Avoiding MRO management pitfalls with MDM – 5
The first 4 installments of our Blog series addressed root-cause MRO management failures: Problems due to Workflows, Unconstrained access to MRO data, and the like. Let us look at some common obstacles that must be navigated due to perceived exigencies of business.
- Rush MRO Orders – When a part is needed right away and cannot be found in inventory, a rush order is the go-to quick fix. This quick fix generates a few problems, for example:
- a rush order gets created which subverts standard procurement procedures such as buying from Approved/ Preferred supplier lists, competitive bidding, or protracted searching to find acceptable alternatives to typically expensive OEM aftermarket parts.
- Rush orders also lead to product price and expedited-freight premiums, and preferred, low-cost, easily tracked transaction methods may be bypassed in favor of speed.
- MRO Safety Stockpiles – Once bitten, twice shy. Material managers often build up excess inventory on purpose to provide a buffer of on-hand inventory for critical spares.
- While failure to find a part in inventory may lead to an unnecessary order, it can also lead to unnecessary inventory. People tend to over-order to avoid risks related to parts shortage, leading to safety stockpiles.
- Such spares stock might stay in inventory for years, long after the equipment it serves has been replaced, dragging down MRO inventory turnrates and increasing excess inventory levels…
The best way to navigate these common obstacles is to increase the reliability of your MRO data. Your legacy data may need a robust solution (such as Verdantis Harmonize®) that normalizes, standardizes, and rationalizes your material master data while new part request data should pass through a data governance layer (such as Verdantis Integrity®) that will ensure its reliability from day 1.
The forthcoming blog posts will talk about other process pitfalls in MRO management and highlight scenarios that show impact in real dollars.
Further Reading -
Latest posts by Arthur Raguette (see all)
- The need for effective Material Master Data Management – Part 2 - January 16, 2018
- The need for effective Material Master Data Management - January 4, 2018
- Material Master Data Governance Teams - December 26, 2017