MRO Storeroom

MRO Strategic Sourcing: Assess Current Spending

In a recent blog post titled "MRO Strategic Sourcing: The Expensive Table Scraps", I explained that too many organizations leave money on the table due to poor procurement practices.  I outlined 7 fundamental steps to optimize strategic sourcing. This post is the first in a 7-part series in which I will go into more detail for each of the 7-steps and discuss how it applies to MRO Storeroom operations.

7-Steps to Optimize Strategic Sourcing:

MRO Strategic Sourcing: The Expensive Table Scraps!

Have you ever heard the old saying, “Money left on the table?"  That’s exactly what North American organizations are doing when they fail to use strategic sourcing activities to source MRO materials.  Conservative estimates have shown effective strategic sourcing has led to reductions in spending ranging from 15% - 25%.  Furthermore, la


rger companies place more emphasis on sourcing strategies for office supplies rather than critical spares.  I have yet to visit an organization that carries more ink cartridges and post-it notes than the value of a typical MRO Storeroom.

Here are a few things to think about and review before heading down the path of strategic sourcing.:

World-Class Maintenance: Key Activities

In 2010 I flew 232,000 miles and circumvented the world several times to support clients achieve their reliability goals.  So far in 2011 I’ve worked in North Dakota, Florida, Oregon, Texas, Louisiana, Korea, Malaysia, and Scotland.   My point is not to promote my busy travel schedule but to shed light on some commonalities of mainte

nance, no matter the country or industry. 

I admit there are nuances that make certain operating environments different and sometimes unique, however I have listed some key maintenance activities that are required for any operation to become world-class. This by no means is an exhuastive list, just some key activities.

Justify Maintenance Storeroom Attendants measuring current costs

Many companies do not have the proper staffing in their storeroom to provide world-class services to their maintenance department.  These services include but are not limited to; kitting parts for planned work, ordering the right parts in the most economic quantity, reserving parts for future work and delivering parts to maintenance.  The number one reason listed by these understaffed organization's for being understaffed is a lack of money.  

World-class companies overcome this obstacle by identifying the cost savings associated with each of these services.  So, what happens when a storeroom isn't staffed properly and run efficiently? Maintenance craftspeople may start to gather their own parts, reducing their wrench-time; stocking-out of parts when they are needed, resulting in extended production downtime and the ensuing extraordinary efforts and cost of getting parts delivered are only a few to name, the list is extensive.

Management Insight: How to Quantify Lost Production

I work with organizations around the world. With every group of managers, I ask one simple question: What percentage of your time do you actually spend supervising or managing your staff? The results are staggering: less than 10 percent.

When I ask managers to explain the reasons, I receive varying explanations. Mostly, supervisors and managers say they need to watch their workers to make sure they do what they are actually supposed to do. I looked up the definitions of supervise and manage, and in neither case did I see a mention of babysitting.

When I worked as a plant manager, I used to cross the title off my business cards and replace it with vice president of child-care services. Why? Because some days, that title best defined my duties. I lost track of the truly important responsibilities: managing the business, coaching, mentoring, and ultimately, improving the department's performance and the organization's bottom line.

3 Consequences of a Poorly Run Maintenance Storeroom (Video)

Poorly run maintenance storerooms can impact an organization's performance and bottom line in three ways:

  1. Constrict Cash Flow
  2. Reduce Productivity
  3. Increase Unnecessary Costs

Less tangible, but equally significant, a poorly run storeroom also affects employees' perception of the storeroom's value and their confidence in the storeroom's ability to stock the right parts, in the right quantity, at the right time.

Andy Gager, Director of Consulting, discusses some tactical processes and strategic practices that any storeroom can employ to avoid these three consequences to become a true profit center.  


MRO Inventory Management: 3 Key Factors (Video)

Successful inventory management is dependent upon three key factors: having the right parts, at the right time, in the right quantity. In this short video, recorded at the 2010 NFMT conference, Andy Gager, talks about these key factors as well as the importance of an honest storeroom self-assessment and the value of benchmark data.

The video is hosted by Click on the link below and clicking the green button in the top right corner of the page to skip passed the advertisement.


MRO Video

Maintenance Inventory Strategies: Vending Machines & RFID

Maintenance Inventory Strategies: Vending Machines & 

Part 3 of a 4 part series featured in and Maintenance Solutions Magazine, November 2010.


One proven strategy for streamlining inventories involves placing vending machines strategically throughout a campus or facility. The machines store commonly used items, such as gloves, tape, lubricants, and batteries. Studies show that by placing these items in vending machines, managers can cut storeroom inventories by an average of 20 percent, and labor costs drop by up to 40 percent.

Maintenance Supervisors – Are They Set-Up for Success or Failure?

Is your organization proactive about training or do they opt for the “Baptism by Fire” approach? 

Success and Failure

Too many facilities I visit have no formal training plans. A key position which training is often overlooked is supervision.  The common misconception is that because the individual was a good maintenance mechanic or technician, they must automatically default to being a good maintenance supervisor.  I tend to believe not.  I would rather see good employees promoted to make excellent maintenance supervisors and given the appropriate support to assure their success, rather than setting them up for failure. Success requires a comprehensive understanding of the new role and responsibilities. Often the best way to attain this understanding is through training

Controlling Maintenance MRO Inventory Materials and Spares

Companies can realize significant savings by controlling inventories of maintenance materials.  Two points should be understood by all persons involved with developing and instituting a maintenance MRO inventory control system:

  1. Inventory control does not necessarily mean that inventories should be kept at a minimum and or current dollars in inventory is too high.  The lowest possible inventory is often not the best or least costly in terms of total cost.
  2. Although the relative important of various inventory control objectives may change with changes in business conditions, the need for effective control of maintenance inventory is constant.

Maintenance inventory control is best approached by working out the answers to these questions: 

  • What items need to be ordered? 
  • When should an item be ordered? 
  • How many items should be ordered? 
  • From whom should it be ordered? 

These questions can be answered if specific information on each item stocked is available, and various terms concerning inventory control are understood. Formulas can be used to determine the appropriate order quantity if specific information about an item is known.

MRO Storeroom Best Practices - Are you Kitting me?

The storeroom is an integral part of an efficient and effective maintenance process. Equipment reliability, uptime, and frontline productivity rely on having the right spare parts and tools available in the right quantity when the work order is scheduled.  That's why having the correct tactical and strategic processes in place can turn your storeroom into a profit center.  Today we are going to focus on kitting, one of the key tactical processes.  Kitting is the process of identifying and preparing - in advance - the material and tools required to successfully execute the work order in the least disruptive manner.  Effective kitting requires other key maintenance systems such as planning, scheduling, and an established PM program to be in place.