ME50 MRO Materials Management Manual 20200301 (C)

Manufacturing Standard
FOR INTERNAL USE ONLY
ME-50 Edition: March 01, 2020
WORK PROCESS MANUAL
MRO Materials Management
Responsible: Maintenance & Reliability Network (MaRS)
Requests, reactions to Corporate Operation & Re- e-mail: jos.aelst-van-der@dsm.com

sponsible care:
Approved on behalf of Operations Leadership Team: Dave Ellis (Work process owner)
© DSM NV 2020
This document is DSM NV property; copying, reproduction or disclosure to third parties is subject to written authorisation.
For Internal Use Only
ME-50: March 01, 2020 2/57 For internal use only
Table of Contents
Introduction ............................................................................................................................................................. 3
1 Level 0 work process description .......................................................................................................... 3
1.1 Purpose of the work process MRO Material Management ................................................................... 3
1.2 Level 0 flow diagram ............................................................................................................................. 3
1.3 Interaction MRO with other work processes ......................................................................................... 4
2.1 Level 1 Flow diagram ............................................................................................................................ 5
2.2 Level 1 activity description table ........................................................................................................... 6
3 Level 2 flow diagram ............................................................................................................................. 6
4.1 Material Article Catalog Management ................................................................................................... 7
4.2 Logistics Concept Management .......................................................................................................... 11
4.3 Inventory management ....................................................................................................................... 15
4.4 Store & Supply Goods ......................................................................................................................... 21
4.5 Evaluate & Improve ............................................................................................................................. 28
5 Performance indicators ....................................................................................................................... 30
6 Description of roles, terms and abbreviations ..................................................................................... 31
6.1 Role descriptions ................................................................................................................................. 31
6.2 Definition of terms ............................................................................................................................... 34
7 Symbols and abbreviated terms .......................................................................................................... 43
1 Annexes .............................................................................................................................................. 44
2 Request for MRO item ........................................................................................................................ 44
2.1 Request for MRO item → Actual Need ............................................................................................... 44
2.2 Request for MRO item → Security of Supply ...................................................................................... 45
2.3 IER data MRO item ............................................................................................................................. 45
2.4 Change request for MRO item material article catalog ....................................................................... 46
2.5 Market availability data MRO item ...................................................................................................... 46
2.6 Determine MRO category ................................................................................................................... 46
2.7 Alternatives for MRO item ................................................................................................................... 47
2.8 Warranty data ...................................................................................................................................... 47
2.9 Repair data .......................................................................................................................................... 48
3 Logistic concepts ................................................................................................................................. 48
4 Service Level Agreement example ..................................................................................................... 50
5 Determine inventory model ................................................................................................................. 51
5.1 Inventory model - storage ................................................................................................................... 52
5.2 Inventory model - inventory parameters ............................................................................................. 53
5.3 Inventory model - inventory evaluation ............................................................................................... 53
6 Related cost charging ......................................................................................................................... 54
6.1 Charge order related cost ................................................................................................................... 54
6.2 Charge SLA related cost ..................................................................................................................... 54
7 Performance measurement ................................................................................................................. 55
7.1 Key performance indicators per process step ..................................................................................... 55
7.2 Key Performance Indicators for Service Level Agreements ............................................................... 56
8 Handover/commissioning .................................................................................................................... 57
9 Sell/Share/Scrap evaluation ................................................................................................................ 57
10 MRO stock value ................................................................................................................................. 57
11 M3 Excel support tool .......................................................................................................................... 57
Introduction
This work process manual supports the fulfillment of the Operation Requirements.
This manual of the MRO Material Management (also abbreviated M3) work process describes DSM's practice
on material article catalog management, logistic concept management, inventory management and store &
supply goods management. This work process is subject to continuous improvement.
The MRO work process is part of the Improve cycle of Manufacturing Excellence (ME), Figure 1 detailed de-
scription of each ME work process can be found in the General Manufex Training – Manufex Starter Guide.
Improve
Maintenance Plant
MRO
Small
Projects
Daily Asset Improve Large
Utilization
Cycle Cycle Capital
Projects
DDSR
Operate Improve
Plant Normal Equipment
Reliability
Figure 1: ME WPs Daily and Improve cycle
1 Level 0 work process description
1.1 Purpose of the work process MRO Material Management
The goal of the Materials Management Work Process is twofold:

- To ensure optimal security of supply to add value to the business;
- To optimize the process for fulfilling the need for an MRO item at minimum supply chain cost.
1.2 Level 0 flow diagram
MRO Materials Management

- Material Article Catalog
Management
1. Need for security - Logistic Concept Man- Delivered
of supply agement or stored
2. Need for MRO item - Inventory Management MRO item
- Store & Supply Goods
- Evaluation & Improve
1.3 Interaction MRO with other work processes
- Critical handovers:
- MRO to and from Improve Equipment Reliability (ME06)
- Improve Plant to MRO
- LCP to MRO
See Figure 2 for the interactions of the different steps with other work processes
Figure 2: Interaction of MRO Material Management with other work processes
M Maintenance Work Process
IER Improve Equipment Reliability Work Process
LCP Large Capital Projects Work Process
MoC Management of Change
PtP Purchase to Pay
SP Small Projects Work Process
TA Turnaround Work Process

2.1 Level 1 Flow diagram
1. Material Article Catalog Management

2. Logistic Concept Management
3. Inventory Management
4. Store & Supply Goods
5. Evaluation & Improve
1. Need for
security
of supply Material article Logistic Inventory Store
2. Need Catalog Man- Concept Management Supply Goods
for MRO agement
item Management Delivered
or stored
MRO item
Evaluation &
Imprve
Improve
2.2 Level 1 activity description table
Main ac- Activity description Input Output

tivity
1.1 Request for a - Request for an MRO item (actual - Actual need for a MRO item;
1. Material Arti-
MRO item or expected need) from other work

Management
Or
cle Catalog
1.2 Define & maintain processes. (e.g.Maintenance, IER,

- An MRO item with sufficient data for
material article catalog LCP, etc.)
selecting an appropriate logistic con-
cept
2.1 Categorize MRO - A MRO item with sufficient data for - Selected Logistic Concept
Management
2. Logistic Concept
items selecting an appropriate logistic - Service Level Agreement with (pre-

2.2 Check global con- concept. ferred) supplier or DSM store
tract
2.3 Define logistic
concept
2.4 Develop, modify
and implement SLA
logistic concept
3.1 Define stock policy - Materials Management request - Ordered MRO items
3. Inventory Management
3.2 Stock evaluation from other work processes (e.g. im-

