How Effective Are Your Stores?
Jane Alexander | May 16, 2014
Storeroom data integrity and state-of-the-art organizing strategies are major contributors to improved maintenance and reliability.
By Jane Alexander, Deputy Editor
Stop by your storeroom and try to find a part you can’t match to any piece of equipment in your plant. It should be easy. Your storeroom, like those in countless other organizations, probably has a box, bin or even shelves full of parts that are kept on hand “just in case.” The trouble is, no one knows where those parts go or how they are to be used.
But even stores with sophisticated database software have problems, says James Rogers, Unit Director of Maintenance & Reliability Services for MRO Supplier Storeroom Solutions, Inc., Wayne, PA. He points to a site that continued to inventory an unidentifiable bearing stamped with 1956 as the year it was manufactured. What, he asks, are the chances the original machine to which this bearing belongs is still operating in that plant?
Years of “thinking lean,” Rogers laments, have led many manufacturers to install systems offering visibility to the flow of direct production parts from suppliers to the assembly line. “Very few, however, have had the same discipline or success tracking indirect inventory or maintenance, repair and operations (MRO) data on all the bearings, belts, motors, cleaning supplies, gloves or hair nets required to keep the production line going.”
For storerooms to be effective, the maintenance department must trust them. To earn that trust, Rogers says, MRO data must have integrity—i.e., reflect a disciplined process that ensures accuracy and consistency of data. “Data integrity,” he insists, “is the foundation that lets stores operations contribute to maintenance-program performance.”
If you can’t be sure about finding the right parts at the right time, “You’re putting planned-maintenance compliance and, perhaps, the performance of the whole plant at risk,” warns Rogers. It’s that risk that compels many maintenance technicians to keep their own unofficial—and potentially unauthorized—stores.
To determine if your organization has a problem, Rogers suggests tracking the following metrics:
- Number of planned maintenance projects delayed by missing supplies (parts, lubricants and other consumable items needed for the work)
- Percent of maintenance time devoted to identifying required supplies for each job and delivering them ready to install at the job site
- Amount of time maintenance personnel spend planning what may be required for planned work, ordering parts, checking availability and assembling supplies themselves.
Rogers says it is possible to manage maintenance supplies with the same discipline companies use to manage direct materials. For any needed MRO supply, an organization should be able to buy it, receive it, put it away, find it and issue it. Establishing data integrity of a storeroom database, though, takes more than simply installing software (see sidebar below).
Real-world storeroom success
Roofing-products manufacturer Johns Manville (JM) recently implemented a storeroom overhaul with the help of a team from Rockwell Automation. JM, which runs a variety of equipment systems in 45 manufacturing facilities across North America, Europe and China, uses hundreds, sometimes thousands of parts that must be efficiently stored in accessible locations. When David McGeachy became Plant Maintenance Manager at JM’s Etowah, TN, facility in fall 2011, he did not fully grasp the size of that task. McGeachy soon realized, however, that a user-friendly storeroom would give the site a better understanding of what it had on the shelves. Although the existing storeroom once worked well, it was past due for a change.
“We only had a rough idea of what was actually in the storeroom,” says McGeachy, “and we suffered a lot of setbacks in productivity because of it.” When machines shut down for maintenance or repairs, personnel would spend hours sifting through open bins for the correct parts. Sometimes, a needed item would be ordered only to have personnel later discover that it had been in inventory all along. Instead of focusing on maintenance tasks, McGeachy and his team were scouring the storeroom and prolonging downtime, not limiting it.
After months of frustration, McGeachy turned to Rockwell Automation, whose Reliability and Storeroom Services team had approached him with a proposal to overhaul the plant’s storeroom. The first step was to analyze the storeroom and the parts it housed. Through lead-time analysis, usage analysis, ABC analysis and a theoretical optimum-inventory analysis, the Rockwell Automation team determined the ideal amount of on-hand inventory, order frequency and quantity. This information allowed them to assess the requirements of the new storeroom and design the layout according to those requirements before making physical changes to the storeroom.
