6 ways to save time and money in materials and spare part management, using your CMMS

25 May, 2021 by Add Energy

The computerized maintenance management system (CMMS) is a vital tool for achieving effective and efficient maintenance and materials management. Having good quality, accurate and structured master data linked to functional locations and maintainable items within the asset register enables maintenance and materials management to be cost-effective and highly productive. 

In this blog post, our team of experienced materials and spares management experts share top tips on how to get the most out of your CMMS to unlock efficiency gains…

1. Master your “part numbers” to get rid of unneeded spares and avoid overstocking

- Greg Milnes, Senior Materials Specialist AL_Photo_Greg_Milnes

“Overstocking can cost your company time and money. It’s important that you maintain an up to date equipment and spares data, as this will help projects run smoothly and reduce the risk of maintenance backlog. To mitigate risk of overstocking the same items it is critical for the manufacturer number to be the source of truth within the inventory management system, rather than the vendor/supplier part number. 

“In our experience of reviewing inventory data, it is common to find multiple part numbers for the same item. For example, we have seen cases of 6 different part numbers, derived from 6 different suppliers for the same item in the CMMS or inventory management system, which has caused duplication in stores and unnecessary spares being held. 

“On a recent review completed by our team, we found this issue of duplication resulted in over $10M worth of unnecessary parts being held in stores, and $6M of duplication items on order. 

“Small steps such as physically checking materials to identify a manufacturers part number rather than a vendor/supplier part number will mitigate the risk of duplication of the same item within the inventory system and will help: 

  • Trigger the negotiation for refunds or credit notes from suppliers, even if it is not a full refund, it will help towards future expenditure
  • The ability to cut warehouse costs by disposing of materials that are not required after the project has finished will reduce the warehouse footprint and save on storage cost, especially if the stock is stored in rented facilities. ‘If you don't need it - don’t stock it’
  • Sell off stock for any materials that are not required in future due to possible equipment change-out can be put out on the market for sale to other companies in the field of business. Items identified as obsolete could also be sold as a potential scrap value”

2. Accurate and reliable equipment BoMs 

- Chris Batty, Materials ConsultantChristopher Batty1

“Creating and maintaining the CMMS equipment bill of materials (eBoMs) is vital. Without a complete and accurate BoM, any decisions made regarding material planning and replenishment could be made in a void

“By keeping an accurate eBoMs, companies can benefit from: 

  • Fewer mistakes being made when purchasing material
  • Faster execution of both planned and unplanned work 
  • The ability to easily determine if non-moving stock is required for an active asset
  • A reduction in excess inventory which often leads to unnecessary costs and expensive downtime
  • The ability to identify similar items or equipment where individual materials can be standardized or substituted.

“Below is an overview of the minimum requirements for ensuring an accurate BoM to maximize efficiency: 

  1. Accurate Asset/Equipment register – this is essential to building the correct BoM for the correct equipment

  2. The BoM components should have the following information, as a minimum 
    • Part Number
    • Part Name (Short Description)
    • Description (Long Description –  technical details)
    • Quantity
    • Unit of Measure

“My top tip: It is key to set good data standards when implementing BoM’s into the CMMS, try to think of the BoM as a blueprint to your Equipment and Asset allowing you to unlock the full potential of accurate BoM’s and move away from treating a BoM as a Materials shopping list only.”

3. Maintaining master data accuracy and quality 

- Paul Mitchell, Materials Specialist AL_Photo_Paul_Mitchell-1

“The CMMS should be a reliable source of information for its users. By having a complete and accurate BoM within the CMMS, you can be proactive rather than reactive to the equipment strategy for both their corrective and planned maintenance activities. 

“Any changes or updates to the equipment should be managed through a proper Management of Change (MoC) process so that the change is recorded within the CMMS to ensure that everyone has access to the same, accurate information.

