March 12, 2025
12:00 PM ET / 11:00 AM CT / 9:00 AM PT / 5:00 PM GMT
Duration: 1 hour
Sponsor: SPARETECH Inc.
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Summary
Manufacturing companies struggle to manage spare parts inventories. Data show that in the United States concerning trends include:
- Excessive inventory costs:
- $1 million wasted per plant per year by purchasing unnecessary spare parts
- Approximately 30% of spare parts in stock are unnecessary in typical production facilities
- Over 60% of all stocked spare parts have not been used in three years
- Capital tied in inventory:
- Inventory, accounts receivable, and accounts payable have accumulated $1.1 trillion in cash, equivalent to about 7% of the U.S. GDP
- Inventory to sales ratio:
- U.S. retailers currrently hold about $1.43 in inventory for every $1 of sales
These statistics underscore the pressing need for better spare parts inventory management in the U.S. manufacturing sector.
This systemic mismanagement creates a significant operational burden. While excessive quantities of certain parts accumulate, essential components are often unavailable when needed, leading to costly downtime, operational inefficiencies, and resource misallocation.
The persistence of these challenges in traditional MRO (Maintenance, Repair, and Operations) stems from four fundamental issues:
- Data management deficiencies: MRO professionals lack good data on their spare parts inventory, making it more difficult to find spare parts for repairs or perform more advanced tasks such as optimization or predictive maintenance
- Inventory optimization challenges: Insufficient stock leads to operational disruptions, while excess inventory results in capital inefficiency and environmental waste
- Financial oversight limitations: MRO teams often lack the necessary data infrastructure for informed procurement decisions
- Operational inefficiency: Unreliable data prevents teams from implementing effective inventory optimization and spend management strategies
Artificial intelligence (AI) transforms spare parts inventory mangement through advanced algorithms and machine learning capabilities by enabling predictive analytics, indentifying onsolete components, streamlining procurement processes, and minimizing human error in data management.
Implementing AI as an MRO force multiplier delivers substantial organizational benefits, including enhanced operational efficiency, reduced capital expenditure, decreased operational risk, improved productivity, and demonstrable return on investment.
Jim Devenney from Idahoan Foods will share how his company was able to better control its inventory and spare parts, boosting operational efficiency. Learn how modern tools can reduce costs and improve profitability.
