Systems cut costs, but get little management support
Research shows training may be all that's needed to improve productivity
Staff -- Purchasing, 6/2/2005
As an MRO buyer working for a small automotive supplier, R. Brandon Redwine wanted to help his company understand the importance of a controlled stockroom to manage costs associated with equipment downtime. So he undertook a research project to demonstrate the benefits of upgrading software used to manage the storeroom and provided training necessary for employees to effectively use the system. The project was coursework Redwine completed toward a degree in organizational behavior.
For the project, Redwine, now a chemical buyer with Eastman Chemical of Kingsport, Tenn., created a survey and mailed it to a random sample of 100 plant, purchasing and maintenance managers at manufacturing facilities with more than 100 employees in northeast Tennessee and southwest Virginia. He asked that managers respond to the survey only if their facility used stockroom or maintenance management software (MMS). The survey examined current use of the systems as well as plans for the stockroom and MMS. Twenty-eight managers responded to the survey.
A properly organized stockroom and MMS can provide a company with valuable information on equipment downtime and spare part and supply usage, assist in pinpointing recurring problems and can help better manage a preventive maintenance program improving productivity, reducing downtime and tracking and controlling costs, writes Redwine in his report on the survey's findings.
The survey results show that nearly all respondents agree that cost and supply usage and control are important key measurables at their facilities. Most agree that reducing downtime and traceability are important metrics. Although most agree that existing systems will require more attention in the future to be efficient, less than half believe that upgrades will actually occur. Nearly all agree that budget concerns would be the primary reason the changes will not take place.
"Most managers familiar with the benefits that these systems provide believe they are capable of impacting the bottom line," writes Redwine in his report. "However, they often do not think it will happen because of budget concerns or lack of understanding of system capabilities."
In the report, he suggests, "Companies that believe this software can help them be more efficient should look closely at each existing system to determine strengths and weaknesses. Upper management support is the first step to improvement. Small upgrades or increased training may be all that's necessary."
Here is a closer look at a sampling of the results (he asked respondents to agree or disagree with a list of statements) of Redwine's survey:
What is the current use and opinion of a stockroom (SR) and MMS?
- The SR/MMS is used to the fullest capacity: Two strongly agreed, 10 agreed, 11 disagreed, three strongly agreed, two were neutral.
- The SR/MMS could be improved: Ten strongly agreed, 17 agreed, one remained neutral.
How much importance is placed on cost and supply use in manufacturing facilities?
- Costs of spare parts/supplies are under control: One survey respondent strongly agreed, 12 agreed, eight disagreed, seven remained neutral.
- Use of spare parts/supplies is under control: Thirteen agreed, six disagreed, one strongly disagreed, seven remained neutral.
- The SR/MMS is used effectively to track costs and use: Fifteen agreed, seven disagreed, one strongly disagreed, four remained neutral.
What is the level of importance placed on equipment downtime, downtime traceability and downtime reduction?
- Reducing equipment downtime is a vital concern: Twenty-five strongly agreed and three agreed.
- The SR/MMS is used to track and report equipment downtime: Two strongly agreed, 14 agreed, six disagreed, three strongly disagreed, three remained neutral.
- Downtime traceability can be used to reduce equipment downtime: Eleven strongly agreed, 16 agreed, one remained neutral
- Downtime can be improved with an effective SR/MMS: Eleven strongly agreed, 13 agreed, one strongly disagreed, one remained neutral.
- Equipment productivity can be increased with effective PM schedules and a correct equipment bill of material: Seventeen strongly agreed, seven agreed, one strongly disagreed, two remained neutral.
How probable is it that increased or reduced importance will be placed on the stockroom in the future?
- Management realizes the importance of an effective SR/MMS: Four strongly agreed, 14 agreed, five disagreed, one strongly disagreed, four remained neutral.
- Management realizes the capabilities of an effective SR/MMS: Two strongly agreed, 11 agreed, seven disagreed, and two strongly disagreed. Six remained neutral.
What are some possible reasons that the SR/MMS may or may not receive more attention in the future?
- Budget concerns will affect use of SR/MMS: Ten strongly agreed, 13 agreed, three disagreed, two remained neutral.
- Appropriate personnel are in place to effectively use the SR/MMS: Fourteen agreed, nine disagreed, five remained neutral.
- Appropriate personnel will be hired to manage/use the SR/MMS: Three agreed, six disagreed, one strongly disagreed, 18 remained neutral.
| Up | Down | Same | Index | Change** | |
| Speed reducers | 46% | 9% | 45% | 68.2 | Up |
| Special fasteners | 33% | 5% | 62% | 64.3 | Down |
| Flat belting | 22% | 0% | 78% | 61.1 | Down |
| Nonfriction bearings | 26% | 7% | 67% | 60.0 | Down |
| Seals & rings | 20% | 0% | 80% | 60.0 | Down |
| Lubricants | 29% | 13% | 58% | 58.3 | Down |
| Temperature controls | 23% | 8% | 69% | 57.7 | Up |
| Rubber hose | 15% | 0% | 85% | 57.7 | Down |
| Lift truck batteries | 29% | 14% | 57% | 57.1 | Down |
| Electric motors: 1-30 HP | 16% | 5% | 79% | 55.3 | Down |
| Gears | 22% | 14% | 64% | 53.6 | Down |
| Adhesives | 22% | 17% | 61% | 52.8 | Down |
| Cutting tool inserts | 16% | 10% | 74% | 52.6 | Down |
| Motor controls | 13% | 13% | 74% | 50.0 | Down |
| Lighting fixtures | 12% | 12% | 76% | 50.0 | Down |
| Test instruments | 14% | 14% | 72% | 50.0 | Down |
| Grinding wheel | 16% | 17% | 67% | 50.0 | Down |
| * Above 50=rising, below 50=falling. **From last month SOURCE: PURCHASINGDATA.COM | |||||
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