PM2 Blog

MRO Inventory Management

OK, so I’ve been talking about how better management of your MRO inventory can help you survive the economy for months now.  Let’s get down to “brass tacks”.  The bottom line is that what you do today has to affect the bottom line today or you won’t be here to experience the effects produced tomorrow.   All of the rules have changed, but the base principles are the same.   Consider these three time honored rules and how they might be applied to your MRO inventory today.

Rule #1 – Increase Your Income

Rule #2 – Spend Less

Rule #3 – Control More

So, for today, let’s explore Rule #1.

Rule #1 – How can your managing your MRO inventory increase your income? You have to take what you have that has value and turn it into cash.

How much inventory do you own but don’t need or use?

Sell, Salvage, Barter, or Return

  1. Look and see what is in your “attic” or “hidey holes”.  We recently worked for a client that had old obsolete door knobs and door knockers stored in an attic.  When we pulled them down, we found that they were brass and worth over $12,000 to a metal recycler.  Would $12,000 of “found” money be helpful to your company right now?  What else might be lurking in those unexplored places of your facility?  Copper wire?  Excess piping (What is it made of?)?  What about all of those small, but expensive, electrical parts? 
  2. When you are looking for your “Buyer”, be creative.  You might sell to your current customer, but you might also sell to a new customer, or a salvage company, or a vendor.  
  3. Consider bartering for goods and services.
  4. Return or sell your excess inventory.  It not at all unusual for us to discover that a client has a year or more of inventory on hand.  There are many causes to how and why this happens, which we have explored, and will explore again, but for today’s purposes, think of this excess inventory as money sitting on your shelves that you can be using to make your payroll.  How much do you really need to stock?  Turn the rest into cash.
  5. Look to that old office equipment at the back of the warehouse as a source of income.  Do you have desks, old phone systems, copy machines, binding equipment, etc… back there?  We often see companies that buy a new machine as an old one becomes obsolete, but they can’t quite bear to part with the old one.  They hold onto it because it may still have value, or no one has time to figure out how to sell it, or they keep it as a backup , in case the new one breaks down, or whatever, whatever, whatever…  It’s time to let them go.  Even if you only get a small price for them, it’s more than you have now and storage space also costs money.  Every item has to earn its right to stay in your inventory, otherwise, it is a $1 bill (or worse a $50 or $100 bill) just sitting on your shelf collecting dust and being devalued by the minute.
  6. OK, so getting cash in your hands is the crucial Rule #1.  In upcoming weeks, I will address Rule #2 – Spend Less, and Rule #3 – Control More.

If you have questions or need help with any of these or other inventory related questions, Professional Materials Management (PM2) stands ready to assist you.  Feel free to call us at (813) 249-0834. Or visit our website:

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