Managing MRO Inventory
MRO vs. “Real” Inventory Management
Traditional inventory management—covering raw material, component parts, work in process (WIP), and
finished goods—is controlled and managed to optimal levels, providing enough supply to cover current production needs and allow for the most probable contingencies. The inventory is generally checked through a process known as cycle counting, using ABC analysis costing. The inventory is received and located in a warehouse or WIP location and decremented as it is used. When an enterprise resource planning (ERP) system is utilized, the inventory may be replenished through a reorder advisement through MRP or through a kanban type of system where the supplier or vendor is notified and the inventory is replenished. Bills of materials are kept for the end products; they detail the amount and costs of the inventory. There is never an issue of senior management doing an end run around the system to expedite the process; that would hurt everything from back flushing to inventory accuracy, and many other key performance indicators.