Quality and Productivity Database

Descriptive Title of Proposal: Improving Productivity and Controlling Costs through MRO Inventory Management
Year Submitted 2006
Name of Institution University of Calgary
Name (Senior Administrative Office of the Institution) <br /> <br /> <br /> <br /> Richard Ogilvie<br /> <br /> <br /> <br />
Title (Senior Administrative Office of the Institution) Director, Materials Management
Telephone: 403-220-6989
Email Address: Email hidden; Javascript is required.
Abstract

From the beginning of this project, the development and implementation teams included procurement and contracts expertise from the Materials Management department, maintenance and operations expertise from the Campus Infrastructure department, and process and program expertise from the University's systems contracted MRO supplier. This cross-functional team ensured that all points of view were represented, allowing many potential issues to be identified early on. The transition from the previous state to the new program was made smoother because of the buy-in at all levels in the organization.

Criteria Please submit one paragraph describing how the proposal fulfills each of the evaluation criteria.
Transferability

The management of MRO inventories is an issue for many higher education institutions. The solution that the University of Calgary has developed with the expertise of its systems contracted MRO supplier can be easily implemented in other institutions. As the first higher education institution to implement this model in Western Canada, the U of C is open to sharing the program design and lessons learned, to enable a streamlined implementation at other institutions. While other technology solutions are available, those implemented at the U of C are the property of University's MRO supplier and must be procured through the supplier.

Quality Impact

The University of Calgary anticipates a 91% return on investment over five years. In the first year of the program, the University saw MRO related purchases drop by as much as 10% while the excess inventory, that was now tracked, was burned off. Carrying costs of inventory have also reduced, as five separate inventories were combined into one central location. This consolidation has minimized the requirement for space in academic areas and has, to-date, returned 1,200 square feet of prime real estate for academic purposes. Further consolidation is expected over the next year, with an additional 10,000 square feet projected to be returned.

Productivity Impact

To improve the U of C's ability to address its facility maintenance needs, it was essential to direct all available resources to value-add MRO activities. Therefore, this program was designed to reduce operating and inventory costs while improving productivity without eliminating any positions. New processes for MRO activities were also developed to facilitate this program. The result of these processes over the past year has been a lessened administrative burden on front-line employees. Further, the five trades-people previously responsible for the ordering of inventory are now available on a full-time basis to work on direct value-add MRO activities.

Innovation

The U of C adapted the initial concepts for this program from a model that had proven successful in two of Alberta's oil sands operations. Point-of-use inventory management was a concept that had proven successful for them. Before this program, the U of C was like most higher education institutions that ordered inventory as needed, with very few formal processes. As further indication of the originality of this program, one year after the U of C began designing this MRO inventory management program, the Institute for Supply Management (ISM) presented a similar model at its 2005 International conference in San Antonio as a new and innovative methodology for managing MRO inventories.