SPC Results Inc.

Problems from Weak MRO Material Identities

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by

Conrad Greer
in

Applying a structured material identification taxonomy makes your MRO materials comparable so they can be usefully unique.  SPC Results developed the SMI taxonomy for this purpose. Here are the problems continuing with ad hoc material identification leaves your business to grapple with.

Weak MRO material identities cause losses in these areas:

Operations Level

  1. Increased risk of life and environmental impacting production upsets from installing incorrect materials

SCM

  1. Increased demand for “free text purchase requisitions”. Users can not requisition what they can’t find, can’t be certain is right. They use the more labour intensive (at every process step) method to order their parts instead
  2. Free text purchases are the root of off book local stocks (squirrel piles) This can be very expensive and ongoing
  3. Multiple warehouse stocks of items that are in fact the same real-world item
  4. Confusing over-the-counter searches in the warehouse
  5. Warehouse work associated with restocking returns
  6. Work to return wrong materials to Suppliers
  7. Work to physically examine items at the bin to determine suitability (often with maintenance)
  8. Wasted MRP parameter maintenance for items that are the same real item but with multiple material masters
  9. Waste and confusion in local contract management for sourcing multiple items that are the same item
  10. Waste and confusion added into strategic sourcing process because the MRO catalogue creation only attempted unique items at the plant level

Maintenance

  1. Confusing material searches in WO planning
  2. Extra validations used in WO planning
  3. Work scheduling delays when planned parts are out of stock, but are available under a different number in the warehouse
  4. Job schedule interruptions from mis-identified materials
  5. Production loss from wrong parts issued to a job (bigger impact than just work schedule impact)
  6. Work to return wrong materials to the warehouse from a job

Data Governance

  1. Unnecessary use of the material master administration process to create and validate material requests for items that could not be positively identified by search
  2. Significantly more challenging and costly effort to create maintenance BoMs
  3. In company merger projects, the MRO materials can not be effectively rationalised into the parent catalogue if you do not have a structured taxonomy that enables comparisons. The problems above will continue to impede success integrating the newly acquired company.

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