The 6 ‘rights’ of MRO storeroom quality

Dec. 16, 2019
Follow these storeroom management steps to reduce downtime and improve profitability.

In this article:

Nearly everyone has had the frustrating experience of calling a store to confirm that something is in stock, driving to the store, and discovering that what was relayed over the phone was (or now is) incorrect—the item isn’t there. Another nearly universal experience is happily finding a single remaining desperately needed item in stock only to discover that the box has been opened, creating a mystery as to whether the item will work or even be complete.

These frustrating failures come from the same root cause: poor inventory management, a problem that is equally if not more common in industrial manufacturing than in retail. Moreover, poorly managed inventory in plants has its own root cause: failure to understand that the parts in the storeroom are converted money. 

Money has been invested in parts and materials to mitigate the risk of extended production downtime. When an organization has parts and materials readily available the moment an asset requires them, the parts component of mean-time-to-repair (MTTR) does not extend asset downtime. Conversely, when parts are missing or unusable, downtime can be significant, resulting in expensive expediting and, of more importance, extending process downtime increasing associated revenue loss. Quality material repair and overhaul (MRO) materials management is critical to keeping inventory from being an MTTR liability.

MRO quality is a common goal

Organizations can make great strides in MRO quality by developing stated material management requirements; this often leads to a significant shortening of MTTR-related downtimes. Proper management that delivers results begins with an understanding of the six “rights” of inventory management that form the basis of maintaining material quality: the right part, the right place, the right storage, the right quantity, the right cost, and the right quality.

The right part

Organizations can ensure that technicians always have access to the right part by maintaining clear, correct parts data in the master parts catalog (MPC) within their computerized maintenance management system (CMMS). There are several different fields plants may use to track parts; however, the most important element is to provide the foundational building blocks needed to specifically identify an item. Providing essential information starts with defining the manufacturer and the item's part number. In some cases, a universal product code (UPC bar code) is available – this is an excellent tool for achieving an exact item match.

In addition, some items are made by multiple manufacturers to identical specifications. Providing these specifications in the MPC takes a bit of extra time up front but can lead to expanded sourcing options for purchasing, reducing lead times when ordering parts – and this can directly affect the duration of an outage. Also, to aid in sourcing an item, it helps whenever possible to identify all available suppliers and their catalog number for the item. 

In addition to manufacturer and part number, there are additional fields of critical value: Item description, item cost, lead time (from the time an item is identified for reorder to when the item is available on the shelf), unit of purchase, and proper replenishment criteria are among these. These need to be maintained in their respective fields in the MPC without duplicate entries across the CMMS. Doing so speeds the ordering process to ensure that needed parts are always on hand or can be sourced within an acceptable timeline. It also eliminates confusion and possible errors.

The right place

There is more value than we immediately recognize in the common storeroom mantra of “A place for everything and everything in its place.” A facility facing a process disruption may have the correct, fully functional part on hand, but if nobody can find the part, the plant effectively doesn’t have it. The only thing worse than having to spend a small fortune to expedite a part is having to spend a small fortune to expedite a part that the maintenance team knows is already somewhere in the plant.

Many facilities have a local “parts expert” – an individual who claims to know where everything is. On a typical day, the parts expert can help the plant ensure that parts shortages don’t contribute to extended downtime, but there is no guarantee that maintenance will be required only on typical days. If the parts expert is unavailable for any reason – sickness, vacation, accident, “winning the lottery,” etc. – the facility is left without knowledge of where parts may be stored. Moreover, with more and more experienced personnel (those most likely to be parts experts) reaching retirement age, plants depending on a parts expert could very quickly find themselves with a two-week countdown to a plant full of lost materials.

More reliable than depending on a parts expert is having a clearly organized system for storage of parts. Storeroom shelves should be clean, organized, and labeled for quick stocking and location of parts. Where possible, these locations should also be recorded in the CMMS to help storeroom personnel quickly and reliably deliver parts on demand.

The right storage

Storeroom conditions must be such that they ensure that the integrity of packaging and parts is not compromised. When the storage room is not climate-controlled, parts begin to deteriorate. When parts deteriorate beyond usability, the money invested in those parts is wasted, ultimately resulting in compromised reliability.

