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Determining the optimal stock levels for MRO spares should be a science, not an art. But for most organizations, it represents an impossible numbers game.
Inventory managers are faced with the challenge of managing tens or hundreds of thousands of items, each with their own characteristics, requiring complex and time-consuming calculations. Without a structured methodology and powerful analytical tools, the proactive management of large inventories becomes an impossible task, resulting in rapidly increasing inventory levels combined with critical shortages of spare parts.
Today, organizations without optimized inventory run the risk of overpaying and underperforming.
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In order to avoid costly shortages, MRO inventory managers often choose to err on the side of caution when it comes to determining stocking levels.
But that strategy has its costs. Inventory consumes space, gets damaged, and sometimes becomes obsolete -- and carrying surplus inventory costs the organization. Over time, massive amounts of unused or obsolete inventory translate to waste and loss.
Simply, optimizing inventory means finding the perfect balance between demand and supply. Optimized service spares inventory maintains a level of inventory that virtually eliminates out-of-stock situations while improving efficiency and cutting inventory costs.
Optimizing MRO Inventory
To achieve key business benefits, companies need an approach that supports the unique management requirements of MRO inventory, including:
* High criticality
* Long lead time
* High price
* Generally infrequent and highly variable usage
* Low data quality
Optimized inventory requires frequently obtained data points and evolution of the inventory in question based on those measurements in real time. A decision support system that incorporates best practice methodologies gives inventory managers a powerful tool to manage their business objectives and make their teams significantly more effective.
By leveraging technology tools, automated processes and inventory management best practices to optimize MRO spares and consumables, asset-intensive organizations can consistently produce results like these:
* 15-25 percent reduction in funds invested in safety stock
* 5-20 percent decrease in write-offs of surplus and obsolete stock
* 10-25 percent fewer stock-outs, for improved availability and...