Three tips to declutter your storeroom and decrease inventory costs

How do you feel when you walk into your organization’s storeroom? Anxious? Frustrated? Maybe even a little afraid? For many organizations, storerooms are like attics: drafty, dark, and disorganized; places you only go if you absolutely have to. This blog post will provide fmxbottoolsyou with some insight to take back your
storeroom and improve your inventory management, enabling you to save time and money in the future.

Let’s look at some numbers

A typical organization overstocks about 29 percent of their internal inventory, according to the findings of CPIM (Certified in Production and Inventory Management), Andrew Gager. Let’s say that your entire inventory store is worth about $50,000. That means that you likely have around $14,000 worth of overstocked materials. Now imagine what you could do if you had that amount back in your budget.

But overstocking is not the only way that inventory can be mismanaged. More than half (58 percent) of a typical organization’s inventory has been stationary for more than three years. Now, some of these untouched items are important, though uncommonly used parts. But a significant portion of these items are probably obsolete. Let’s use the same example as before: if your inventory storeroom is worth $50,000, that means that you have around $29,000 worth of potentially obsolete items.

Why do these problems occur?

  1. No system for obsolete part disposal

Parts and other inventory items can become obsolete in several ways:

Equipment replacement: The equipment that utilized the part was replaced and the parts cannot be used by the new equipment.
Damage: Improper upkeep or accidents have caused the part to become damaged.
Cannibalization: A section of the part was used for another purpose and was not replaced.
Expiration: In the case of consumables, cleaning solutions, etc., the part was not used by its expiration date and is no longer safe to be used.

Without a proper way to dispose of these items, they can take up valuable space in your storeroom, lead to unsafe working conditions, add extra time to simple maintenance tasks, and lead to the next reason, “disorganization”.

  1. Disorganization
    Storerooms are notoriously disorganized. Parts are often stacked on top of each other and are poorly labeled. According to Gager, facilities staff spend about 18 percent of their days searching for tools and inventory. Sometimes storerooms are so disorganized that facilities staff will go out and purchase what they need to avoid searching for it in the storeroom.
    Disorganization will often cause organizations to unnecessarily reorder inventory because parts are improperly labeled or lost. Your staff will then have to wait for the parts to come in before they can complete the work order or planned maintenance task.

How to take back your storeroom

  1. Create a catalog
    The first step in taking back your storeroom is to identify, document, and label what is currently there. This process will help you to identify obsolete items, commonly used items that were ordered and misplaced, and some real gems as well: you may very well be holding on to parts that are out of production but that you still need for your equipment. The best way to catalog your inventory is with a Computerized Maintenance Management System (CMMS), like FMX.
    As you go through this process, be sure to note the quality of each item and its priority to your organization. Is it in good condition? For consumables, is it still within its expiration date? For larger parts, does the item have all of its components? Is the part crucial to maintain operations or is it no longer needed by your organization? Enter these notes in your CMMS so that you can review them as you’re going through the next step, “obsolete inventory disposal”.

How FMX can help: Each inventory item receives its own entry in FMX, where you can include its name, supplier, and any details about its quality and relevance to your organization. Once the entry is created, FMX will assign it a unique QR barcode for easy identification and labeling. FMX also makes it easy to search for the exact item you’re looking for and edit its description or change its quantity. If you already have a spreadsheet of your inventory, an FMX customer success representative can import that information for you.

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Inventory entry
  1. Remove obsolete materials: Once you have identified obsolete items in your inventory, you’ll want to remove them. But wait, remember those numbers from before? You’re likely looking at removing 25 percent or more of your inventory store, and depending on the size of your storeroom, those items could be worth a lot of money. Before you toss them, check with your purchasing and/or financial departments. They may want to sell these materials or donate them for tax credit. At the very least, they’ll likely want to document the loss.

Regarding consumables—If your organization stocks a lot of consumables they likely already have a waste management process. If you are not aware of this process, ask around before you throw these materials in the trash or down the sink. If you have expired commercial cleaning products, check the labels. Manufacturers often include instructions for disposal on the label. If you can’t find any instructions on the label, check with your local waste disposal facility for how to properly dispose of the products.

