· Poor specifications on file: The current system is not updated to give the proper information on the part required leading to excessive time spent searching for this information

· Cumbersome approvals process: When work is approved in many instances it requires another approval to purchase the materials for the job

· Poor receiving practices: Parts and materials are received without a reference to a work order and are “lost” on the receiving dock.

· Poor notification procedure: Materials are received but poor communications between maintenance and purchasing introduces delays in applying the materials to the job.

Any of these will lead to less then optimum response of the materials procurement process causing undue delays in getting the job done. Warehouse provided materials introduces a more complex set of problems.

Facility warehouses generally are poorly run. Most managers responsible for this function have forgotten that they are serving two masters. They must provide a good return on the investment in this asset, and they must provide good service levels for the maintenance department. The key process measurements that gauge the effectiveness of both are:

· Annual Inventory Turns: Total annual issues from inventory divided by average annual inventory value. This number should be between 3.0 and 3.5 turns per year. We usually find inventories turning at less then 0.7 turns.

· Service Level: number of items issued divided by number of items requested. A service level of 97% is a good target. Eighty to ninety percent is the range we find.

So why are these values so low? Many factors the most common problems are one or more of the following:

· There are no measuring systems to gauge the performance. The measure we most commonly see is inventory value.

· There is no plan in place to improve inventory performance, as it is not viewed as a contributor to poor maintenance efficiency, but rather a cost problem.

· Obsolete parts are seldom purged from the inventory. This clutters the warehouse compounding space allocation problems for good parts.

· Stock levels are out of line with demand. We find many cases of multi-year quantities in the bins.

· The CMMS (if in place) has not been updated with the proper specifications for the parts or categorization of parts is complex making it difficult to find items.

· Cycle counting is not performed to match on hand records with on hand quantities.

· Max/min levels have not been adjusted since the parts were initially established.

· Security of the warehouse is poor. Items are removed without notification to those responsible for maintaining proper levels, driving down the service level.

· There is no rationale for establishing an item in the inventory.

· The reorder process is cumbersome and ineffective.

· The location of the facility has not been taken into account when the inventory was established. A warehouse for two identical facilities should vary greatly if one is located on Alaska’s north slope versus one just outside of Philadelphia’s metro area. Parts availability from local suppliers should significantly drive down the stocking requirements.

And the list goes on. The common theme of poor performing warehousing operations is complacency: it is not until we perform a “Day In The Life Study” and develop the indicator values are our clients fully aware of the impact poor materials management has on their internal productivity.

In this brief space it is difficult to get into much depth about this serious problem, so I’ve highlighted the major themes. Please contact me at SAMI if you would like to discuss this further. As for me, I’m heading out to the garage to continue my search…