One of the bigger adjustments the Rockwell Automation team made involved switching from an open-bin to a closed-bin system. Instead of all parts sitting disorganized on open shelves, smaller ones would be stored into 55 high-capacity cabinets manufactured by Stanley Vidmar. Larger, more visible parts would remain on shelves or be moved to racks. The new cabinets not only protected parts from the harsh manufacturing environment, they allowed JM to better utilize its new SAP-ERP system. While SAP had been implemented 18 months earlier, it had not been used for finding and tracking parts. The move to a closed-bin system changed all that.
The project called for all parts to be removed from their current locations throughout the storeroom and arranged based on commodity type. To prevent this from hindering maintenance operations, two rows of parts were relocated and shelves were torn down to make room for a temporary staging area that didn’t interfere with the staff’s workload. The Rockwell Automation team then went through every part in the storeroom and put it in the appropriate place, making sure to document each location change. “It was like peeling back the layers of an onion,” says McGeachy. “The deeper they dove into the parts, the more they found.”
After about four months, all parts had been located, tagged and organized in cabinets, shelves and, in the case of the largest items, moved to racks in the back of the storeroom. A new system was created to store belts by hanging them on the walls. Upon completion, about 8000 parts were moved to new homes in two adjoining storerooms: One housed high-use parts that all plant personnel could access; the other housed higher-value parts accessible only by maintenance staff. Both storerooms feature an open, single-level design that makes for a cleaner, more accessible and navigable operation—much different than the former, cluttered, multilevel design.
The new storeroom design cut the part-storage footprint by 40% and simplified maintenance. More important, it reduced the time spent looking for parts, decreased the cost of duplicate purchase orders and lessened the downtime associated with both. In total, the new design helped eliminate 3000 excess and obsolete SKUs (stock-keeping units) and $1.3 million in inventory from the storeroom for future disposition.
After the success of the storeroom optimization project, the Rockwell Automation team embedded an asset-management professional (AMP) at the JM Etowah site for a year. The AMP assists in properly disposing of excess and obsolete inventory. He is also creating a repair program, processing all MRO repairs, implementing an MRO warranty-tracking program and bringing employees up to speed on the new storeroom processes.
Benefits go beyond maintenance and reliability
According to Storeroom Solutions’ Rogers, database improvements like the one at JM, can be expected to fuel cost benefits beyond maintenance and reliability. (Example: They can reduce inventory costs and express freight charges.) A high-performing system can also generate metrics that lead to real improvements in plant efficiency and lowering overhead. Key Performance Indicators (KPIs) that manufacturers might pull from their databases include:
- Inventory (aggregate cost)
- Inventory turns (how much is needed to maintain a steady state)
- Availability of critical spare parts
- Lead times needed to plan properly
- Fill rate levels needed to complete job requests
In short, any software migration or systems improvement must be carefully planned and staged. It’s not just a transition: It’s an extreme makeover that does more than change the operations of the storeroom. It can alter the operating culture of the plant. MT
Tips for Optimizing a Storeroom Database
Successful software migration requires a systematic approach, starting with a current-state assessment, says James Rogers, Unit Director of Maintenance & Reliability Services for MRO supplier Storeroom Solutions, Inc., Wayne, PA. Following are several tips he recommends for those considering a storeroom overhaul:
- Ask yourself: Is every item in the storeroom in your system? Is there a use for every part? Is every part identified with a unique number? Do you know where a part should be stored? Can you track a part through its life cycle?
- Update any databases used to manage MRO parts. Many times, information stored in the CMMS is static or minimally maintained.
- Educate management that investments made in storeroom management improve cost control, stabilize inventory and discourage excess purchasing of non-stock items and private caches.
- When upgrading a software system and/or improving operating procedures, treat it as a significant change. Apply the same tools and discipline you use when analyzing the production value stream.
- Before purchasing new software, bring stakeholders in and allow them to test-drive the proposed product and review procedures. Or use a group of “beta testers” to test procedures before implementing them plant-wide.
Editor’s note: James Rogers, who was quoted in this article, is no longer with Storeroom Solutions, Inc. (SSI).
Mike Dyson, SSI’s Chief Business Intelligence Officer, also helped in the preparation of this article. For more information, visit storeroomsolutions.com.