Manufacturing · MRO Optimization

MRO Inventory Optimization Program for Multi-Plant Chemical Processing Company

Implemented comprehensive maintenance, repair, and operations (MRO) inventory optimization across 8 chemical processing facilities, consolidating spare parts inventory, establishing min-max levels, and identifying obsolete stock to reduce carrying costs by $4.2 million annually.

Facilities
8 Plants
Team Size
24 Specialists
Duration
6 Months
Annual Savings
$4.2M
The Challenge

Excessive MRO Inventory Costs and Inefficient Parts Management

The chemical processing company struggled with bloated MRO inventory across their facilities, resulting in excessive carrying costs, obsolete parts, and frequent stockouts of critical components despite high inventory levels.

Inventory Redundancy

Each facility maintained independent spare parts inventory with significant duplication across sites. No centralized visibility or coordination of MRO stock levels.

Obsolete Stock Accumulation

Years of equipment upgrades and process changes left substantial obsolete inventory on shelves. No systematic process for identifying and disposing of outdated parts.

Inadequate Stocking Levels

No data-driven approach to setting min-max levels. Critical parts frequently out of stock while slow-moving items were overstocked, impacting maintenance efficiency.

High Carrying Costs

Excess inventory tied up $18 million in working capital with annual carrying costs exceeding $5 million. Financial pressure to reduce inventory investment without compromising operations.

Chemical Processing MRO Warehouse
42,000+
MRO SKUs Analyzed
Our Solution

Data-Driven MRO Optimization Program

We implemented a comprehensive MRO optimization program combining physical inventory verification, usage analysis, and strategic consolidation to reduce costs while improving parts availability.

Complete Inventory Audit

Conducted comprehensive physical inventory of all MRO items across 8 facilities. Verified quantities, conditions, and locations. Reconciled physical counts with ERP records to establish accurate baseline.

Usage Analysis

Analyzed 3 years of historical usage data for all 42,000+ SKUs. Identified fast-moving, slow-moving, and obsolete items. Calculated optimal reorder points and quantities based on actual consumption patterns.

Inventory Consolidation

Identified opportunities to consolidate duplicate inventory across facilities. Established centralized stocking locations for slow-moving items. Created inter-facility transfer protocols for emergency needs.

Min-Max Optimization

Established data-driven min-max levels for all active SKUs based on usage patterns, lead times, and criticality. Implemented automated reorder triggers in ERP system to maintain optimal stock levels.

Obsolete Inventory Removal

Identified $6.8 million in obsolete inventory for disposal. Coordinated with maintenance teams to verify equipment status. Managed disposition through sales, recycling, and proper disposal channels.

Policies & Procedures

Developed standardized MRO management policies and procedures. Created training materials for maintenance and warehouse staff. Established ongoing monitoring and continuous improvement processes.

Optimized MRO Warehouse
Results Achieved

Significant Cost Reduction with Improved Service Levels

The MRO optimization program delivered substantial financial benefits while improving parts availability and maintenance efficiency across all facilities.

$4.2M Annual Savings

Reduced annual carrying costs by $4.2 million through inventory optimization and obsolete stock removal. Freed up $11 million in working capital for other business priorities.

38% Inventory Reduction

Decreased total MRO inventory value by 38% from $18M to $11M through consolidation, optimization, and obsolete stock removal while maintaining service levels.

92% Parts Availability

Improved critical parts availability from 76% to 92% through optimized min-max levels. Reduced maintenance delays and improved equipment uptime across all facilities.

$6.8M Obsolete Inventory Removed

Identified and disposed of obsolete inventory valued at $6.8 million. Recovered $1.2 million through sales and recycling. Freed up valuable warehouse space for active inventory.

"This program transformed our MRO management. We're now spending millions less on inventory while actually having better parts availability. The data-driven approach and systematic execution were exactly what we needed."

VP of Operations
Multi-Plant Chemical Processing Company

Program Impact

Comprehensive MRO optimization across all facilities

42,000+
SKUs Analyzed
$4.2M
Annual Savings
38%
Inventory Reduction
92%
Parts Availability
8
Facilities
$6.8M
Obsolete Removed
6
Months Duration
$11M
Capital Freed

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