  1. Determine appropriate stocking minimums and maximums: There is a thin line between being overstocked and being understocked. Think about the inventory used for your most common repairs and planned maintenance tasks. This should give you a good starting point to establish some preliminary stocking levels. Using a CMMS over time will give you a better indication of what your actual minimums and maximums should be.

How FMX can help: FMX can help you track which inventory items you’ve used in the past week, month, year, or more. This information will allow you to more closely predict how many items you’ll need in the future. FMX can also help you keep track of the amount of time it takes to reorder inventory items from suppliers. This information will give you a good indication of how much of a particular item to keep in stock.

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Inventory log

Another thing to consider when determining your stocking minimums and maximums is the item’s priority. For example, if you’re from a manufacturing facility and you do not have a critical part for a piece of production or safety equipment, that can be a big problem. Even if that piece of equipment rarely requires maintenance, it is important to keep at least a few of those particular parts in stock.

How FMX can help

FMX enables facilities managers and their staff to more efficiently and effectively track inventory, equipment, purchasing, and much more. FMX provides a unique QR barcode for every asset, and enables facilities staff to save time by scanning codes from any smartphone or tablet to adjust inventory quantities, obtain asset maintenance procedures and history, and more.

FMX also provides facilities managers with valuable insight into inventory usage and purchase histories.

allison_blog



Allison is a product marketing manager at Facilities Management eXpress. When she’s not writing marketing content, she is likely hiking with her dog or cooking delicious Italian food. 


How to spring into savings by tracking heating complaints this winter

Turkey day has come and gone which means that winter is coming…and so are the heating complaints.

According to a survey by Building Operating Management, 68 percent of facilities managers said that the most common complaints they receive from occupants are about temperature. And 16 percent of respondents said they field a heating or cooling request every day. Complaints can be disruptive especially when you have preventive maintenance or capital improvement projects to get to, but tracking heating and cooling requests over time can provide valuable insight into your HVAC system.

Tracking heating and cooling complaints from occupants

I’ll bet that you can think of a particular person in your building who is constantly complaining about the temperature. How do you determine if the problem is in your HVAC system or your occupant’s imagination? Well, tracking these and other heating and cooling complaints across your building is a good place to start. You may start to see a pattern. Perhaps other occupants in the same area are also reporting issues. Maybe this person is only experiencing issues earlier in the morning or maybe they only experience issues when the outside temperature drops below a certain point. Tracking this kind of data may help you to determine whether a complaint has some substance to it.

Let’s say you’ve received a lot of requests for a certain area and have determined that the temperature in those rooms is not within range. So you check your HVAC system, but it looks okay. Maybe your problem isn’t your HVAC system at all, maybe there’s a leak or poor insulation is allowing heat to escape. Because you tracked the complaints, you were able to determine that there was a hidden problem.

A computerized maintenance management system (CMMS) like FMX can help you to track the frequency, location, date and time of heating and cooling requests.

Responding to complaints

Occupants want to be heard above all else. They will feel a lot better if you can show that you’ve heard them and are making an effort to solve their problem. If you are unable to solve their problem, offering them a kind explanation goes a long way. However, if you ignore complaints, occupants will often take it upon themselves to find a solution to their problems. In the case of heating complaints, occupants will often use personal heaters in their work areas. According to a report by the International Facilities Management Association (IFMA), 60 percent of facilities managers said that their building occupants have brought in personal heaters if they were too cold. Personal heaters can be a fire hazard, cause power outages and can potentially make the problem worse.

A CMMS can improve communication between your team and building occupants. And with FMX, requesters are alerted when any progress has occurred on their request.

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Tracking maintenance activities

In addition to tracking complaints, you should also keep a log of your maintenance activities. That way if you experience similar HVAC problems in the future, you’ll have documentation on how you fixed it last time. Tracking maintenance activities should also give you an idea of which pieces of HVAC equipment are requiring more maintenance than others: maybe a particular model is underperforming, maybe all of the models from a specific manufacturer are under performing. Having this information documented will help you determine when to replace your equipment and with what.