Or
and control prove Plant, Improve Equipment
- Stock Policy for the MRO item(s);
3.3 Order entry Reliability, Maintenance, etc.)
3.4 Maintain inventory
levels - Service Level agreement for MRO
3.5 Order administra- item(s)
tion
3.6 Distribution Man-
agement
4.1 Inbound goods - Materials Management orders & - Stored MRO item(s) (for security of
4. Store &
Goods
Supply
4.2 Goods storage materials from other work pro- supply)

4.3 Outbound goods cesses (e.g. improve Plant, Improve Or
4.4 Distribution Equipment Reliability, Maintenance, - Delivered MRO item(s).
4.5 Return goods etc.)
5.1 Evaluate & Im- - Performance Metrics - Improvement initiatives
5. Evaluation &
Improve
prove - Data from Materials Management - Prioritized and defined action items
Process Steps Material Article Cat- (who, what and when accomplished).
alog Management, Logistic Concept - Based on the measurement and ana-
lysis supplier delivery data are fed
Management, Inventory Manage-
back into collect MRO data.
ment and Supply & Store Goods
3 Level 2 flow diagram

The level 2 flow diagram is not relevant for this work process. The process steps are integrated in Level 3.
4.1 Material Article Catalog Management
4.1.1 Level 2 main activities description step 1: “Material Article Catalog Management”
1.1. Request for a MRO item

1.2. Define and Maintain Material Article Catalog
4.1.2 Input-Output “Material Article Catalog Management”
4.1.3 Level 3 description table for activity 1 “Material Article Catalog Management”
Lev Level 3 Step Step description Input Output RASCI

el 2
1.1.1 Define The requestor defines which of the The request for Request for a (R):
1.1 Request for a MRO item
need (ac- two basic needs for MRO supply is an actual need is MRO item (see Requestor
tual or needed: initiated in M, example data
expected) 1) Actual need for a MRO item (Go to TA, LCP or SP. gathering tool in
for MRO 1.1.2). annex 2,1/2)
supply 2) Expected need for a MRO item to The request for
be able to secure supply of spare an expected Actual need: PtP
parts in the future (Go to 1.1.3) need is initiated step P-070-010
in IER. and P-070-02 in-
Ref. Examples: cluding PE-080
Annex 2.1 Request for MRO item (ac- M/PE-110 TA
tual need); Expected need:
Annex 2.2 Request for MRO item (se- PtP step P-050-
curity of supply). 010 Identify
need for RFQ

el 2
1.1.2 Collect The MRO-item is actual needed Request with Actual need in (R):
data for - The relevant data are available complete data material article Requestor
MRO that → select the item from the Mate- catalog: Choice
is actual rial Article catalog. to direct source
needed - The relevant data are not availa- the MRO-item
ble in the Material Article catalog
→ The requestor collects all Actual need not
data of the MRO item that is re- in material article
quired to direct source or if item catalog: Choice
does need to ordered more then to direct source
once to update the material arti- the MRO-item
cle catalog. or if item does
need to be or-
Ref Examples: dered > 1 →
Annex 2.1.1: Actual need order from make change re-
catalog quest material
Annex 2.1.2 Actual need not in the article catalog
catalog (step 1.1.5)
1.1.3 Collect The requestor collects all data of an Collect all rele- All needed data (R):
data for MRO item that is required to update vant data for a MRO-item Requestor
MRO that the material article catalog and to de- to complete the
is ex- fine or modify the logistic concept (for IER delivers reli- process to se- (I):
pected example OEM number, item charac- ability, criticality cure the supply Maintenance
needed teristics, item criticality, maintenance and lead time at the right time Specialist,
for secu- window, supplier delivery time etc.). data (IER WP). Purchasing
rity of Manager
supply Ref. Examples: From the market
Annex 2.2 Request for MRO item (se- and evaluation
curity of supply); supplier delivery
Annex 2.3 IER data MRO item; data need to be
Annex 2.5 Market Availability MRO gathered.
item
1.1.4 Gate- The gatekeepers checks if the data All needed data Checked (R):
keeping MRO item (Annex 2.2/2.3 IER) has for a MRO-item ( datasheet con- Gatekeeper
“IER data been filled out correctly and complete including IER form the
availa- (The IER requirements can be found data gathering) requirements (I):
ble” for in the Annex 2.3 datasheet as the set. Requestor
MRO bold marked questions)
needed
for secu- - When information is incomplete the
rity of request will be returned to the
supply requestor for further completion
- When information is complete → Go
to 1.1.5 change request
Ref. Example:
Annex 2.3 IER data MRO item
1.1.5 Deter- The requestor determines if the item Information out Completed (R):
mine is to be changed or added in the ma- of gathered data Change request Requestor
need for terial article catalog. Main criteria for for MRO item
change adding are: to be ordered more than material article
request once, does not exist in the material catalog.
material article catalog already.
article
catalog Ref. Example:
Annex 2.1/2 Request for MRO item
Annex 2.4. Change request for MRO
item material article catalog

el 2
1.2.1 Receive The catalog manager checks the Change request Change request (R):
1.2 Define & maintain Material Article Catalog
and ver- Change request for MRO item for for MRO item for MRO item Catalog man-
ify completeness. material article material article ager
change catalog. catalog with
request Ref. Example: complete data
for mate- Annex 2.1/2 Request for MRO item and received for
rial Annex 2.3 IER data MRO item further pro-
article Annex 2.4.Change request for MRO cessing.
catalog item material article catalog
1.2.2 Search The catalog manager challenges the Change request
Change request (R):
item in Change request for MRO item and for MRO item
for MRO item Catalog man-
material checks the material article catalog for material article
checked against ager
article duplication. catalog. the material arti-
catalog cle catalog. If the
Ref. Example: item is found, in
Annex 2.4.Change request for MRO case of a actual
item material article catalog need, the item is
selected (3.3.1).
1.2.3 Material The catalog manager determines if Change request MRO item with (R):
article ca- the MRO item has not been found in for MRO item decision to ex- Catalog mana-
talog the material article catalog and quali- material article tend material ger
extens- fies for extension, searches for catalog. article catalog or
ion? alternatives are started (1.2.4 & 5). not. (I):
If the MRO item does not qualify or a Requestor
corresponding catalog extension has
been found, this will be communi-
cated to the requestor (1.2.7).
Ref. Example:
Annex 2.4 Change request for MRO
1.2.4 Search The catalog manager consults with Change request Change request (R): Catalog
alterna- the maintenance specialist whether for MRO item for MRO item manager
tive in the change request for MRO item has material article material article
material alternatives and/or similar items in catalog. catalog checked (I):
article the material article catalog. for alternatives Maintenance
catalog in the material Specialist
Ref. Example: article catalog.
1.2.5 Deter- The gatekeeper checks if the MRO Change request Completed (R):
mine item matches all criteria. If the item for MRO item change request Gatekeeper
material has passed this test, the item will be material article for MRO item
article ca- added to/modified in/deleted from the catalog material article (I):
talog material article catalog. If it is added it catalog Catalog man-
action will receive a material article catalog ager
number.
To check implications on design, pro-
cess and SHE-aspects the
Management of Change procedure
will be followed. The catalog manager
starts this procedure.
Ref. Example:
item

