What metrics should I be tracking for my maintenance inventory?
The following KPIs should help you get a good idea of how efficient your inventory management is, as well as where you might need improvement:
- MRO spending (ideally below 10% of your procurement budget)
- Unaccounted spending
- Inventory turnover (i.e. how quickly you go through stuff)
- Inventory value
- Stock-out occurrences (should be below 2% of inventory requests)
- Inventory adjustments
- Kit accuracy for maintenance tasks (make sure technicians always have what they need for scheduled tasks)
- PM schedule compliance (and work order time tracking – do you complete work orders efficiently and on time?)
- Value of receipt and issue transactions each day
- Excess inventory
- Obsolete inventory
Ultimately, you want to streamline spending while also meeting your maintenance and operation requirements in order to get the most out of your MRO inventory.
How to track MRO inventory metrics
Now, how do you track all these different metrics? One way is with a CMMS. Some systems let you track the number of items you have in stock, how often they’re used, what they cost, and so forth. In addition, you can monitor schedule compliance by tracking preventive maintenance work orders.
Depending on the scope of your software, you may have to handle some of these metrics separately. For example, while you might log specific numbers and values of items into your CMMS, you might need to track stock-outs, cycle count adjustments, and unaccounted spending elsewhere.
How to use inventory KPIs
As you track the data from your inventory, you’ll be able to analyze it to find where your inventory management is falling short.
As a quick example, suppose your schedule compliance is low while your stock-outs and turnover are high. Other metrics seem to be fairly standard. Here, the reason for your low schedule compliance is likely because your technicians aren’t able to complete work due to parts being out of stock.
You’d solve this problem by checking which items tend to run out and setting minimums for replenishment. With many types of software, you can set alerts for when your stock drops below a certain level, allowing you to restock before you completely run out.
Of course, this is just one example. The underlying idea that you can apply across different cases is to make sure you’re staying on top of your facility’s needs, while handling inventory in an efficient manner.