  • Humidity control: One of the major culprits for damage to parts in storage is humidity. Humidity not only damages containers but also can cause rusting of materials and moisture contamination of the items, reducing their usability and inherent reliability.
  • Plants will face different humidity requirements based on part types, plant conditions, and the climate of the plant’s location. Typically, relative humidity in the storeroom should be between 0% and 60%.
  • Temperature control: Heat is another concern in the storeroom, as electronics and electrical items will have upper temperature limits. When the temperature in the storeroom exceeds these limits—quite easy to have happen in certain types of plants and certain locations—the parts can quickly be rendered unusable.
  • Organizations looking to drive the most value from their spare parts typically design climate-controlled storerooms to protect the integrity of parts and packaging. Many items need to be maintained between 65 degrees and 75 degrees Fahrenheit.
  • Unique physical storage requirements: In addition to managing the environment around parts, some parts may have unique physical requirements for storage to ensure they are installed at optimal quality when needed. For example, bearings should be stored flat and on isolation pads (if the area is subject to vibration) and in their sealed, unopened containers.
  • Another example can be found in electronics, which should be stored not only in their unopened packaging but also in a static-free environment. Storeroom managers who follow these guidelines ensure that they can deliver technicians parts that are free from introduced defects that may render them unstable or unusable when they are needed most.
  • Access control: Just as a bank wouldn’t offer a 24 × 7 × 365 honor system for any person to walk in and take what they want, nobody should be able to walk into the storeroom and take whatever they want, whenever they want it, without any audit trail. Storerooms should be secured and staffed, and staff should be committed to clear, accurate tracking of all parts usage. Often, this idea is dismissed, as it costs money to staff the storeroom; however, if the salary for proper staffing prevents an extended outage that costs the plant $100,000 – which is quite feasible – the return on investment will be significant. Often a single outage can eclipse many years of salary for proper staffing in the storeroom.

The right quantity

Proper storeroom management means setting the proper reorder criteria: safety stock, reorder point, and reorder quantity (often based on economic order quantity) to maintain the lowest total maximum quantity in stock while still providing excellent service levels for the site. Plants can start developing these guidelines by having a reliable bill of material (BOM) in the CMMS. After defining the site’s most-critical assets – a process that requires a comprehensive criticality assessment – the criticality level can be used to determine the assets requiring a BOM. With the BOM items identified, the number of critical and essential assets using a specific item is known and a realistic usage rate can be determined. Armed with this information, the maintenance team can define the required parts for the plant’s most critical assets and the proper reorder criteria can be set.

Also, the right quantity is often important when parts are required in sets. Much like when lug nuts are replaced on a car, there are occasions when one part is not enough. The car has five wheel studs; five lug nuts are always necessary for replacement. The same issue occurs in industrial manufacturing with many parts needing to be stocked in sets.

The right cost

Managing total cost of inventory has a long-term effect on the plant’s bottom line. In many cases, storeroom personnel need to purchase replacement parts – such as rolling element bearings – from multiple locations. Initially, this purchase may be made from the manufacturer of the asset in which the part will be replaced. However, over time, it may prove more cost-effective to source the part from its direct manufacturer.

Sourcing parts from their original manufacturers (bypassing the asset manufacturer) can save a great deal of money on replacement parts, if it is done properly. It is essential to confirm that the part being purchased is identical to the part supplied by the manufacturer with regard to load capacity, lubrication specification, speed rating, and other critical specifications. Moreover, maintenance teams can be more confident in their choices of replacement parts when they confirm whether the asset manufacturer performs any secondary manufacturing steps on parts to suit their unique applications.

There is nothing wrong with finding alternative sourcing methods to lower the cost of materials if the parts are identical in manufacturer and part number. If alternate parts are recommended, then the storeroom and engineering should be involved to approve the substitution. This is to ensure that even if a less-expensive part saves money today, it will not have a shorter useful life that results in an increase in maintenance – and potentially failures.

The right quality

The personnel responsible for receiving new parts and accepting returned parts in the storeroom can contribute significantly to storeroom quality by paying close attention to the details of parts going into and out of the storeroom. When new parts come in, storeroom personnel must confirm that all part details are correct using the manufacturer and part number. The part number needs to be an accurate match, as a part number ending with a “-1” is not the same as one ending with “-3”. Though most of the part number and the part itself may look the same, it’s possible that such a discrepancy could result in a part that will not work or will fail prematurely.

In addition to confirming that new parts delivered are exactly what they are supposed to be, the storeroom must carefully inspect parts returned by maintenance. Opening the box and making sure no components have been cannibalized and that the parts have been maintained in the proper condition and have not been installed or removed can go a long way toward ensuring that poor-quality and incomplete parts don’t lurk on the shelf, inadvertently extending a future outage and preventing reordering a new item in its place.

The key to successful storeroom management is to know your “rights” and follow them. An organization can go a long way toward managing the material aspect of MTTR by leveraging these rights to consistently make it easier for everyone to do their job the right way and difficult for them to do it incorrectly – in the process eliminating spares shortages and failures that result from poor part quality. Applying effective management processes to plant inventory and continuous validation that those processes are being followed can go a long way toward ensuring that spare parts – a significant organizational investment – are always delivering returns on production, efficiency, and reliability.

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