el 2
1.2.6 Change The catalog manager performs the Completed Updated mate- (R):
item in formal addition, deletion or modifica- change request rial article Catalog man-
material tion step to the material article for MRO item catalog, For an ager
article catalog. and approval addition a mate-
catalog from the Man- rial article
Ref. Example: agement of catalog number
Annex 2.4 Change request for MRO Change proce- for the MRO
item catalog dure. item, with the
description, sup-
plier, criticality
and delivery
time.
1.2.7 Inform re- The requestor is informed of the out- Completed The requestor is (R):
questor come of the request. change request informed with Catalog mana-
Options are 1) material article catalog for MRO item. the outcome of ger
number assigned to the item, or 2) the request.
the item has been identified in the (I):
material article catalog (or as an al- Requestor
ternative) or 3) it has not been
qualified.
Ref. Example:
4.2 Logistics Concept Management
4.2.1 Level 2 main activities description step 2: “Logistics Concept Management”
2.1 Categorize MRO items

2.2. Check global contract
2.3. Define logistic concept
2.4. Develop, Modify and implement SLA logistic concept
4.2.2 Input-Output “Logistics Concept Management”
4.2.3 Level 3 description tables for activity 2: Logistic Concept Management

el 2
2.1.1 Define Follow ME06: The reliability engineer Data and infor- Criticality de- (R):
2.1 Categorize MRO items
criticality determines the criticality (A/B/C) of mation regarding fined item Reliability En-
of MRO sections/equipments. The determina- risks related to conform IER gineer
item tion of the appropriate optimal PPM the MRO-item guidelines
program (via: Basic maintenance pro- (ME6). (I):
gram for C, typical FMEA for B and full Maintenance
FMEA for A equipment) provides the Specialist,
direction of the criticality of the MRO MRO manager
item. Is the MRO-item required (criti- Requestor.
cal) to reduce the risk level to an
acceptable level or not?
Remark: The criticality of the MRO

item should be documented (e.g. in
M3 excel support tool documented as
“yes” or “no” – In case of utilizing SAP
– the criticality of the item should be
documented in SAP – minimum re-
quirement is to label the critical MRO-
items)
Ref. Examples:
Annex 2.6 Define MRO Category (in 3
steps – Criticality + Market Availability
→ calculated MRO segment)
Annex 11: M3 Excel support tool

el 2
2.1.2 Define re- The Reliability Engineer bases the re- IER data MRO Required lead (R):
quired quired lead time on the maintenance item and the in- time for the item. Reliability En-
lead time concept (ME06). The functional dis- formation on the gineer
turbances results in lead time for the equipment
parts when the equipment is turned where the part is (I):
over for repair and the part is needed used for. MRO man-
for rebuilt. ager,
Maintenance
Ref. Examples: Specialist,
Annex 2.3 IER data MRO item Requestor.
2.1.3 Define ac- The MRO manager determines the Request for Actual delivery (R):
tual delivery time from the supplier(s) in MRO item (ac- time for the MRO manager
delivery the market. tual need); MRO item
time sup- Important is to ascertain if the part is: (I):
plier - manufactured by the OEM Request for Who are the Maintenance
- from another source (the manufac- MRO item (secu- supplier(s) Specialist,
turer sub assembles) and multiple rity of supply). Purchasing
suppliers Delivered from Manager,
- made to order stock and loca- Reliability En-
- delivered from stock. If it is delivered tion of the stock. gineer,
from stock where the stock is located. Requestor.
Ref. Examples:
Annex 2.5 Market Availability data
MRO item
2.1.4 Define The MRO manager determines the ra- Required lead Market Availabil- (R):
market tio between required lead time and time and Actual ity ratio of the MRO manager
availabil- actual delivery time. delivery time of MRO item.
ity If the market availability ratio is larger the MRO item (I):
then 1(actual delivery time < required), Maintenance
then the item is available in the market Specialist,
and delivery time is not an issue. If the Reliability En-
market availability ratio is less then 1 gineer,
(Actual delivery time > required), than Requestor.
delivery time is an issue.
Ref. Examples:
Annex 2.5 Market Availability MRO
item
2.1.5 Define Based on the item criticality and mar- Criticality con- MRO category (R):
MRO cate- ket availability 4 MRO categories can form IER assigned to the MRO man-
gory be distinguished: Strategic items (Crit- guidelines MRO item. ager,
ical/non available), Critical items Market Availabil-
(Critical/available), Non-critical items ity ratio of the (C) Reliability
(Non Critical/non available), Consum- MRO item. Engineer
ables (Non Critical/available). The
decision on where the item is posi- (S+I):
tioned is a team effort. Maintenance
Specialist,
Remark: The MRO category for the Requestor.
item should be documented (in M3 ex-
cel support tool or in other system)
Ref. Examples:
item
Annex 2.6 Define MRO Category
Annex 11: M3 Excel support Tool

