When managing MRO (Maintenance, Repair, and Operations) inventory, it’s essential to focus on strategies that streamline stock management, minimise excess, and keep critical items available without overstocking slow-moving items. Reducing slow-moving MRO inventory can significantly impact overall efficiency and cost savings. Here are some practical approaches to tackle the issue.
A critical first step is to shift to a demand-driven approach, where actual consumption data and reorder points (ROP) dictate restocking decisions. For MRO inventory, this means analysing the usage patterns of tools, parts, and supplies that are crucial for operations but not necessarily used every day. By focusing on accurate usage data, inventory levels can better match the real needs of the business, reducing slow-moving items and minimising excess.
Optimise the MRO Catalogue
Many organisations carry too many SKUs that don’t contribute much value. To combat this, regularly review your MRO SKU portfolio, identifying underperforming or obsolete items that could be phased out. Streamlining your catalogue reduces inventory complexity, making it easier to focus on key items that have a higher turnover, while eliminating those that simply take up space and tie up capital.
Enhance Supplier Collaboration
Collaborating closely with suppliers can also help reduce slow-moving MRO inventory. By working together, you can negotiate better minimum order quantities (MOQs) and lead times, ensuring that stock arrives only when it’s needed. Additionally, suppliers can offer valuable insights into which items are becoming obsolete or less popular, allowing you to adjust your inventory strategy accordingly. This proactive approach can prevent stock from sitting idle on shelves for extended periods.
Enhanced Forecasting
Forecasting isn’t just about predicting future demand for materials to end-users, it’s just as important for MRO supplies. By refining your forecasting methods, you can anticipate which items are likely to be used in upcoming maintenance schedules, project timelines, or seasonal fluctuations. Investing in better forecasting tools or integrating your MRO system with operational data can help prevent over-ordering of items that will become slow-moving, while ensuring critical parts are available when needed.
Reevaluate and Adjust Safety Stock Levels
For MRO items that move slowly, it’s important to regularly assess and adjust safety stock levels. Often, safety stock is set too high for items that are infrequently used. By revisiting these levels periodically and reducing them where necessary, you can free up capital and reduce storage costs. This process should involve a thorough analysis of usage patterns and lead times to ensure the new levels still provide adequate protection against stockouts.
By focusing on these proven methods, businesses can significantly reduce slow-moving MRO inventory, streamline operations, and reduce unnecessary holding costs. These strategies are practical and rooted in solid inventory management principles, ensuring a leaner, more efficient approach to MRO stock management.
