![]() Applicable laws may vary by state or locality. Additional information and exceptions may apply. This content is for information purposes only and should not be considered legal, accounting, or tax advice, or a substitute for obtaining such advice specific to your business. These KPIs will prevent rogue spending and risky purchases. Setting key performance indicators (KPIs) like lead times and reorder points will get your team aligned on how much MRO inventory you should have at a given time and when it will be replenished. ![]() Without standards, measuring performance can get messy. Taking these metrics, you can dial your MRO purchase orders up or down to control costs and make the most of your stockroom space. ![]() With a combination of demand forecasting and historical data, you can predict the busiest times of year for your business. Before you optimize anything, do an audit of your equipment and eliminate anything you don’t use. This can lead to an abundance of redundant MRO inventory that takes up space and resources. Stay leanĪs your business grows, it also becomes more complex. Using these insights, you can create a regulated replenishment cycle. This is where ABC analysis comes in, which groups items into categories based on their level of value within your business. Prioritizing critical items helps you determine what you should always have on hand. Some MRO items are more important than others. Here are four tips to take control of your MRO inventory. MRO inventory might not stand out on a balance sheet, but those small costs add up over time, especially if you don’t keep a close eye on them. Now that we’ve covered the tactical components of MRO inventory control let’s move onto strategy.īest practices for MRO inventory management Investing in this approach frees up your team to focus on their strengths. This is known as “vendor-managed inventory” or VMI. In that case, the vendor could monitor its inventory levels in your storeroom and place a purchase order when you run low. In this approach, some aspects of your MRO inventory are handled in-house, while others are outsourced to a third party.įor example, suppose there’s a compressor you need for your manufacturing process. Using your internal staff to manage MRO inventory gives you more control and tends to cost less, but manually monitoring stock levels can be time-consuming. You can control the flow of your MRO supplies using an ABC analysis, the Just-In-Time method, or other inventory management techniques. Here are three approaches to consider: In-house management MRO procurement might not be the star of the show, but proactively managing it will help you maximize productivity and improve your cash flow. These analyses involve cutting-edge demand forecasting and cost analysis. Inventory analysis is often reserved for “traditional” types of inventory, such as raw materials, work in progress, or safety stock.
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