FMX can help you coordinate HVAC repairs whether they are performed in-house or by a vendor.  You can also track how often you’ve had to make an HVAC system repair and to which pieces of equipment.

Tracking costs

Determining when you should make a capital improvement to your HVAC system can be a bit tricky, but it is worth it. You’ll need to know the amount of worker hours it takes to repair your system and whether or not they’ve increased over time (or the amount of time it takes for your vendor to complete the project and what their hourly rates are). It is also helpful to know your cost of inventory for each repair. This should give a basic idea of how much you are spending on your current system and whether or not it would be cost-effective to replace part or all of your HVAC system.

With the reporting and dashboard module in FMX, you can track labor hours/costs and inventory expenses, so that you can focus on convincing your boss to invest in capital improvements.

How FMX can help

FMX enables facilities managers to more efficiently and effectively track work orders, schedule resources, and plan maintenance. Our cloud-based solution features a calendar view simple enough for your team and your occupants to use to submit, track, and manage their requests. You can also use FMX to track equipment histories, worker hours, vendor rates and inventory.

 

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Allison is a product marketing manager at Facilities Management eXpress. When she’s not writing marketing content, she is likely hiking with her dog or cooking delicious Italian food. 


Five Ways Facility Managers Can Improve the Bottom Line

In today’s economy, every organization, whether large or small, is looking for ways to save money. Facility managers are in a unique position to have a positive impact on the bottom line. That is, if they have a good facilities management (FM) software solution that can help them identify and take advantage of cost-cutting opportunities.

There are many FM software packages on the market today. Here are some tips to help you choose the most effective one so that you, as the facility manager, can take a leadership role in lowering costs to boost your organization’s bottom line.

1. Determine the type of data you need to better analyze your costs.

In order to choose the right system to fit your unique needs, choose an FM solution that will give you the solid information you need to make sound decisions. It should help you analyze space utilization and spending trends across time in order to determine where cuts can be made without sacrificing resources and efficiency.

2. Closely examine areas that may not have been considered before.

While immediate cost reductions are certainly the goal, don’t pass over good opportunities just because the rewards will be months out. The need to lower costs will likely always be a consideration. Your FM software can help you readily identify these opportunities so that you can take decisive action. For example, perhaps the data in your FM software shows that the repair cost for a particular equipment item has gotten quite expensive. Replacing that equipment item may be the most cost effective solution.

3. Turn off systems and equipment when not in use.

You can save thousands in operating and energy costs if you track facility events and schedule your building systems accordingly. Compiling this data in one single location makes it easy to determine which systems need to be running – and when – and which can be switched off. Your FM software can also help you schedule and keep track of after-hours events so that you can invoice outside organizations for the use of your facilities – perhaps an untapped revenue stream for you.

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4. Develop a regular maintenance schedule.

You need a maintenance plan to keep your equipment in perfect shape and running efficiently. Your FM software should help you easily keep track of preventive maintenance for all systems and equipment. This will pay dividends in energy savings over the long haul. In case you missed it, check out our recent blog post to learn how FMX can help you lower your utility costs.

5. Keep good records and examine your spending patterns.

The FM system you choose should maintain a history of all inspections and repairs. Software that utilizes time and date stamps, as well as a record of who performs the inspections, is desirable. It may also help you examine spending patterns across all your facilities, perhaps highlighting opportunities to consolidate vendors. By managing work orders efficiently, you will also be able to group some work together and provide more lead time to contractors, resulting in lower costs.

Englewood results

With a good FM solution like FMX, you will have, at your fingertips, the data and information you need to analyze facility and equipment costs, and the means to establish strategies and take action to reduce expenses.

Source: Michel Theriault, Strategic Advisor website, “Facility Managers can add to the Bottom Line with Cost Reductions” http://strategicadvisor.ca/index.php?option=com_content&task=view&Itemid=34&id=149