How Lack Of Visibility Leads To Lost And Misplaced Inventory

It was a Tuesday morning at the Acme Manufacturing plant when, suddenly, alarm bells began ringing on the shop floor. A critical hydraulic press used for metal stamping failed unexpectedly, and the production ground stopped.

The maintenance team scrambled, quickly diagnosing the problem as a failed hydraulic pump needing replacement. But as the technicians searched inventory for the spare part, they came up empty-handed.

The $15,000 pump was nowhere to be found. Calls to the purchasing manager revealed no recent orders had been placed for a replacement.

After over an hour of fruitless searching, the pump had vanished without a trace. With no time to wait for a new one to be shipped, management made the tough call to sideline the press for over a week until a replacement pump could be secured.

Situations like this are all too everyday for companies relying on manual tracking methods and limited visibility into MRO (maintenance, repair, and operations) inventories.

While dramatic, the case of the missing hydraulic pump illustrates the cascading problems caused by a lack of accurate inventory data and poor visibility into critical maintenance parts.

Read on as we explore the pitfalls of tracking MRO items manually, the consequences this lack of visibility creates for asset downtime and costs, and the solutions modern tracking tools can provide.

Challenges Of Manual MRO Inventory Tracking

For many facilities, managing spare parts, tools, and other MRO items remains anchored in the past, relying on manual techniques like pen and paper logs, spreadsheet tracking, periodic stock checks, and eyeball estimates.

While these methods may have sufficed decades ago, today’s fast-paced industrial environment demands greater accuracy, visibility, and accessibility of inventory data. Manual approaches simply can’t cut it to avoid stockouts, control costs, and ensure assets remain up and running.

Difficulty Maintaining Accurate Counts

Under a manual tracking system, there are no safeguards to ensure inventory counts reflect reality. When parts move between central storerooms and shop floors or get borrowed for jobs, paperwork and spreadsheet records easily fall out of sync with what’s physically on hand.

Staff must diligently record each transaction or minor discrepancies quickly snowball into significant inaccuracies. With parts constantly shifting around the facility, keeping counts current and accurate down to the individual SKU level is virtually impossible.

No Visibility into “Hoarding” Behavior

Limited visibility also enables counterproductive hoarding behaviors. Maintenance techs determining if a needed part will be available when they require it are incentivized to squirrel away items for themselves.

Staff may fail to report borrowed items or “lose” them into unofficial personal stashes. While understandable from the individual’s perspective, this collectively undermines the overall availability of shared inventory.

There’s no easy way to detect or discourage hoarding when you lack insight into how, where, and by whom parts are being used.

Lack of Status Info On Condition and Availability

Manual tracking also provides minimal information on the availability and state of spare parts. Is that bearing still in the storeroom or did another team borrow it? Has that electric motor been sent out for repairs or condemned?

Staff often need to be reminded of the answers to these critical questions, operating on outdated assumptions rather than current data. Uncertainty encourages overordering and exacerbates the problems of hoarding and duplicate parts in circulation.

Increased Risk of Misplacement, Damage and Loss

With parts spread across decentralized storerooms and shop areas and no accountability system, inventory is inevitably misplaced, damaged, or lost entirely over time.

More extensive facilities can quickly accumulate hundreds of thousands or even millions of dollars worth of MRO items distributed across the premises.

Loss rates historically reach up to 15% annually without diligent monitoring and coordination. Parts disappear into black holes, only noticed when suddenly needed for a breakdown.

Consequences Of Poor MRO Inventory Visibility

The adverse ripple effects from lack of inventory visibility manifest in a host of ways that impact operations and the bottom line:

Unplanned Downtime from Inability to Locate Parts

Nothing disrupts production like urgent equipment failures. But instead of quick repairs, lack of inventory visibility turns breakdowns into protracted downtime events.

Techs waste precious minutes trying to hunt down parts, only to come up empty-handed. With no backup available, crews must expedite ordering and wait days or weeks, incurring lengthy downtime. This idle time kills OEE metrics and throughput, eating into revenue and capacity.

