Another example of how developing and deploying Work Control Tools can lead to real bottom line savings can be seen in the area of MRO/Stores optimization.  

·          It will cost an organization approximately $3-5 per SKU to reclassify their stores records, so that they can be easily identified and so that redundancy and spoilage can be removed from the system.  

·          A small storeroom will have approximately 5,000 SKU’s to be reclassified and will be valued at approximately $1,000,000.  

·          This reclassification work  can be done at a cost of $15,000 - $25,000.  This work will result in average Inventory reduction of 20-30% or a one time savings of $200,000-$300,000.  

·          Not to mention that since inventory has an annual carrying cost of 25-35%, if maintained, this one time reduction will result in annual carrying cost reductions of $50,000 - $105,000.  

Another area of savings in this equation is that a well managed/defined inventory can result in a minimum 1 hour per day increase in craft productivity.  Clearly just creating the parts descriptions doesn’t get you this, you also have to invest additional funds in developing parts lists or bills of materials (BOMs) as well as training on how to effectively search for parts.  

·          On average 5,000 SKU’s in inventory can support approximately 2,650 Assets, based on an estimated duplication factor, BOMs can be developed for approximately $85,000-$90,000.

·          Assuming that this $1,000,000 worth of inventory is supporting 25 crafts, 1 hour a day at $34 per hour = $195,500 annually or could free up 2.76 people to do other work!