“My advice for ensuring this is done effectively includes: 

  1. A proper Management of Change (MoC) should follow and meet a strict criteria that adheres to a process which is documented and approved
  2. The process for a MoC should be executed by people of the correct Technical Authority (e.g. Supply Chain Management, Engineering, Data Stewards etc.)

“Some advantages of investing time and effort into this exercise includes:

  • You will save money by having access to accurate information to order the correct parts  
  • Time and cost efficiencies in planning will be unlocked because the planners will have access to the right information required to plan maintenance, available at their fingertips, instead of trawling through historical data 
  • Minimize equipment outage time and avoid incurring maintenance backlog by having a reliable list of spares for both corrective and planned maintenance”

4. Ensure use of the ‘construction type’ capability to cascade change effectively 

- Iain Wood, Materials ManagerAL_photo_Iain_Wood

“Using the “construction type” capability within the CMMS will allow a construction type number to be assigned to a unique piece of equipment. 

“Making changes or adding parts to a unique piece of equipment at the construction type level will amend all of the bill of materials associated with that construction type, rather than going into each functional location and making the amendments there. This will save you time and assure the change is standardized and consistent.” 

5. Assign maintenance work orders to spare parts in your warehouse

- Nicky Owers, Senior Materials Specialist (Contractor)AL_Photo_Nicholas_Owers

“Effective materials and equipment preservation will ensure that materials and equipment are fit for purpose when they need to be used. By investing resources into this activity, plant owners can benefit from: 

  • Assurance that the parts in stock are safe for use and minimizing the likelihood of an incident occurring, to do this effectively, I would recommend: 
    • Creating a register for the likes of perishable goods with manufacturer lifetime date and ensuring they are kept in a suitable environment
    • Ensuring regular preservation is carried out on spares which will be stored for long periods of time
    • For rotating equipment, checks should be carried out by support engineers to ensure normal rotating function

  • Having confidence that new and repaired items will function on demand, minimizing the requirement to re-order parts at late notice, which will result in saving time and money. To achieve this effectively, I would recommend that engineering/maintenance personnel should carry out QA on materials and documentation upon receipt into warehouse to ensure they meet specification
  • Complying with warranty requirements by maintaining items to a high standard, (e.g. ensuring OEM maintenance strategies are adhered to during equipment lifetime) to provide companies with the option to sell equipment, should this be required in the future  

6. Utilize an accurate minimum / maximum stock level setting system

- Eamon Morgan, Senior Materials Specialist Eamon Morgan

Setting minimum and maximum stock levels in your CMMS can help assure you always have immediate access to critical parts, high consumption equipment or items with long lead times, as well as providing the means to control the risk of overstocking and wasted expenditure.

The philosophy behind this approach means that when the stock level drops below its “min” value, this will trigger a requirement to reorder, and on the flip side, having the “max” value defined will allow stock to be replenished to a set value, and no more. 

“Benefits of this approach include: 

  • Reduced levels of unnecessary or obsolete stock, therefore cutting costs 
  • Safety stock levels can be maintained by calculating average / maximum daily use against vendor lead time
  • Peace of mind, knowing that you always have the correct stock on hand for when it's needed
  • The ability for levels to be set against certain criteria, e.g. storage capacity or environmental conditions, providing the ability to analyze slow-moving items and adjust minimum/maximum levels accordingly

To achieve this effectively, it is vital that the CMMS has an accurate and up to date Equipment BoM for each “Functional Location” in order for the CMMS to deliver to its full capability and prevent unnecessary downtime and costly delays in production.   

How Add Energy can help you cut costs and unlock efficiencies in your inventory management processes and data: 

At Add Energy, we utilize our award-winning software and highly experienced experts to unlock efficiencies in inventory management processes to safeguard business integrity and minimize operational expenditure.

Learn More About Our Inventory Management Solutions

Topics: Maintenance Optimization, Inventory, Procurement and Logistics Optimization, Master Data Build and Optimization, Asset Management

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