How to Reach an Optimum Inventory Balance Thanks to Real-Time Forecast
Imagine if, at the start of every year, all the data regarding all spare parts required to optimize inventory balance, without affecting the maintenance schedule, is readily available. Over the years, this has always been an internal conflict between two departments within an organization: Purchasing and Maintenance.
How to reach an optimum inventory balance with predictive asset management and preventive maintenance?
On one hand, to reduce inventory cost, the purchasing department’s strategy is to keep only the necessary inventory. On the other hand, the maintenance department would like to keep all spare parts ready for dispatch at any time to execute their maintenance. If all inventory is available 100% of the time, the fulfillment rate of the preventive maintenance is always 100% and there would be no work delays due to the lack of inventory.
To bridge the conflicting interests of two departments and to achieve the optimum inventory balance, it is necessary to work as a team. As a result, the purchasing department can meet the needs of its main internal customer (Maintenance) without affecting its financial aims and the maintenance department can meet the needs of its main internal customer (Operations) increasing availability and reliability reducing the failure probability of all assets.
The Purchasing Department Role
To achieve inventory optimization, the purchasing department needs to develop the following:
Spare Parts Prioritization Policy
Purchasing department must develop a classification of the critical spare parts by evaluating:
Business Impact: the operational spare parts critically in the view of the revenue generation
High Cost: a spare part acquisition cost
Acquisition Complexity: how difficult it is to purchase a spare part at a reasonable price, through an authorized pool of vendors
Define Lead Time, Safety Stock, and Economic Order Quantity
Having up to date lead time for each of a spare part will provide a clear information how much time is needed to fulfill customer’s order and enable creation of the purchasing plan based on the future needs. Furthermore, the purchasing department must have a knowledge and experience as how to establish Safety Stocks and Economic Order Quantities for any given spare parts.
Define Purchasing Contracts
Conducting an analysis and evaluation of the most qualified suppliers/vendors, to get the optimum agreement in terms of price, quality and lead time.
The Maintenance Department Role
In conjunction, the maintenance department also needs to develop the following:
Build/Improve a Predictive Asset Management strategy
To build or improve your predictive asset management strategy it is necessary to first collect any important data about measurement points, condition monitoring and failure events.
With this information, the maintenance department can begin to develop a Root Cause Analysis in order to discover potential patterns. This is done through a deep analysis of collected maintenance records.
Once the Root Cause Analysis is done, there is now a base that allows for the creation of an appropriate statistical model to discover maintenance events probabilities.
At this point, the information can be used to plan for upcoming maintenance activities and for advance preparation. Also, it is important to say that this is a never-ending cycle that needs to be reviewed constantly.
Build/Improve Maintenance Plan
To define and make improvements in the maintenance plan, it is necessary to establish periodic reviews to the asset performance by taken in to consideration failure records, analyzing the asset status and the stage of its life- cycle.
These are then used to determine specialized maintenance activities that need to be included in the maintenance plan. Another way to get important input to update the maintenance plan is through inspections, these are useful to discover the status of several components (wear, break, damage, to be replaced, etc.) so that it can be included in the maintenance plan with a frequency based on time, meters or condition.
Along with the above mentioned, it is necessary to gather meter readings and dates for the executed maintenance based on time, meter or condition.
Simple, isn’t it? Before the implementation of any technology, it is necessary for a company to first standardize any internal processes and then find an appropriate technological solution to support and improve it.
Real-Time forecast in Maximo: achieving the perfect balance between Purchasing and Maintenance
Maximo through its Forecast function located in the Preventive Maintenance module offers the possibility to forecast all upcoming maintenance activities for every asset within estimated dates. This information is useful to solve any conflict between Purchasing and Maintenance needs because it is the input for elaborating the Purchasing Plan.
This solution works with all preventive activities based on days, meters or condition (Predictive Asset Management) that have been associated with the asset. Also, Maximo has the ability to take all spare parts included in those preventive and predictive activities and list them in a report with a specific forecast date. It is important to mention that for Predictive Maintenance, Maximo offers the Condition Monitoring Application for registering all data related to it.
By notifying the departments in advance, what spare parts are required in the Preventive and Predictive Maintenance Plan (for a specific period), the Purchasing department is able to prepare its purchasing plan, to meet the needs of the Maintenance department and to achieve optimum inventory cost.
What are the benefits of using the Forecast in Maximo?
Obtain optimum inventory balance;
Reduce unnecessary inventory cost;
Increase the company’s bargain power;
Obtain better prices for spare parts;
Strengthen relationships with vendors;
Simplify purchasing process;
Increase assets lifecycle;
Reduce asset failures;
Promote the Predictive Asset Management approach;
Keep the maintenance plan updated;
Reduce delays in the maintenance schedule.
In conclusion, any company that wants to be successful in the implementation of such a great solution as Maximo and its forecast functionality, must have their Purchasing and Maintenance department work as a team and together define the internal processes.
If you have questions about the Forecast in Maximo, the predictive asset management or the preventive maintenance, don’t hesitate to contact our experts!
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