Boosting predictive maintenance with inventory management

Efficient inventory management is one of the critical concerns of a company’s production and maintenance process. However, with properly selected and implemented management methods, it is possible to increase productivity and reduce operating costs significantly. Find out how intelligent inventory management supports predictive maintenance.

What is predictive maintenance, and how does it work?

Predictive maintenance is a concept of organising maintenance which is increasingly replacing preventive and reactive (run to failure) methods. Both involve responding only when a failure or activity occurs according to a predetermined maintenance schedule.

On the other hand, predictive maintenance comes from implementing maintenance activities tailored to the machines’ current and ongoing needs. The critical assumption of this concept is the elimination of breakdowns, the optimum organisation of the maintenance services and the continuous monitoring of the technical condition of the machines. As a result, predictive maintenance is currently the most modern and advanced method of optimising machine operation used by leading manufacturers worldwide.

Fundamentals of inventory management in the context of predictive maintenance

For predictive maintenance to be maximised, its assumptions must be implemented throughout the value chain, especially at the inventory management stage. Therefore, it is essential that the maintenance service teams not only have a clear vision of the parts inventory but also take an active part in its continuous monitoring.

Parts inventory management should not be considered in creating simple lists of spare parts, consumables or tools needed for maintenance. Instead, inventory management is much more complex and is primarily about maintaining the availability of all the products necessary to continue maintenance and production as efficiently and effectively as possible for the company.

Incorrect management of parts inventory generates additional costs

Mismanagement of the parts inventory can lead not only to wasting the operating budget but also to temporary or permanent stock shortages, with unforeseen production downtime, resulting in value chain disruption, delays in the delivery of products to end customers and reputation damage to the company.

On the other hand, excess stock in the inventory generates excessive maintenance costs and increases the risk of obsolescence of stored products, representing an additional burden on storage costs.

How to improve inventory management?

According to an Emerson research report published in 2018, maintenance services can spend as little as 25% of their working time searching for spare parts and other consumables and tools needed to maintain and support production machinery.

As can be seen, maintaining a high availability of parts, tools, and materials is key to maintaining a well-functioning inventory and, consequently, efficient maintenance. There are at least two fundamental aspects to improve inventory management significantly.

Prioritisation of critical parts

One of the most important things to look at when optimising parts inventory management is to create a transparent inventory of the critical parts needed to maintain production. These parts must be easily accessible, and maintenance services must have easy access.

To achieve this, creating and implementing a classification and coding system that is unified within the maintenance service and the other company departments responsible for processes linked to production processes is necessary. One common practice is the ABC method, which ranks parts, materials and tools according to their consumption value, i.e. importance and profitability.

‘A’ products are critical products of strategic importance, ‘B’ products are less important, and ‘C’ products are tertiary. According to Pareto’s law, as much as 80% of the total consumption value is based on just 20% of parts, materials and tools.

Once the parts have been listed and coded according to the ABC method, it is advisable to additionally draw up their descriptions, add annexes in the form of technical documentation, and merge all this information in the functional CMMS.

Monitoring of inventory movements

The development of a codification system and CMMS and ERP systems allow manufacturing companies to monitor inventory movements efficiently and accurately.

With access to transparently presented information related to current product stocks within the parts warehouse, it is much easier and more accurate to forecast maintenance data, plan replenishments, estimate assessments of the evolution of demand for each component and adjust the frequency of parts orders.

If stock details are entered in real-time within the CMMS, maintenance services and managers can see the level of specific stocks at any time.

Inventory management from the beginning to the end of the value chain

For the past few years, we have seen an increasing transformation of manufacturing companies to circular ecosystems in the context of Industry 4.0. In addition, IoT solutions, automation, and the sharing and co-movement of information between employees, machines, and IT infrastructure enhance collaboration across all subjects involved in each stage of the value chain.

This provides much greater efficiency, optimises costs and significantly increases the profits generated by the company. We wrote more about the concept of Industry 4.0 in this article.

With a functional and properly implemented CMMS, maintenance teams gain much greater flexibility, efficiency, and precision. What’s more, a modern CMMS – such as QRmaint’s CMMS – makes it easier to supply the warehouse and improve inventory management, as well as guaranteeing the ability to maintain a direct relationship with suppliers, creating a so-called ‘mobile work hub’ to support contact across manufacturers, suppliers and end customers involved in the value chain.