Inventory management is the unsung hero of your maintenance operations. And yet, it is one of the major issues in the production process. With the right methods, you can improve your operational performance while achieving significant savings.
The fundamentals of inventory management
To get the most out of predictive maintenance, this approach must be applied throughout the entire value chain. There’s the rub… Too many companies still aren’t cross-referencing their data analysis results to optimize their processes. This is especially true with regard to stock management. However, it is essential that the maintenance teams, which are working on the equipment, not only have a clear vision of inventories but also that they participate in their monitoring.
Talking about stock management can be more complex than expected. It shouldn’t be summed up as a simple list of spare parts, tools or consumables. In fact, it involves ensuring the availability of all the products necessary for the continuity of production and maintenance activities, at the best price.
Poor inventory management can have a significant impact on your budget:
- Stock shortages generally involve a temporary, but unforeseen, downtime in production, and consequently, possible delays in delivery to your end customers.
- Surplus inventory generates additional maintenance costs, but also an increased risk of obsolescence of your products.
Indeed, stocks are particular in that they represent a “double burden” for the company: the cost of purchasing the product itself, as well as the storage costs associated with it (insurance, security, warehouse charges, etc.).
How to improve inventory management?
In 2018, an Emerson study estimated that a maintenance technician could spend up to 25% of his time looking for spare parts or other consumables needed for his daily activities. Over a year, if you multiply that by the number of operators, the impact on your production line can be considerable.
Nevertheless, it is possible to improve the follow-up of your inventories by adopting some simple reflexes.
Prioritize your goods
A good inventory is first and foremost a well-organized inventory. Production and maintenance agents should be able to quickly find the products they need to carry out their activities.
Manage your spare parts directly on your CMMS solution
To achieve this, it is essential to define a classification and coding system shared and adopted by all staff. One of the most recognized practices in stock classification is the ABC method. It consists in prioritizing items according to their annual consumption value, i.e. their importance and profitability (A being a strategic product, C an element of lesser importance).
According to Pareto’s law, 80% of the total consumption value is based on 20% of the total items. In other words, Category A items will be consumed more quickly, and their replenishment will be frequent. They will, therefore, have to be strictly controlled by maintenance and procurement managers.
Once this prioritization is complete, it is recommended to add a comprehensive description of each product for ease of use. By uploading their official catalog on Mobility Work Hub, industrial manufacturers and suppliers can add technical documents and terms of use to their products. Maintenance professionals can then consult this information directly within their CMMS (computer-aided maintenance management).
All stored elements must be associated with a clear reference, consisting in a series of digits and letters, allowing them to be categorized by product family. Ideally, the codes used will have a descriptive function and will facilitate their tracking.
Monitor stock movements
This codification system is particularly useful for monitoring stock movements. Thanks to the cooperation of maintenance team, stock inputs and outputs are easily tracked by interfacing CMMS and ERP tools.
Predictive maintenance data is of great help when planning replenishments. Their analysis makes it possible to precisely assess the evolution of demand for each item, and to adapt its order rate accordingly.
When field operators systematically enter the number of items removed, it becomes easier to know the stock level at any time. Similarly, predictive maintenance plans provide better visibility into future field needs. Based on this data, operators accurately determine the rate of stock rotation.
However, to ensure the success of this approach, it is imperative to define, in advance, a number of processes (material handling, items inputs and outputs, receipt and storage of stocks, etc.) and to specify the actors responsible for their follow-up.
Choosing predictive maintenance to better manage your stocks
Today’s – and tomorrow’s – industry, driven by the emergence of cutting-edge technologies, is moving towards just-in-time production. With this in mind, stocks are reduced to a minimum. In this respect, predictive maintenance appeals to companies with the promise of fewer repairs thanks to regular maintenance, adapted to the production line.
Combined with predictive data analysis, it provides valuable data on the condition of your machine fleet and improves maintenance. Maintenance plans, in particular, provide information on the frequency of use of consumables. Thanks to preventive maintenance, the number of unexpected activities is reduced, leaving room for a forward-looking management of spare parts and consumables.
Monitor and analyze the state of your equipment and spare parts movements
Companies are less vulnerable to unforeseen events (sales fluctuations, supplier stock-outs, etc.). It is then possible to integrate new software solutions to support inventory management.
For example, technical operators can define a reorder point for the most strategic items, i.e. a minimum stock threshold necessary for proper business continuity. When a maintenance technician records a stock removal in his CMMS, an alert can be automatically sent to the supply teams via your ERP.
Manage inventory from end to end of the value chain
In recent years, with the rise of IoT (Internet of Things), companies have gradually shifted to circular ecosystems. Functions are linked by next-gen solutions that are connected throughout the value chain. Similarly, stock management is carried out in close collaboration with all supply chain players.
Supplier relations
With next-gen CMMS and ERP, Purchasing teams are receiving real-time updates on the needs of maintenance teams. By providing greater flexibility, these technologies are reshaping the relationships that companies have with their suppliers.
Directly inspired by Industry 4.0, Mobility Work works to bring supply chain players together. While developing Mobility Work Hub, our teams wanted to provide industrial manufacturers and suppliers with a dedicated space to exchange with their end customers. Thanks to this collaborative platform, maintenance professionals can look up our suppliers’ official catalogs and contact them directly from their CMMS.
This increased proximity supports sourcing activities and supplies management. Field teams have a better visibility on suppliers’ procurement opportunities. They are thus able to assess the pace of their orders and reduce slowdowns on the production line.
Collaborative inventory management
Exchanging with its manufacturers also makes it possible to improve the maintenance of its equipment and, in the long term, the management of their stocks. Suppliers on Mobility Work Hub have the opportunity to share their technical documentation with maintenance professionals. These best practices help them optimize their predictive maintenance plans.
In addition, suppliers can help perpetuate good warehousing practices and facilitate inventory inputs by proposing or aligning with their customers’ coding principles. In this respect, it is recommended to use UPC codes (or CPU, universal product codes) as a basis for identifying your goods. Orders, deliveries and storage will only be made easier.
Developing an inventory tracking system requires the collaboration of many actors: maintenance teams, suppliers, manufacturers… However, you will benefit in many ways.
Knowing the precise status of your inventories allows you to rationalize their movements according to your real needs. Companies operating on a just-in-time basis reduce the amount of inventory to be managed and, consequently, operating costs.
