Facility Dude

Keeping a watchful eye on inventory management to cut costs

By FacilityDude
Jun 09, 2014

InventoryEdge, Facilities Management, Asset Management

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Keeping a watchful eye on inventory management to cut costs Facility managers for corporate or government facilities are no stranger to conversations with the accounting department. One of the main goals of facility management is to maximize building efficiency while keeping costs down. Especially for larger facilities with dozens - or even more - of tenants, this can prove a challenge. Fortunately, savvy building managers can find some extra operating cash if they look closely enough in one specific area - their supply closets.

Taking stock of your stock

Inventory management is about more than just making sure tenants know where the toilet paper is being kept. It's an important part of efficiently managing a facility to reduce unnecessary expenses. MRO - described by MyPurchasingCenter.com as maintenance, repair and operations is a major source of expenses for many facilities. In fact, according to data, such expenses account for roughly $100 billion spent by U.S. businesses annually. More surprising is that around $10 billion of that money is spent on products that are never used.

MyPurchasingCenter.com reported the results of a study from Grainger Consulting Services that revealed that of 500 U.S. businesses surveyed, half of them were inefficiently managing their inventory, and this can be a huge source of unnecessarily lost costs for facility managers.

"It's a rich opportunity for MRO procurement professionals to take costs out of the business through a more aggressive approach to inventory management," Grainger senior director Kevin Hartler told the source.

Turning to data

The key component that facility mangers need to leverage to rein in their inventory spending is data. Keeping track of your inventory, how much comes in and how much is being used is essential to keeping costs in check. Looking into a facility management software that incorporates a robust inventory management and cataloging system may be a very smart investment, as the saved costs in unnecessary MRO product can more than offset the cost of implementing a new system if it's used effectively.

Another potentially important link that may get overlooked is the use of distributors for inventory management purposes. While it may seem easier and cheaper to purchase products directly from large retail chains and superstores, Corrections.com is quick to point out that distributors also offer services that you can't get from a store. Custodial and public health training are value-adds that can go a long way in helping you get the most out of your MRO orders, resulting not only in needing to spend less on products, but also helping maintenance staff get more out of what you do order.

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