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Posted On: 01/11/2006

MRO Software allies to add inventory optimization

PlantServices.com

MRO Software announced a marketing alliance with inventory optimization specialists Xtivity to enhance the service offering of inventory management solutions for MRO Software customers. MRO will now offer Xtivity’s Inventory Optimizer (xIO) service as an extension of its asset and service management solutions.

xIO examines a company's transactional inventory data and calculates the appropriate order point and order quantity for every line item in maintenance inventory using a scientific approach with proven statistical methods. The objective is to maximize fill rates, reduce total inventory cost and prevent ongoing purchase of items that will become dead in the future.

“Recent ARC research identified MRO optimization as a very important asset management trend that delivers significant benefits," says Houghton LeRoy, research director at ARC Advisory Group. “The combined MRO Software and Xtivity inventory management and optimization solution is positioned as an easy way to achieve MRO optimization and the associated benefits.”

A typical company could have thousands or even hundreds of thousands of line items in MRO inventory. “They may be able to manually review 1% of these items to see if order points and quantities are accurate on an annual basis,” says Ned Meyer, vice president, Xtivity. “The xIO, in contrast, examines 100% of these items each and every month, and optimizes order points and order quantities accordingly. This typically results in savings of up to 10% of total inventory value that can be driven directly to the bottom line.”