el 2
2.2.1 Check The MRO manager checks whether Request for A supplier under (R):
2.2 Check global contract
global there is a supplier which can put the MRO item; global contract MRO manager
contract item on a global contract or that it al- that can accept
and local ready is under contract. If a supplier Market Availabil- the MRO item or (I):
implemen- has been found, the local implementa- ity MRO item that the MRO Discipline
tation tion and security of supply is validated Global contract item does not fall Team
together with the Discipline Team information. under an exist- manager,
Manager (= global category manager) ing global Maintenance
and the Requestor. PtP (step P-050- contract. Specialist,
020 Define Ma- Reliability En-
Ref. Examples: terial gineer,
Annex 2.1/2 Request for MRO item Specifications; Requestor.
Annex 2.5 Market Availability MRO P-050-050/060
item Identify Potential
Suppliers)
2.2.2 Contract If the MRO item is available on a Request for A choice (R):
applica- global contract the MRO manager MRO item whether the MRO manager
ble? checks that the delivery time fits within MRO item can
the Service Level Agreement (SLA). If Market Availa- be put on a (I):
this is the case the global contract will bility MRO item. global contract Maintenance
be used (the scope needs to be modi- or that a logistic Specialist,
fied, 2.4.1). concept route is Reliability En-
If the MRO manager can not find a followed for Stra- gineer,
suitable global contract, then a logistic tegic items, Requestor.
concept route (selection see 2.3.1) is Critical items,
followed according to the defined Non-critical
MRO category items, Consuma-
bles.
Ref. Examples:
item
2.3.1 Define lo- Define in function of the MRO cate- Request for Checked and (R): MRO
2.3 Define Logistic Concept
gistic gory the preferable logistic concept: MRO item validated logisitic manager
concept Strategic MRO: concept
- Driver: Security of supply Market availa- (I): Mainte-
- Concept: Consignment stock bllity MRO item nance
(pay when we use) or Own Stock specialist, Re-
Critical MRO: MRO category liability
- Driver: Security of supply & Cost engineer, Re-
and efficiency questor
- Concept for MRO with frequent
use: Ensure Stock at preferred
supplier or own stock if this is
more efficient
- Concept for MRO with irregular
use: Ensure Stock at preferred
supplier or order when needed
Non-critical MRO:
- Driver: Cost and efficiency
- Concept: No stock, order when
needed
Consumables:
- Driver: Cost and efficiency
- Concept for MRO with frequent
use: Vendor Managed Inventory /
Vendor Owned Inventory (Vend-
ing machines)

el 2
- Concept for MRO with irregular
frequent use: No Stock, order
when needed
Ref Examples:
item
Annex 3: Logistic concepts
2.4.1 Develop/ If a global contract has been identified A global contract A proposal for or (R):
2.4 Develop, modify and implement SLA logistic concept
Modify on which the MRO item can be on which the a modified MRO manager
SLA (con- sourced, the SLA will be modified ac- MRO item can SLA/Contract
tract) cordingly (if DSM and supplier agree). be put on (I):
Otherwise the different (local) logistic or checked and PtP (step P-050- Lead Buyer
concepts will be evaluated on perfor- validated logistic 210 Negotiate
mance and financial merits by the concepts for the Terms and Con-
team to ensure the optimal choice. MRO item. ditions; P-050-
Based on the choice a SLA will be de- 220 Choose
veloped with the supplier or external Supplier; P-050-
logistic partner (Can be in the form of 250
a contract). Create Service
Level Agreement
Ref. Example: (or contract with
Annex 4 Service Level Agreement ex- supplier)
ample
2.4.2 Implement If the SLA has been modified or a new An approved An implemented (R):
SLA logis- SLA has been approved, the concept proposal for or a SLA. MRO manager
tic needs to be implemented. The MRO modified SLA. An updated in-
concept manager takes the lead, but the team formation (I):
needs to carry out all the necessary system. Maintenance
activities to make it a success. Correct stores Specialist,
Implementing consists of the following amounts on the Lead Buyer,,
steps: Kick off, inventarization, Com- right location. Reliability En-
munication and instruction of key Informed and gineer,
users, Re-location of stores (if neces- trained key us- Requestor.
sary), Completing information in the ers.
Stores Management System.
Ref. Example:
Annex 4 Service Level Agreement ex-
ample
2.4.3 Charge The lead buyer charges the cost asso- An implemented Charge bill to the (R):
SLA re- ciated with the SLA to the item SLA. item owner. Lead Buyer
lated owner(s). SLA performed
costs according to (I):
Ref. Example: agreement Item owner(s),
Annex 6.2 Charge SLA related cost (value for the MRO man-
contract). ager.
4.3 Inventory management
4.3.1 Level 2 main activities description step 3: “Inventory Management”
3.1. Define stock policy

3.2. Stock evaluation and control
3.3. Order entry
3.4. Maintain inventory levels
3.5. Order administration
3.6. Distribution Management
4.3.2 Input-Output main step 3 “Inventory Management”
4.3.3 Level 3 description tables for activity 3 “Inventory management”
Lev Level 3 Steps Step description Input Output RASCI

el 2
3.1.1 Deter- MRO manager determines the method of MRO category: Chosen Inven- (R):
3.1 Define stock policy
mine controlling inventory ( how to order items Criticality con- tory model (how MRO manager
inventory for inventory) form IER to order items
model Actual demand based on maintenance guidelines for inventory) (I): -
and operational plan is sourced directly. Market Availabil-
ity ratio of the
Ref. Example: MRO item.
Annex 5 Determine inventory model
Remark: Annex 5 provides preferable
methods/model (when no outsourcing
can be done) to order items for the differ-
ent MRO categories (the practicable
application depends on how the CMMS
is organized.
3.1.2 Deter- MRO manager determines within SLA MRO category MRO item (R):
mine (this is leading) and MRO category SLA for MRO stored decentral, MRO manager
storage where to store or warehouse the MRO- item. central or at ven-
location item (decentral, central or at vendor/OEM/ (I): -
dor/OEM/supplier). supplier).

el 2
Ref. Example.:
Annex 5.1 Inventory model - storage
3.1.3 Deter- MRO manager and warehouse supervi- MRO category EOQ (Economic (R):
mine sor define criteria that influence the Delivery time Order MRO manager
inventory inventory level as re-order point (= mo- Average usage Quantity)
parame- ment for replenishment), order quantity, over time minimum level (I):
ters max. inventory level. Safety stock (de- maximum level Maintenance
Minimum level is dependent on average pending on over review period Specialist,
usage during the period from ordering to usage and de- (based on us- Warehouse
delivery and a safety stock (to make sure lays in delivery). age) Supervisor.
that sudden extra usage or delays in de- shelf life
livery can be bridged). FI FO
Ref. Example:
Annex 5.2 Inventory model - inventory
parameters
3.1.4 Deter- The MRO manager determines the re- MRO category Analyze periods (R):
mine view periods when the cycle count Initial calcula- for: MRO manager
inventory (physical inventory check), shelf-life and tion/guess of usage (abc)
evalua- usage (abc) analysis will be done. usage. cycle count (I): -
tion
proce- Ref Example:
dure Annex 5.3 Inventory model - inventory
evaluation
Annex 11: M3 Excel Support Tool
3.2.1 Cycle Warehouse employee checks whether Trigger to review Actual inventory (R):
3.2 Stock evaluation and control
count – the physical inventory (on the shelf) is Actual (Physical) (on the shelve). Warehouse
Inventory the same as the administrative inventory inventory Administrative Supervisor
balance (in the system) at the appropriate review (on the shelf) inventory (in the
ok? period (as determined in 3.1.4). If this is Administrative system). (S): Ware-
not the case it will be adjusted in 3.2.2. inventory (in the Outcome of in- house
The amount of correct data will be re- system). ventory: When employee
viewed in 3.2.5/5.1.1. physical and ac-
tual are the (I):
same= correct Warehouse
inventory. manager,
When physical Controller
and actual are
not the same =
incorrect inven-
tory.
3.2.2 Adjust in- The Warehouse supervisor informs and Differences be- Correct inven- (R):
ventory ask the controller to adjust the actual tween Actual tory in Controller
balance amount according to the physical amount (physical) inven- administrative
counted. tory (on the system (I):
shelf) and Deviations are Warehouse
Ref. Example: Administrative communicated manager
Annex 10 MRO stock value inventory (in the to all relevant
system). stakeholders
(conform local
audit rules and
procedures).
3.2.3 Evaluate Warehouse employee checks if the item Trigger to evalu- Evaluated item (R):
shelf-life has not exceeded it's shelf life longevity ate shelf life. on shelf life. Warehouse
(usable duration, product related). If shelf Employee
life has expired, the scrap procedure will
be started (3.2.4). The amount of correct (I):
data will be reviewed in 3.2.5/5.1.1. Warehouse
Supervisor

