Spare Parts & MRO
Spare parts & MRO
It’s hard enough to forecast demand and optimize inventory for finished goods. It’s harder still to do it for spare parts and materials. That’s in part because much of MRO spare parts and materials demand is as erratic and intermittent as it is financially consequential. While the conveyor bearings may wear predictably, the specialized robotics are expensive and can fail randomly. At the extreme, this leaves MRO materials managers in a difficult situation between:
- Near fail-safe stocking levels with unsustainably high carrying costs for MRO inventory
- Low-cost stocking levels with higher potential for stock-out, production stoppage, supply shortage, and lost sales
No materials manager wants either bad outcome, yet many lay awake fretting amid hundreds of thousands of items to forecast and manage.
Automate spare parts and materials forecasting
When equipment fails, the right spare parts and materials must be on-hand, especially if they are critical to production. That said, forecasting demand for these items is complex and difficult. One spare part or material may be critical to zero-downtime, but rarely needed. Another may be expensive, carried for a long period, and prone to obsolescence. Both are prone to random spikes, which seem to obliterate any faintly discernible patterns.Vanguard Predictive Planning for MRO is a cloud inventory platform that automates forecasting while applying advanced analytics to derive trends, patterns, and probabilities from even the most intermittent of demand sets. Vanguard’s advanced analytic tool set includes Croston’s intermittent demand model, as well as more advanced Monte Carlo simulations for probability modeling. All of this is packaged in a single cloud work environment to help users improve margins and service levels, while reducing stocks-outs and net carrying costs.
Optimize inventory planning and MRO
Vanguard makes it easy to rationalize and code MRO inventory and materials by cost, criticality, storage capacity, supplier lead time for purchase/manufacture, and more. The system automatically optimizes parts and maintenance requirements, weighing (for example) carrying costs against stock-out losses, or a low-cost maintenance schedule against low-risk alternatives. The result is an optimal mix of inventory levels, reorder points, maintenance touches, and operations policies to achieve the lowest possible Total Cost of Ownership (TCO).
Best-in-market usability
Leverage Vanguard Software for part, or all, of your S&OP or IBP process: from MRO inventory and materials to sales forecasting to supply planning to budgeting. Vanguard can integrate all of these distinct applications on a single platform designed to unify management estimates, exceptions, and data.
Vanguard’s UI integrates seamlessly with your business processes, enabling diverse teams and users to communicate and collaborate. Plus, all changes and updates are dynamic, system-wide. Change your MRO demand plan, and see that change reflect instantly in your inventory order schedule – on the same screen.
Results
“Billions [of dollars] in operating margin and trillions in market capitalization separate supply chain winners from losers,” according to AMR Research.
Best-in-class planners see:
%
reduction in inventory
%
stronger perfect order fulfillment
%
shorter cash to cash cycle times
%
fewer stockouts than competitors
Featured resources
Case study
Spare parts distributor decreased inventory spend by 10%
Solution brochure
Industry sheet
Customer testimonials
- Demand forecasting
- Product mix/portfolio analysis
- Sales and operations planning (S&OP)
- Supply chain planning
- Information sharing
- Operational efficiency
- Equipment diagnostics
- Surveys and research
- Multi-Echelon Inventory Optimization (MEIO)
- Artificially Intelligent forecast method recommendation
- POS Demand Sensing
- New Product Forecasting
- Promotional Forecasting
- Sell-to and sell-through forecasting
- Bill of Materials (BOM) Support
- Predict demand for final products and raw materials, even when historical data is scarce.
- Optimize product portfolios, pricing, and promotions. Product development: Estimate life-cycle costs and forecast adoption across all channels.
- Enable real-time collaboration between Marketing & Sales and Operations to ensure production capacity can profitably support customer demand (and vice versa).
- Optimize your supply chain network, inventory levels, distribution plans, and more.
- Involve suppliers and customers in planning processes. Dynamically receive their latest demand and material availability estimates.
- Conduct process improvement/Six Sigma projects to reduce costs, cycle times, and waste.
- Expertly guide operators, technicians, and support agents through complex troubleshooting processes using automated question-and-answer sessions.
- Know your market and understand your customers’ needs, wishes, and opinions using online surveys.
- Increase service levels; reduce safety stock; improve turns and profitability.
- Automate the selection of the best-possible forecast methods and parameters.
- Spot and respond to demand trends and signals in real time; improve downstream replenishment.
- Optimize product transitions; identify cannibalization effects; respond automatically to seasonality and trends.
- Optimize inventory levels and production scheduling.
- Improve demand sensing and demand-supply planning.
- Streamline production; eliminate errors, delays, and compliance failures.
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