Suboptimal Maintenance and “Make Do” Repairs

When the right MRO parts can’t be located, crews often resort to less optimal repairs to get the equipment running again. Rather than replacing a worn bearing, they’ll pack it with grease as a temporary fix.

Instead of a new solenoid, they’ll clean and recalibrate the sticking old one. While this workaround mentality is understandable, it leads to more frequent breakdowns and degraded performance. Asset health and lifespan deteriorate as proper maintenance gets deferred.

Higher Costs from Emergency Purchases and Expedited Freight

Lack of visibility also drives up expenses through last-minute purchases at premium prices. With no visibility into existing inventory, staff redundantly order items already on hand yet to be discovered.

Expedited shipping costs eat into the budget as teams scramble to obtain emergency backup parts that should have been caught proactively. Poor planning fueled by poor data carries a hefty price tag.

Inability To Optimize Inventory Levels And Purchasing

Ordering and planning also suffer when there’s minimal usage of data to make informed decisions. Are we stocking too much or too little inventory?

Which parts see heavy demand versus one-time use? There’s only one way to optimize stock levels or purchasing patterns with accurate visibility into how and when items get used. Teams default to guesswork, risking bloated supplies or inadequate stocks.

The Benefits of MRO Inventory Visibility

Luckily, today’s technologies make complete inventory transparency attainable. Modern tracking solutions like barcoding, RFID tags, and asset management software enable real-time visibility, maximizing warehouse MRO inventory effectiveness.

The payoffs touch everything from operational uptime to procurement costs when MRO inventories finally emerge from the shadows.

Real-Time Tracking of Inventory Movement

Barcode scanning, RFID tags, and other options like on-shelf cameras provide concrete visibility into the status of parts.

Items can be logged in real-time as they enter or leave the warehouse storage or get assigned to technicians and assets for jobs.

This creates a chain of custody and accountability for inventory. Suddenly, there are no more questions about where any part resides at a given moment or who had it last.

Insights into True Usage Patterns and Inventory Turns

It’s only possible to optimize inventory levels by understanding utilization rates. With real-time tracking, usage patterns become visible rather than guessed at.

Data reveals which parts experience frequent turnover versus one-time use. Are certain items used up faster than anticipated? Are others collecting dust on the warehouse shelf?

This visibility enables a more brilliant balancing of stock levels and purchasing to align with actual demand.

Identification of Excess and Obsolete Items

Inventory tracking also highlights accumulated surplus and obsolete parts that may languish unseen on warehouse back shelves.

Item-level visibility flags these assets, tying up a budget as excess inventory. Teams can then make data-driven decisions on redeploying reusable items and properly disposing of the rest.

Tightening Control Over Inventory Volumes and Purchasing

Comprehensive visibility provides the foundation for improving procurement processes. Purchasing can align orders with actual demand instead of estimations.

Managers can track and compare planned versus actual usage and turn historical data into enhanced forecasting. By identifying redundantly ordered items, purchasing can eliminate duplicate parts being circulated and procured.

Optimizing Maintenance and Repairs

Ultimately, reliable access to inventory translates into more uptime and equipment availability. Maintenance teams spend less time scavenging for parts and more time on asset care.

Better availability of the right parts means fewer crises, makeshift repairs, and higher-quality upkeep. Smoother repairs translate into more operational productivity and a better bottom line.

Conclusion

In today’s competitive environment, manufacturers can’t afford the unnecessary risks and costs imposed by a lack of MRO inventory visibility.

The consequences of misplaced parts, subpar maintenance repairs, excess stocks, and emergency purchases add up quickly.

But by embracing modern tracking technology, managers can finally lift the fog surrounding their indirect supplies and materials.

Comprehensive visibility leads to smoother maintenance, control costs, and minimized crises when parts go missing. As the Acme Manufacturing plant learned the hard way, your MRO items are too critical to be left hiding in the shadows.

By shedding light across all your processes with inventory tracking tools, you can transform availability, maintenance, and the total cost of ownership for these assets. The time is now to finally put an end to the costly game of hide and seek plaguing your facility.

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