Maintenance, Repair and Operating Materials (MROM) management…everyone has heard about it but few have really come to recognise the opportunities for development and the benefits available to the business.
Businesses with high regulatory oversight such as pharmaceuticals have to show that they have MROM management developed to the extent that control of replacement items throughout their life can be comprehensively monitored by the controlling authorities.
How to improve opportunities to control inventory costs
Opportunities to have control of inventory costs, improved equipment performance and less working capital cannot be ignored. Typically, in a company with around £1million under MROM management, adopting current best practices can look to reducing expenditure by £2-300,000 per annum!
How to adopt current best practices
In the world of Asset Management and the welcome new era of ISO 55000, it is the humble engineering stores that are undergoing the most dramatic change. From chalk to cheese, you might say, from engineering stores to MROM management in 20 years, and what a difference!
Until the 1990s, the typical engineering store was a mysterious world that was completely ignored and certainly not understood by most managers.
New facilities had been and continue to be built without any allowance for a properly planned engineering store which, more often than not, was provided as an afterthought and located in any (usually inconvenient) spare space.
Inevitably the engineering store was ‘guarded’ by a traditional storeman typically sporting a cap and warehouse coat. But, as many apprentices were to discover, he could be your friend (if he liked you) or your worst enemy by providing any amount of unchallengeable reasons why the item you wanted was not available.
Without any sort of system, control was, at best, a manual paper trail method often created by the storeman whose self-preservation seemed assured when he demonstrate he remembered what and where things were. No one else knew the system: no one really cared.
Then it all started to change
- Engineering stores were offered electronic systems as an add-on to the growing interest in Computerised Maintenance Management Systems (CMMS)
- Supply Chain Management (SCM) principles and techniques shone a light on the possible ways to optimise inventory (this came from advances in technology and data handling, enabling data to be extracted, this along with a need to be more cost efficient, more cost efficient use of plant, capital, labour – optimising cost and efficiency)
- Businesses became concerned about the level and turnover rate for spare parts inventory – rise in risk-based maintenance, particularly within airline, electronics and automotive industries meant increased drive for quality, safety and yield, more regulations (MCP has found using information from AMIS Assessments that unmanaged situations could lead to up to 4 times the annual usage).
- Companies were able to check their relative position on a journey toward adopting world class practices for maintenance management (including engineering stores) using techniques such as MCPs Asset Maintenance Improvement System (AMIS).
- The realisation that spares and operating supplies account for between 10% of turnover(for facilities maintenance and lower maintenance cost environments) and 30% of turnover for complex and expensive equipment manufacturing environments) as shown from MCP work conducting AMIS Assessments. Here were the areas for potential cost reduction.
With stores and supplies now under the microscope, another opportunity for savings appeared. Because of the lack of internal understanding of storeroom operation businesses turned to the great white hope of outsourcing as a quick and convenient route to plug the gap and gain savings. However, the result for those who leapt into the void was often not the promised controls and savings.
MCP noticed that, historically, the best engineering stores and companies developing an MROM approach were usually internally managed and only now, as the understanding of MROM management gains traction among businesses that outsourcing opportunities may really become viable.
And so, at last, in the 2010s businesses that wish to be considered competent (meeting ISO requirements) and/or world class (meeting AMIS requirements) recognise the value from successful MROM as a vital part of the total approach to Asset Management.
At a high level, MROM can be considered as a system with eight elements ( A – H in the list below) involving 4 main functions (interacting as shown in diagram 1).
A Creating an MROM Item
B Purchasing, Receiving & Inspection
C Stock Management
D Requesting and Issuing
F Analysis & KPIs
G Cost Management
H Interacting Systems
Across the whole spectrum of businesses, there is now a recognised need for MROM management. Rising regulatory compliance demands evidence of correct behaviour and a rigid adherence to identified processes. MCP’s experience with clients suggests that there is a need for between 23 and 35 clear (interactions) processes across the 8 elements above.
Those who manage MROM in the future will not be the cap and warehouse coat brigade. A new enlightened approach to managing this part of the business demands a competency and career path that will attract the best future managers. They will be team players that interact across functional boundaries including engineering, purchasing, operations quality, finance and suppliers as a minimum. Competency with systems is essential. Providing a transparent and valued service will be expected.