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 crapshoot 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 IBP 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).
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.