Growing Your Efficient Storeroom: Part III

From foundational to intermediate: Part III

Last month, we spent time discussing the remaining Strategic Practices: those remaining items identified in yellow blocks:

  • Special Tools
  • Safety Items
  • Materials Scrap
  • Disposal of Scrap
  • Salvage Value

For August, we are going to discuss the Tactical Processes: those items identified in blue blocks:

  • Parts Standardization
  • BOMs
  • Requisition of Material
  • Receiving Purchased Items from Stores
  • Obsolescence
  • Repair or Replace
     

 

Figure 1:  Intermediate-Efficient

 

I’ll start this month’s blog with a discussion on BOMs, or Bill of Materials.  To be clear, the BOMs that we have for our assets should be the ‘as-built’ BOMs and not the ‘as-designed’ BOMs.  The difference is subtle; one reflects what we actually have, and one reflects what the OEM intended to deliver.

A BOMs is a listing of all the components required to make the asset, or the ‘thing’ we are making.  Our organizations are already experienced with the BOMs concepts and the process by which we create and adhere to them.  Consider the product or service that your company makes or delivers.  Doesn’t production have a good sense of what is required to make a singular unit of that SKU (stock keeping unit)?

For example, if your company was making ready-to-eat honey injected hams, your production department would have listed as the necessary items:

  • 1 ham
  • 6 ounces honey
  • 10 ounces brine (salt water)
  • 0.5 pounds of wood chips (for smoking)
  • 1 net (for hanging in the smoker oven)
  • 1 glaze packet
  • 1 cooking instruction packet
  • 1 bag for vacuum packing
  • 1 tag
  • 1 net (for hanging at the store)
  • 1 label

Every item needed to make one unit of the SKU (or in this case, 1 honey injected ham) is on the list.  Production now knows what materials are needed to make 100,000 honey injected hams.

BOMs appear as tables inside our CMMS, but in our minds, a BOMs usually exist as an image.  It’s more common to think of a BOMs as an exploded view diagram, similar to what we see in technical manuals.  As an example, to construct this lamp, you’ll need all these parts (the part details would normally be listed on following pages in the manual):

The detailed hierarchy for the lamp’s “plug” might be:

 

The significance of the BOMs to the storeroom is simple.  The storeroom only stocks MRO items that appear on a BOMs for an asset; a current asset in the plant, to be precise. 

Your storeroom shouldn’t stock every item on a BOMs: only the items on a current and valid BOMs for an asset will be considered for stock.  By default, we now have a list of items that we will stock, and a list of the items we know about, but won’t stock.  There are no surprises when your BOMs are correct.

Here is how you know if you have a Bill of Materials problem:

Mechanic A:  “We need to replace the belts on the fan on the roof”

Maintenance Supervisor:  “What size are the belts?”
Mechanic A:  “I don’t know”
Maintenance Supervisor:  “Go up to the roof and find out”

BOMs problem!

Once the BOMs are in place, an effort to attack parts standardization can be made.  Ostensibly, after the BOMs building process, we’re left with a complete and thorough listing of all the parts that are needed to make up all the assets we own.  This listing is extensive, in that all pertinent details are known.  Simple comparisons can be made between similar components to see if they share significant attributes; if so, then there could be savings by reducing redundant inventory.  Likewise, after the BOMs process, more is known about what works in our plant, and what we already have in stock.  Engineers and maintenance leadership can make better decisions on equipment modifications or new equipment designs and incorporate components that are already proven to be robust enough to operate in your plant’s conditions, as well as components that you already stock, or know where to get.

The requisition of materials process is almost a moot point with the growth of computerized purchase requisition processes in today’s manufacturing and service facilities.  However, there are some elements that must be sustained.  For example, all non-stocked MRO items that are ordered must have a corresponding work order number, and that number must be listed on the purchase requisition (to be listed on the approved purchase order).  When at all possible, purchase requisitions must be aimed at approved and vetted vendors, and there must be all effort given to avoid the use of the company P-card.  Vetted vendors and work order numbers on P.O.s help to expedite the receiving process, the reconciliation of the shipping documents with the P.O.s, and the accounts payable function.  This makes your company a ‘good company’ to do business with.  Listing the W.O. number on the P.O. gets the part to the right job.

Consider this; we don’t issue MRO parts out of stores without a work order.  Why then would we allow someone to order an MRO part without a work order?

Receiving Purchased Items from Stores is a short and sweet process.  Non-stocked, purchased direct MRO items that are received in the storeroom are to be placed directly in a job kit.  If this does not happen, the following scenario absolutely will happen:

The part arrives and gets reconciled with the P.O.  The maintenance supervisor who ordered the part is notified and the part is placed on a shelf on a rack in the storeroom with a tag bearing the supervisor’s name.

And that part is still sitting on that shelf, on that rack, with the supervisor’s name.  Still!

Non-MRO, direct purchased items are received, reconciled and taken out of the storeroom immediately.  The storeroom is not a convenient storage location for everything. 

I read an article from a major global supplier recently that indicated, in their estimation, that 60% of all storeroom inventory was obsolete.  The trouble, quite frankly, is that most companies don’t have a formal obsolescence program to identify what is obsolete or to handle this category of inventory.

Items become obsolete, sometimes, through no fault of our own.  Most company leaders want to find fault with someone who would allow a level of inventory to become obsolete under their watch.  Technology advances make much of our inventory obsolete (think ice-cube relays); engineering upgrades and elimination of assets, etc. can lead to honest obsolescence.  What’s primarily important is to have a process to identify items that could potentially be obsolete, and further, that process should describe how to remove and write-off the component from inventory.

For storerooms, the most powerful tool to use in identifying candidates for obsolescence is the ‘last used’ report.  I suggest that items that haven’t issued from storerooms in 400 days be considered for discussion.  The questions are very simple:

  • What is this part
  • Where is it used
  • We haven’t used a single one in >= 400 days, do we still need to stock X (number)

Ultimately, maintenance is responsible for three critical inputs into the storeroom inventory:

  • What to stock
  • What quantity to stock it in
  • What can we get rid of

Building on that last point, the maintenance department is also responsible for communicating to stores what items are to be considered for repair or replacement.  There are a few general rules to consider.  All repairable spares will have individually unique serial numbers.  All repairable spares, when sent out, will be accompanied by a work order (listed on the purchase order for the repair).  All repairable items, when removed from service, will be taken to the storeroom in a clean, safe, and complete state for shipment to the repair facility.

A world class storeroom doesn’t accept a ‘bad’ hydraulic motor, leaking fluid, and hoses sticking out, tossed on a pallet, and sitting at the gate to the storeroom, with no documentation.

September’s entry will complete our series-within-a-series where we’ve taken considerable time to describe the aspects that are true in the Intermediate-Effective portion of our World Class MRO Roadmap.  In September, we’ll continue our discussion with more on the Last Used Report (mentioned above) and on optimizing the physical layout of the storeroom.

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