need to delay their work until they can locate it. This might mean that they miss out on a new opportunity or lose business to competitors. 
• Safety issues: When less suitable equipment is forced to pick up the slack after a breakdown, it can cause safety problems. 
• Decreased efficiency: Your employees will be less productive than usual if they’re unable to get the job done because of a lack of parts. This can lead to wasted time and money.
• Reduced competitiveness: Without a fully-functional workforce, your team loses out on valuable work when they can’t use their time properly.
• Working reactively: When you react to failure as it happens and don’t focus on planned maintenance, your equipment risks not being up to date. This will also affect productivity. 

There are some best practices your maintenance team can follow to ensure you don’t sacrifice your equipment’s efficiency and safety due to low stock or an error in inventory management. These include: 

Setting up a centralized inventory management system

Have a system in place to maintain an accurate and up-to-date stock of all items. This includes storing items in a way that makes them easy to find. One reliable method is to keep an automated spreadsheet or, better yet, use software that tracks the use of spare parts and the updated inventory level. You should also confirm that there are clear procedures in place for supply replacements and repairs. Your team should be aware of how to fill out a purchase order or notify the right staff member assigned to it.  

Centralize your inventory management system so that anyone accessing the information or keeping records can see what actions other team members have taken. This will prevent duplicate orders and help to keep everything more cohesive. Utilize customizable maintenance inventory management software like FMX to track your stock levels in real time with less risk of the human error that comes with traditional methods.

Monitor and audit your inventory levels at least once a week

Complete stock audits, reviews, and updates regularly. Even with a system set in place, some parts may fall through the cracks. Monitor supply chain issues with major suppliers, including those of mission-critical replacement parts. It may be beneficial to sacrifice shelf space for parts where future availability is uncertain.  

You should also make sure the inventory is well maintained, secured, and protected from theft or damage. Ensuring storerooms are clutter-free can not only make it more efficient to find the parts you need, but also lower the inventory’s overall cost by reducing over-ordering and maximizing space. One way to stay organized is to segregate various parts according to categories such as high value, usage, client or department.

Know your parts

Create a cross-functional team of employees that are knowledgeable about inventory control. This takes the tasks off the shoulders of an otherwise busy work crew that may not be adept at completing necessary duties efficiently. Take the time to answer the right questions about your unique inventory needs. Your dedicated team should know the minimum and the maximum inventory amount of each stored item, and when to place orders. What parts don’t need to be kept in stock, but instead can be ordered as required?

To help with time management, you can assess whether working with a third-party inventory management provider may be more beneficial and meet your specific needs rather than taking on the daunting task yourself. This is especially important if your staff are highly specialized and need to dedicate their work hours to specialized tasks. 

Spare parts inventory software for maintenance

Want to improve your maintenance team’s efficiency and make them more confident in their work? Maintenance management software with built-in spare parts inventory management capabilities allows for better planning of repairs and prevents unnecessary downtime. Instead of relying solely on historical data, this software can provide alerts on planned maintenance tasks to ensure the right parts are available and on hand.

A well-versed, fully-configured software that integrates inventory management can help to better maintain inventory levels, track and manage parts, reduce storage space expenses, keep track of work orders, and more. 

FMX software offers a central database for all your facility’s spare parts, helping employees stay on top of their tasks while keeping track of what you have in stock or need to order. Our platform works to better incorporate data that would otherwise be stored separately. Your team can easily manage supply requests, purchase orders, and track usage in real time.

Reporting and analytics are also simplified with the use of dashboards highlighting historical usage, inventory costs, requested quantities, and most-used parts.

If a spare part supply is running low, maintenance managers can communicate in-app with requesters, vendors, and technicians to reduce the amount of downtime from a breakdown and increase productivity.

Get your most accurate supply count yet with FMX and ensure that your team has all of the supplies that they need. Reach out for a demo of FMX maintenance inventory software today.