Inventory management and planning in MRO with SAP IBP
Optimizing spare parts inventory is a cornerstone of efficient Maintenance, Repair, and Operations (MRO) practices. Timely access to critical components ensures operational continuity and achievement of organizational goals, even in dynamic environments with fluctuating consumption and planning challenges.
Mistakes in this process can mean unexpected machine downtime, high spare parts acquisition costs, and high inventory levels of non-critical parts, among other problems. How do you ensure that you can always meet your spare parts needs without unnecessary purchasing and stockpiling? The MRO planning approach of SAP Integrated Business Planning (SAP IBP) enables that alignment: that of inventories, working capital investment, and actual parts demand.
SAP IBP is fed by a series of inputs coming from the ERP: all the information and data from which decisions about spare parts purchasing needs will be made. This is the spare parts consumption history, the maintenance plan, the projects that are scheduled and master data such as the number of plants. All this diverse data flow into SAP IBP, which converts it into projections, alerts and a spare parts plan as close as possible to the actual demand, providing complete visibility over the entire process. In addition, the tool allows the generation of different scenarios and alerts, which will help to visualize what it would mean in terms of investment in working capital, for example, to make certain decisions and, therefore, to take each step with the least possible uncertainty.
How SAP IBP helps in the MRO planning process
Based on the inputs coming from the ERP (spare parts history, maintenance plan, scheduled projects and master data), SAP IBP allows a more realistic MRO planning and a better ability to respond to a demand that is difficult to predict in today’s unstable environment. MRO planning consists of four stages:
First stage: demand planning
The first step after having gathered all the information on history, projects and master data is to plan the demand we will have for spare parts and resources, unifying all the data entries. Thus, from the history, it will be possible to work corrective maintenance with statistical models; and from the maintenance plans and projects, it will be possible to make the explosion of the need for parts. All this results in a total spare parts demand plan.
Second stage: inventory optimization
The information generated in the first stage (the demand for spare parts, that is dependent on preventive maintenance and that associated with projects) is used to optimize the inventory, which occurs in the second stage: it is a matter of optimizing the safety stock and the spare parts points. Here, IBP helps through new models that make it possible to also cover low-turnover products, one of the major challenges of MRO.
Third stage: supply planning
Inventory policies and demand information allow us to go one step further: supply planning. IBP provides full visibility on parts availability, which will help to plan how to cover the different needs that we know will arise and to anticipate in the event that we see that we are running short in a certain location.
Fourth stage: valorization of spare parts
The final output of this process is the value of the spare parts sourcing plan. In an environment where it is essential to be flexible and adapt quickly to different changes, the SAP solution allows you to generate different scenarios and calculate the value of the purchasing and sourcing plan.
In all these stages, in addition to the information on the spare parts themselves, there is another view with data on the consumption of resources, i.e., what manpower is available and what will be needed. This allows for better planning and to be able to provide, at the valuation stage, information on the total cost of the maintenance plan.
Process views in IBP: Excel and Fiori
For this total visibility, SAP IBP has both an Excel view and a SAP Fiori view. In the former, on a single screen, the maintenance planner can visualize, per part, the historical consumption, the statistical projection or the cost associated with that projection, both for unplanned maintenance and for the demand associated with maintenance activities or projects. The final result is a total consumption projection that allows to plan different resources: workers, hours, etc., and when they will be needed. The final balance gives a complete and adjusted purchasing plan that enables the company to carry out the activity or project (or attend to unplanned maintenance) successfully.
As for the Fiori view, one of its great advantages is that it solves the lack of visibility that often causes supply problems to be overlooked when we could still solve them in time. In addition to the generation of different scenarios that are so necessary for informed decision-making, SAP IBP allows you to generate alerts. Thanks to them, it is not necessary to go through each element looking for issues that need our intervention, but the system itself will alert us and allow us to work on the basis of alerts. We can establish their severity (from how many items an alert is generated, for example, and when it goes from moderate to serious) and their conditions. When entering each alert, we will have a complete view of the details: how many parts (or hours available) there are, what the projection is when we will be short, etc.
SAP IBP is, in short, an essential tool for MRO planning. In an unstable and rapidly changing scenario, being able to anticipate supply needs, but without falling into an over-inventory is essential to develop the business without turbulence and achieve success. At NTT DATA we help you implement SAP IBP for MRO planning and start using your resources more efficiently and intelligently.
