MRO Inventory Optimization Program

Implement optimal warehouse stock management, to guarantee critical items availability with improved service level, and procurement & working capital savings with reduced excessive stock

Why implement MRO inventory optimization?

Lower excess MRO inventory
with optimal MRP parameters in place, warehouse stock is reduced by 15-20%, turnover is increased, while working capital is released with related excess costs reduced and margins improved
Minimize stock-outs
when criticality to operation is embedded into stock management, the service level increases to 95-99%, and the probability of stock-outs is reduced. Every critical item is available for production
Ensure uninterrupted production
Optimizing stock parameters dramatically reduce equipment downtime, improving profits
Reduce procurement budget
with robust model implemented, unnecessary purchases of up to 7-10% in anual budget can be avoided. Only necessary pruchase is made

MRO inventory optimization steps

Extract & transform ERP data for analysis & input into the optimization model

Assess criticality and build ABC framework, to classify each material & determine if it is re-ordered automatically or ordered on-request

Build optimization models and update MRP parameters (Re-calculate min/max with the desired service level, consumption forecast, and real lead times)
Embed analytical models into day-to-day routines, considering best practices and business specifics
Achieve stock reduction and procurement savings,
while improving service levels

MRO inventory optimization: step-by-step


Gather & transform data to be applied in the analytical model

Data transformation and consolidation are performed to maximize data quality and analytics results’ reliability

Automatic errors correction

Data recognition in records

Assess criticality & classify per ABC

Criticality definition

  1. High criticality - shortage of material will cause the shutdown of the operation or impact HSSE policy restrictions
  2. Medium criticality - shortage of material won’t cause the shutdown of the operation but reduces the total production volume or/and quality
  3. Low criticality - shortage of material does not have a relevant impact on the production or HSSE

ABC Classification

A. All high-critical and medium-critical fast movers

B. Medium-critical slow movers and low-critical fast movers

C. Low-critical slow movers and medium/low-critical non-movers

Calculate MPR parameters with robust models & transformed data

When optimizing MRO stock, we answer two questions per each material: (1) Should it be automatically replenished or ordered on request? (2) What are the optimal reorder point and reorder size? To answer them, we use various input data and analytical models, perform calculations, and embed frameworks

Redesign processes to ensure optimal & balanced stocks of materials
with embeded analytics, based on the world's best practices and business specifics

Achieve stock reduction of 20%, while improving service level
Pay off the initiative fast, while ensuring high service level and minimized stock-outs
Get a free assessment of your data
Contact us today and we will help to size your initiative

Selected project in MRO stock optimization

MRO Inventory Optimisation in a Gold Mine


  • High values of stockout and overstock that led to high stock value and/or equipment unavailability
  • Lack of alignment between Maintenance (client) and Procurement (service provider) areas
  • Inventory management processes are not well defined and are manually performed


  1. Tools implemented to automate Procurement routines related to restocking and items’ creation processes
  2. The procurement team intensively trained to perform the restock and items’ creation processes
  3. Maintenance team trained to provide annual demand forecast and criticality for items


  • Reduction of working capital estimated at 21%, or USD 8.8M, in the 1st year
  • Service level resulting from the optimized restock parameters increased by 19% for high-critical items
  • Staff fully operational and independent after 11 weeks of the project

Our clients around the world

Weatherford logo
Trident Energy logo
Nordgold logo
Nornickel logo
Highland Gold logo
Tiger Realm Coal logo
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Shell logo

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