How Can Outsourced MRO Storeroom Management Services Reduce Inventory Carrying Costs?

Managing core business activities as an entrepreneur or manager means that day-in and day-out, there are continuous improvements on business processes and finding cost cutting methods. One area that tends to be underutilized is the maintenance, repair and operations (MRO) storeroom. How are outsourced MRO storeroom management services able to cut back on the costs of sitting on inventories?   

On average, outsourced MRO storeroom management services are able to save inventories by 20-30%. This is made possible by a lower amount of inventories required for carrying out operations, more efficient purchasing, and a focus on analytics that assists strategy development.  

Although this succinct response addresses the question quite well, there is certainly a lot more to think about in relation to MRO storeroom management outsourcing. Advancing reading will not only show you the tactics that can assist you in your business but also the merits that come with the tactics which can help you minimize costs while enhancing the efficiency of your operations.  

What Are The Key Strategies Used By Outsourced MRO Storeroom Management Services?  

Outsourced MRO storeroom management services employ several key strategies to reduce inventory carrying costs and improve overall efficiency. One of the primary approaches is implementing advanced inventory optimization techniques. These techniques use sophisticated algorithms and data analysis to determine the ideal stock levels for each item, balancing the need for availability with the cost of holding excess inventory.

By outsourcing services, businesses are able to have preexisting relationships with suppliers and utilize bulk purchasing abilities to obtain more favorable pricing and terms. They also adopt just-in-time inventory practices which ensure that parts and materials will only be ordered and delivered as required, which reduces carrying costs.

Moreover, these services also normally bring with them very sophisticated data analysis and reporting capabilities. Their ability to closely monitor consumption patterns, lead times, and other relevant figures enables them to make strategic decisions in relation to inventory management and, most importantly, identify further cost-cutting opportunities.

How Does Outsourcing MRO Storeroom Management Help in Boosting Operational Efficiency?

In addition to encouraging the reduction of inventory carrying costs, MRO storeroom management outsourcing renders great benefits in terms of operational efficiency. Central to this is the standardization of specific steps and best practices. Outsourced providers possess best practices and industry knowledge that has been proven to enhance accuracy and reduce operational inefficiencies.

Such services often include basic concepts like inventory tracking systems which many clients do not think twice when outsourcing them together with barcode scanning. This equipment cognitively reduces the time required to find and retrieve items, which decreases delays during maintenance and repair activities.

In addition, MRO storeroom management that is outsourced can also reduce internal organizational resource requirements.

With the Management of the Storeroom being transferred, your staff will be able to concentrate on day-to-day business activities and this may enhance productivity and creativity in other sectors of your operation.

What Challenges, if any, have been anticipated by Companies that Outsource the MRO Storeroom Management?

Despite these counter arguments, MRO storeroom management can be outsourced, and so it is important to consider possible obstacles. The inability to meet goals within a fixed time frame is perhaps the most typical example because there will be a learning process at the early stage. This may cause some interruptions in using new technologies and employees may need time to adjust to new habits. 

A third area is information sharing and cooperation with the internal clients of the outsourced provider. Among several measures, the determination of the expected levels of service and performance is important so that clients are satisfied with their requirements. 

Lastly, companies should think over the expected costs of outsourcing in relation to expected costs as well. It should not make the outsourcing activity attractive on the one hand but on the other, certain amount of internal knowledge and management will be needed to avoid outdated services.

How Do Companies Assess The Effectiveness Of An Outsourced MRO Storeroom Management?

It is necessary to measure the effectiveness of MRO storeroom management so as to understand if the management has been valuable and satisfactory for the costs.

A measurement that should receive special attention is the decrease in inventory carrying costs. This can be achieved by looking at the total value of inventory items possessed before and after outsourcement and also keeping tabs on the inventory turnover ratio. 

In addition, another critical key performance indicator is the increase in equipment efficiency and uptime. Following the availability of the right parts when necessary, MRO over the counter management should enhance efficiency by reducing maintenance related downtime. This applies to MTTR and OEE metrics. 

Also critical is customer satisfaction. This could be in the form of surveys of internal “customers” such as the maintenance technicians and other personnel who make use of the MRO store. The assessments should also include metrics like parts availability, difficulty in locating items, and the overall quality of service.

Which New Developments In MRO Storeroom Management Should Companies Pay Attention To?

MRO over the counter management is a work in progress where advancements are made to this body of knowledge as updates to improve efficiency and reduce costs is the order of the day. A case in point is the replacing of outdated maintenance practices with predictive maintenance technology.

Through the implementation of data analytics and machine learning technologies, it is now possible for businesses to forecast when an equipment is most likely to break down, and even have the required components on hand, optimizing the level of stock available. 

One of the newest phenomena is the integration of Internet of Things (IoT) devices into MRO storerooms. These can be connected devices that track inventory levels, consumption patterns and even environmental parameters, thus improving the level of decision making. There are also companies that have begun to investigate the feasibility of employing RFID tags to ensure effective and accurate stock control. 

Another key aspect that is gaining more traction is sustainability in MRO storeroom management practices. This also extends to smarter inventory practices to minimize on waste and proactively addressing the ecological concerns associated with the items being procured, stored and used. Recently, some managed MRO services have been advocating the use of less harmful substitutes for some of the more common maintenance and repair items used in some of the MRO services. 

Finally, companies are beginning to build more collaborative relationships with their outsourced MRO storeroom management providers that go beyond just client-vendor perspective. Many companies now are interested in forging synergies with their providers who are able to assist with improvements in the overall operations, not just the storeroom.

Leading The Way

It is now time to act and implement outsourcing MRO services in the management of MRO storerooms as well as provide the required stock management solutions. As you have already understood, such an approach leads to the reduction of inventory carrying costs as well as greater operational effectiveness of companies that employ the services.

Start off by analyzing current MRO storeroom practices and isolating areas suffering from over- spending and wastage. This enable evaluation of the baseline and later determine whether outsourcing is ideal for the company’s specific needs and aspirations.