el 2
3.2.4 Deter- The warehouse supervisor propose what Item has ex- Validated deci- (R):
mine and to do with the item, share, sell or scrap. ceeded it's shelf sion to share, Reliability En-
arrange The final decision to share, sell or scrap life/is in ex- sell or scrap the gineer or item
share/sell is made by the Reliability Engineer(s) cess/is dead item. Deviations owner
/scrap who is (are) accountable for the perfor- stock. are communi-
mance of the plant(s). The warehouse cated to the (S): Ware-
supervisor informs the controller to adjust financial depart- house
the system accordingly. ment (conform supervisor
local audit rules
Ref.: and procedures) (I): Controller
Annex 9 Sell/Share/Scrap evaluation
3.2.5 Evaluate Warehouse supervisor: Trigger to evalu- Evaluated/ad- (R):
/adjust - reviews the EOQ (Economic Order ate inventory justed item Warehouse
average Quantity), minimum level (safety stock), levels. on share/sell/ Supervisor
inventory maximum level and usages for devia- scrap, inventory
level, in- tions. parameters and (I): MRO man-
ventory - based upon analysis determines dead storage location ager, reliability
parame- stock (not used → go to 3.2.4) or excess engineer
ter, stock (# items above maximum level)
storage If these have taken place, analysis on (C): in case of
location the cause needs to be done (e.g. peak adjust inven-
and in- usage due to a TA, supply issues). tory
ventory - Evaluates and adjusts the inventory pa- parameters –
model rameters, the storage location and the operational
inventory model based upon the usage controllers
(abc) analysis, deviations of usages
and/or delivery times
Ref. Example:
Annex 5 Determine inventory model
Annex 5.3 Inventory model - inventory
evaluation
3.3.1 Select The requestor selects the item needed Amount needed Selected item (R):
3.3 Order entry
from the from the material article catalog. If the Description of from the material Requestor
material item is not in the catalog, the item will be the item needed article catalog.
article sourced on the market. Supplier Price Suppliers item (I): -
catalog Request with number.
Ref. Example: - Annex 2.1. complete data Amount in a
supplied order
quantity.
(PtP step P-070-
035 Check if
material exists)
3.3.2 Ordering The requestor makes a purchase request Selected item Ordered MRO (R):
MRO- so item can be ordered at the supplier from the material item at supplier. Lead Buyer
item at article catalog or Information to
Supplier Ref. Example: from the market. requestor - item (I): Requestor
Annex 4 Service Level Agreement exam- Suppliers item is ordered at
ple number supplier, con-
Amount in a form requested
supplied order delivery time
quantity. (M). PtP (step P-
080/100-030)
3.3.3 Ordering The requestor request the item at a DSM Selected item Stock order at (R):
MRO- Stores Location. The warehouse allocate from the material DSM MMM de- Warehouse
item at the requested item to the requesting de- article catalog partment. employee
DSM partment. item number
(own) Amount in a (I): Requestor

el 2
Stores supplied order
Location Quantity mate-
rial article
catalog number.
Reservation via
a maintenance
order
3.4.1 Check in-The warehouse employee checks in the Stock order ma- Amount availa- (R):
3.4 Maintain inventory levels
ventory inventory control system, the inventory terial article ble at storage Warehouse
at DSM level for the specific MRO item over all catalog number locations at the Employee
site (Re-storage locations at the specific DSM Amount in a specific DSM
quired site. supplied order site (I):
MRO item If the required item is in stock a pick or- quantity. Stock order - Warehouse
in stock der is dispatched (3.4.2). If it is not on status ordered. Supervisor
on-site?)stock the employee checks the inventory
at other sites (3.4.7)
3.4.2 Dispatch The warehouse employee dispatches a Amount availa- Pick order. (R):
pick or- request for MRO items to be placed in a ble at storage Warehouse
der blue bin (or kitting cart or staging area) locations at the Employee
for the scheduled work order. specific DSM
site (I):
Stock order ma- Warehouse
terial article Supervisor
catalog number
Amount in a
supplied order
quantity
Delivery date
and time.
3.4.3 Adjust in- The warehouse employee adjusts the in- Amount availa-
Stock order - (R):
ventory ventory status to reserved stock. ble at storage
status reserved Warehouse
status The warehouse supervisor lets the re- locations at the
stock Employee
(reserved questor know that the item is available at specific DSM
Information to
stock) the asked delivery time and in the correct site requestor, (I):
amount. Stock order ma-
acknowledge- Requestor
terial Article
ment of the
REMARK: With a CMMS, this can be au- catalog number
order and
tomatically done Amount in aagreed delivery
supplied order
time and correct
quantity. amount (reser-
vation)
3.4.4 Check in- The warehouse employee checks for the Trigger to check Administrative (R):
ventory MRO items in the inventory control sys- the actual inven- inventory (in the Warehouse
level tem if administrative inventory level after tory (after system). Employee
the reservation has been deducted gets deducting the re- Replenishment
below the minimum inventory level. served stock). order if adminis- (I):
If this is the case a replenishment order trative level < Warehouse
is created, for the expected delivery the minimum level. Supervisor
receipt is scheduled (4.1.1)
If the administrative level is above the
minimum level nothing is done.
REMARK: With a CMMS, this can be au-

