Data – Your MOST Valuable Indirect Asset

While you may feel like the machine spare parts, janitorial supplies, or chemicals you buy and stock are your most important MRO assets, the reality is they come second to your indirect material data!

Common even in 2016, many very large manufacturing organizations still utilize excel spreadsheets and frankly even note pads to manage their indirect storerooms and purchasing processes.  Even those that made the transition to the use of ERP systems in many cases continue to under-apply or even miss-apply those systems to the abnormal world of indirect material.

The reality is that your ability to accurately and effectively procure indirect material as well as properly manage it, disburse it, and continually improve your approach to it depends on the data your collecting and its accuracy.  Consider a couple scenarios and how they may apply to the organization you serve today:

  1.  Do you collect data using an ERP system however the quality of that data is very low making it almost useless?  As an example manufacturer part numbers are buried in descriptions instead of having their own database field where they are easily searched, categorized, and analyzed.  Do your maintenance teams as a result find it easier to visually “shop” your storeroom instead of searching the system for exactly what they need in seconds?
  2. How about manufacturer names?  Is a particular brand entered into the system multiple ways depending on who entered it?  As an example consider the fake company I’ll call Widget, LLC, makers of the famed widget.  Within any given data set we see, Associates allowed to enter data in an ERP system may have identified them as Widget LLC, Widget, Widget, Inc, or even miss-spelled their name as Widgit.  Unless you can identify these all as the same brand, your means to pull data and negotiate with Widget, LLC directly or with their distributor base is severely hampered.  Searching your system for a part made by Widget, llc might just mean you don’t believe you have it on hand when you really do.  In fact, you may have a lot of them and they have not been used in years because they are not found when you search the system.
  3. Still using that Excel spreadsheet to manage your storeroom?  Do you encounter Team Members who forget to leave a ticket or note indicating what they took from the crib and where they used it?  Unfortunately, unless you cycle count your whole storeroom every single day manually this means your inventory isn’t accurate and downtime will occur.  It also guarantees a lot of hours will regularly be expended chasing and expediting parts to get it back up and running.
  4. Do you know WHO is using your indirect material and where?  Do you keep track down to a name and a machine, cell, or area number?  If not, then your ability to hold people accountable to your indirect material spend is minimal at best.  And your ability to identify manufacturing issues driving up your indirect material spend is a guessing game.

While just a few simple examples, these basics can make a big difference in your indirect spend and an even bigger difference in your up-time and resource availability.  It doesn’t matter if you’re manufacturing clocks, trying to manage a public transit fleet, or supporting a group of community schools.  Not knowing what you have, where it is, and how it’s being used means you’re wasting money.

If you feel you do not have the funding to hire someone to help fix these issues, consider using a fraction of what you’re currently spending not to.