tomatically done
3.4.5 Except- The warehouse supervisor/requestor de- Amount availa- Transportation (R):
ional termines if exceptional transportation on ble at storage schedule. Warehouse
transpor- or to DSM site is necessary. locations (cen- Supervisor
tation tral and

el 2
neces- decentral) at the (I):
sary? specific DSM Requestor
site
Stock order
material article
catalog number
Amount in a
supplied order
quantity.
3.4.6 Consult If the requested MRO item is not availa- MRO stock or- Checked availa- (R):
other ble in own stock the warehouse der bility at other Warehouse
DSM supervisor can consult other DSM sites/ Material article sites. Supervisor
sites on stores for availability/ lead time of re- catalog number Stock order - or-
availabil- quested MRO item (e.g. via phone, mail, Amount in a dered at another (I):
ity MRO network, etc.) - PtP (step P-070-140 supplied order site MRO manager
item Check stock level at other plants) quantity Information to Requestor
If delivery is acceptable the item can be requestor - item
ordered at another site. PtP (step P-070- is ordered at an-
150 Assign to Purchaser; P-080-040 Re- other DSM site,
lease Plant to Plant transfer) conform re-
quested delivery
time, acknowl-
edgement of the
order and
(agreed) delivery
time and correct
amount (reser-
vation).
3.4.7 Check The MRO manager, lead buyer and re- Stock order Adapted amount (R):
other op- questor work closely together to find a Material article in a supplied or- MRO manager
tions if solution for the item. This could result in catalog number der quantity
MRO item e.g. a different amount, another lead time Amount in a Adapted lead (I):
is not or alternatives like second hand pur- supplied order time Maintenance
available chase, revision or requests with quantity Alternative or Specialist,
in own sister/neighboring Plants. The MRO Availability and similar material Lead buyerr,
stock – manager consults with the requestor if lead time. article catalog Requestor.
other the proposed solution is acceptable. number
sites Alternatives not
Ref. Example: described in the
Annex 2.7 Alternatives for MRO item catalogs, second
hand purchase,
revision or re-
quests with
sister/ neighbor-
ing plants.
Agreement on
the solution
3.4.8 Inform re- If there are no options available the MRO Agreement on Informed re- (R):
questor manager informs the requestor of the the solution = questor. MRO manager
of non non-delivery. no. Information to
delivery requestor (I):
Ref. Example: - item cannot be Requestor
Annex 2.7 Alternatives for MRO item ordered, con-
form requested
delivery time.

el 2
3.5.1 Charge The warehouse employee bills the Amount supplied Billed item. (R):
3.5 Order administration
order re- user/requestor for a MRO item. Stock order Warehouse

lated cost In case of scrap/sell this means that an Material article Employee
invoice is sent. catalog number
Remark: With CMMS system (e.g. SAP) Cost Account of (I):
this will be done automatically. user/requestor. Warehouse
Supervisor
Ref. Example:
Annex 6.1 Charge order related cost
3.6.1 Schedule The warehouse employee schedules and Amount availa- Transportation (R):
3.6 Distribution management
and pre- prepares the transportation to insure ble at storage order request Warehouse
pare timely delivery at the requested location.
locations (cen- Employee
transpor- The requestor is consulted how the item
tral and de- Transportation
tation will be received and if special circum-
central) at the order.. (I):
stances are present. specific DSM Requestor,
The request for transportation is pro-site Warehouse
cessed by purchasing and a Stock order Supervisor,
transportation order is issued. Material article lead buyer
catalog number
Amount in a
supplied order
quantity
Transportation
schedule
Delivery date
and time.
3.6.2 Tracking The warehouse employee monitors the Transportation Monitored (R):
and trac- location of MRO-supply during transpor- order transport. Warehouse
ing tation. Scheduled deliv- Deviation control Employee
ery time. on delivery time.
(I):
Requestor,
Warehouse
Supervisor.
4.4 Store & Supply Goods
4.4.1 Level 2 main activities description step 4: “Store & Supply Goods”
4.1. Inbound goods

4.2. Goods storage
4.3. Outbound goods
4.4. Distribution
4.5. Return goods
4.4.2 Input – Output main step 4: “Store & Supply Goods”
4.4.3 Level 3 description table for activity 4 “Store & Supply Goods”

el 2
4.1.1 Schedule The warehouse supervisor schedules Scheduled deliv- Schedule for (R):
4.1 Inbound Goods
receipt ac- in time when receipt activities (admin- ery time. stores personnel Warehouse
tivities istration, unloading, inspection) have who are needed Supervisor
to be executed. for receiving.
(I): -
4.1.2 Check ship- The warehouse employee verifies Purchase order Ordered items (R):
ments whether the delivery (item and docu- Shipment of with purchase Warehouse
against ments) matches with the order, checks MRO items order. Employee
purchase transportation documents and regis- Actual delivery Checked trans-
orders ters the delivery. date portation (I):
Ordered item. document. Warehouse
Registered deliv- Supervisor,
ery date. Field planner
PtP (step P-120-
030 Validate
BOL against
shipment re-
ceived)

el 2
4.1.3 Shipment The warehouse employee checks Ordered items Matched item (R):
matches whether the shipment matches the with purchase with purchase Warehouse
PO? purchase order. order order. Employee
Checked trans- Checked item
portation for correct bar- (I):
document code and with Warehouse
Registered deliv- DSM item code. Supervisor
ery date
Including partial
delivery = yes
DSM code on
Barcode label
from supplier.
PtP (step P-120-
030 Validate
BOL against
shipment re-
ceived)
4.1.4 Process Update administrative inventory and Matched item Administrative (R):
documents store certificates. with purchase inventory level Warehouse
and adjust order. adjusted - status Employee
inventory received/not in-
level spected. (I):
Certificates Warehouse
stored. Supervisor
4.1.5 Perform- Warehouse supervisor follows the de- Requested Vendor rating. (R):
ance livery performance (delivery reliability amount & deliv- PtP (Step P-040 Lead Buyer
measure- and delivery time) for the purpose of ery date Maintain Sup-
ment vendor rating (informs Lead Buyer) Actual amount & plier Certification (S): Ware-
The vendor rating is performed under supply date and Monitor Per- house
responsibility of the Lead Buyer. Documents con- formance; supervisor
form P-090-010
Ref. Example: agreements Schedule (I): MRO man-
Annex 7 Performance measurement Perf./020 Cost ager
Perf. /030
Techn. Perf./040
Monitor Report-
ing Require-
ments and Man-
age Supplier
Contracts)
4.1.6 Unload and Warehouse employee unloads the Matched item Inspected and (R):
inspection items and checks if the delivered with purchase unloaded item. Inspector
MRO-item and document meets speci- order PtP (step P-120-
fications as mentioned in the order. Inspection re- 040 Unload Ma- (I):
quirements terial; -050 Warehouse
Ref.: conform SLA. Inspect Material Employee,
Annex 5.2 Inventory model storage for damage/prior Warehouse
to receipt; -250 Supervisor.
Remark: Inspector role needs to be Transfer Mate-
defined at the part level, this can be rial to Quality
the warehouse employee, mainte- Inspection
nance specialist, specialist or notified Stock)
body personell depending on the type
of inspection/certification that needs to
be done

el 2
4.1.7 Quality The inspector verifies that the require- Inspected and Inspected item (R):
conform ments conform the SLA are met, if this unloaded item conform SLA Inspector
SLA? is the case inventory status is changed Matched item with status - in
(4.1.8). If the requirements are not met with purchase stock (I):
the item is stored in a separate store- order PtP (step P-120- MRO Manager
room (4.1.9). Inspection re- 080/085/100/130
quirements /120 Receive
Material) or re-
jected item with
status - rejected
PtP (step P-120-
060 Receive
damaged
goods/-070 File
shipping claim).
4.1.8 Adjust in- Warehouse employee adjusts the in- Inspected item Inspected item (R):
ventory ventory status in the Inventory conform SLA conform SLA Warehouse
status (in Management system to in stock. With with status - in with status - in Employee
stock) this status change the finance depart- stock. stock (in the
ment receives agreement for payment CMMS system) (I):
of the purchase order (whole or par- Agreement for Controller,
tial). payment Requestor,
PtP (step P-080- Warehouse
150 Receive Supervisor.
ASN)
Information to
requestor - item
is received and
of good quality
(M, LCP, TA,
SP).
4.1.9 Rejected The warehouse employee stores the Rejected item Rejected item in (R):
items: rejected MRO supply in a physical with status - re- a physical sepa- Warehouse
Store in separate room/area to avoid mixing-up jected. rate store room. Employee
separate with not-rejected MRO PtP (step P-120-
store Warehouse employee adjusts the in- 200 Move Mate- (I):
room/area ventory status in the Inventory rial to holding Warehouse
and adjust Management system to rejected. With location) Supervisor,
inventory this status change the finance depart- Rejected item controller
status (re- ment receives a no-agreement for with status - re-
jected) payment of the purchase order (whole jected (in the
or partial). Inventory Mana-
gement system)
No-Agreement
for payment.
PtP (step P-080-
?)
4.1.1 Inform ven- The MRO manager informs the vendor Rejected item Non-conformity (R):
0 dor about that the item was not delivered and/or with status - re- letter to the MRO manager
noncon- documents as ordered in usable condi- jected. vendor.
formity tion. The MRO manager informs the Return shipment (I):
vendor that delivered goods are re- to the supplier. Requestor
jected and should be taken back. PtP (step P-090-
Before the item is sent back the re- 050 Identify is-
questor is consulted. sues with
suppliers; -060
Corrective Ac-
tions; P-120-210

el 2
Resolve Dis-
crepancies)
PS central sys-
tem for Non
Conformities
4.2.1 Determine The warehouse employee checks if Matched item Location of (R):
4.2 Goods Storage
goods stor- the item needs to go directly to the with purchase bin/shelf in the Warehouse
age point - plant drop of point. If this is the case it order warehouse of Employee
bin/shelf lo- is put in a blue bin or in a staging area Part number/Lo- storeroom.
cation (4.3.3), cation (I): -
otherwise warehouse employee deter- combination (in
mines the location where the MRO- Inventory Man-
supply can be stored, in the ware- agement
house or storeroom. system).
4.2.2 Storage Warehouse employee stores the Matched item Stored item (R):
MRO-item at the store or warehouse at with purchase Checked item Warehouse
the correct location. order. for bar-coding. Employee
Warehouse employee checks whether Location of
the item has been correctly bar-coded, bin/shelf in the (I): -
to insure quick retrieval. warehouse of
storeroom.
4.3.1 Schedule The warehouse supervisor schedules Scheduled deliv- Schedule for (R):
4.3 Outbound Goods
picking ac- in time when picking activities have to ery time for stores Warehouse
tivities be executed. MRO-item to the personnel who Supervisor
requestor. are needed for
picking. (I): -
4.3.2 Determine The warehouse employee determines Scheduled deliv- (Cluster of) pick (R):
pick loca- in the inventory management system ery time for order(s) (docu- Warehouse
tion where the requested MRO item is MRO-item to the ment with Employee
stored and can be picked. requestor. location and
Schedule for amount to be (I): -
stores personnel picked).
who is needed
for picking.
4.3.3 Pick MRO Warehouse employee picks the MRO (Cluster of) pick Picked MRO (R):
item and item order(s) (docu- item. Warehouse
store in box ment with (Combined) Employee
or staging The warehouse employee puts (all) location and MRO-item(s)
area MRO items from one work order in a amount to be from one work (I): -
box (blue bin). The items are stored in picked). order in a box
a separate store-location in the ware- (blue bin) ready
house or storeroom where outgoing for transporta-
MRO-supply is stored before transpor- tion or retrieval.
tation (staging area).
4.4.1 Process Warehouse employee prepares the (Combined) Delivery docu- (R):
4.4 Distribution
documents necessary documentation for the out- MRO-item(s) ment (where Warehouse
and adjust going MRO-items. The inventory from one work and when) Employee
inventory status is adjusted to - in transportation. order in a box Documentation
level (in (blue bin) ready of the MRO-item (I):
transporta- for transporta- (e.g. certificates Warehouse
tion) tion or retrieval. for items under Supervisor
operating li-
cense)
MRO-item status
to - in transpor-
tation.

el 2
4.4.2 Loading The warehouse employee takes care MRO item (in a Transported (R):
and of the loading, transport and unloading blue bin) in the MRO-item to the Warehouse
transport (if of the MRO-item at the requestor, staging area plant drop of Employee
applicable) buyer or the place where the material Delivery docu- point, sales or
is scrapped. ment (where and scrap location. (I): -
when).
4.4.3 Handover The warehouse employee hands the MRO item (in a MRO-item deliv- (R):
to reques- MRO-item over to the requestor. With blue bin) ered to the Warehouse
tor the physical receipt of the requested Delivery docu- requestor Employee
MRO item at point of delivery and the ment (where and Handover for job
sign off of the delivery document the when) (M, LCP, TA, (I):
acceptance of delivery is completed. Documentation Pre TA Exec., Requestor
of the MRO-item SP)
Ref. Example: (e.g. certificates Delivery doc.
Annex 8 Handover/commissioning for items under (where and
operating li- when) signed of
cense). by requestor.
(Best practice is
barcode/swipe
card identifica-
tion)
PtP (step P-120-
300)
4.4.4 Handover The warehouse employee hands the MRO item (in a MRO-item deliv- (R):
to buyer or MRO-item over to buyer or the receiv- staging area) ered to the Warehouse
Scrap ing party (scrap). With the physical Delivery docu- buyer or receiv- Employee
receipt of the requested MRO item at ment (where and ing party
point of delivery and the sign off of the when). Delivery docu- (I):
delivery document the acceptance of Documentation ment (where and Requestor
delivery is completed. of the MRO item when) signed of
(e.g. certificates) by the receiver.
Ref.:
Annex 8 Handover/commissioning
4.4.5 Adjust in- The warehouse employee brings the Signed delivery Charge of cost (R):
ventory physical and administrative inventory documents of the item to the Warehouse
level in balance. With this action also the (where and cost account of Employee
cost of the item are charged to the cost when) the requestor.
account of the requestor, buyer or MRO-item/Cost/ Information for (I):
scrap receiving party. Cost Account in- evaluation and Controller Re-
It also triggers information for evalua- formation (from improve. questor,
tion and improve. Inventory Man- Warehouse
agement Supervisor.
system).
4.5.1 Return In this step items not used for intended MRO-item Inspected item (R):
4.5 Return Goods
goods in- work on work orders, shutdowns or Work order with associated Inspector
spection projects are returned to the stores. (from CMMS material article
Also broken items (repairables) which system) catalog number (I):
need to be repaired are brought in. Documentation for storage. Maintenance
The inspector checks if the delivered with the relation Specialist
MRO-item and document meets speci- to the item and
fications as mentioned in the the material arti-
(work)order. cle catalog
number (in the
CMMS system).
4.5.2 Is it a stock The warehouse supervisor verifies that Inspected item Determination (R):
item and is the item is a stock item. If item is not a with associated on-stock or non- Warehouse
there a stock item it is processed further material article stock. Supervisor
(4.5.3), if item is non-stock it is catalog number

el 2
need for re- returned to the party supplying/offering for storage (I):
supply? the return goods or it is determined Catalog num- Inspector,
how/what to sell or scrap (4.5.8). ber/stock MRO man-
The warehouse supervisor decides information. ager.
whether the MRO-item is put on stock.
If this is the case further testing for
quality conform SLA (4.1.7).
4.5.3 Is item bro- The inspector determines if the stock Stock item. MRO-item in- (R):
ken? item is broken and if it can be repaired. spected for Inspector
functionality
Broken item in warranty (4.5.4 and (broken yes/no). (I): -
4.5.5)
Broken item (4.5.6 and 4.5.7)
Sell/scrap (4.5.8)
4.5.4 Is it a war- The inspector checks if the warranty Broken stock Determination (R):
ranty item? period of the MRO-item has expired. If item. whether the item Inspector
it is not under warranty or was rejected is under war-
from the warranty claim the decision to ranty (I):
repair needs to be made (4.5.7). Broken MRO- MRO Mana-
If the item is under warranty it is item thought to ger,
stocked in a separate storeroom/area be under war- Purchasing
ranty, status - in Manager.
Ref. Example: repair under
Annex 2.2 Request for MRO item (ad- warranty or
ditional data for a not described item); Broken stock
Annex 2.5 Market Availability MRO item , status - in
item; repair (non war-
Annex 2.8 Warranty data MRO item ranty).
4.5.5 Stock in The warehouse employee stores the Broken MRO- MRO-item goes (R):
separate rejected MRO supply in a physical item thought to through Pur- Warehouse
store room separate room to avoid mixing-up with be under war- chase Process Employee
not-rejected MRO supply. The infor- ranty, status - in Warranty man-
mation about the item and the claim on repair under agement if it is (I):
warranty is send to Purchasing for fur- warranty. accepted and is Warehouse
ther processing. repaired, the Supervisor
item will re-enter
at step 4.5.1; if it
is not accepted
under warranty
(status rejected
from warranty
claim) follow up
is performed at
step 4.5.4.
4.5.6 Is item re- The inspector determines whether the Broken stock Decision to re- (R):
pairable? item is repairable. Checks are made item, status - repair the item Inspector
for technical necessity and cost-effec- pair (non (yes/no)
tiveness of repairables (rotables). If the warranty) Stock item, sta-
items are technically complex or the in- Work order tus - in repair (I):
spector can not make a sound (form CMMS (non warranty) MRO mana-
decision a specialist is consulted. system). or status - ger,
sell/scrap Warehouse
Non-replenish- Supervisor,
ment of Specialist
inventory (in
CMMS system)
(if MRO part can
be repaired).

el 2
4.5.7 Requisition The warehouse employee creates a Stock item, sta-
Stock item, sta- (R):
for repair requisition for repair and adjust the in- tus - repair (non
tus - repair (non Warehouse
and adjust ventory status. warranty) warranty). Employee
inventory Hand over to Requisition for
(status in Ref. Example: Maintenance repair. (I):
repair) Annex 2.2 Request for MRO item (ad- work process Exchange of in- MRO man-
ditional data for a not described item); (M) for repair. formation to ager,
Annex 2.8 Warranty data MRO item; Inventory Man- Specialist.
Annex 2.9 Repair data MRO item agement not to
order item (will
be repaired).
Hand over to
Maintenance
work process
(M) for repair.
4.5.8 Determine The warehouse supervisor determines Stock item, sta- Determination to (R):
and ar- whether to sell or scrap the item. For tus - sell/scrap. sell or scrap Warehouse
range capital items he consults the item Information to in- supervisor
sell/scrap owner(s). ventory
If part can't be repaired, inventory management (I):
management must be informed that a that a new item Purchasing
new item can be purchased. can be pur- Manager,
chased (if the MRO Man-
Ref. Example: part can't be re- ager,
Annex 9 Sell/Share/Scrap evaluation paired). Item Owner,
Warehouse
Supervisor.
4.5 Evaluate & Improve
4.5.1 Level 2 main activities description step 5: “Evaluate & Improve”
5.1. Evaluate & Improve
4.5.2 Input – Output main step 5: “Evaluate & Improve”
4.5.3 Level 3 description tables for activity 5 “Evaluate & Improve”
Lev Level 3 steps Step description Input Output RASCI

el 2
5.1.1 Measure A multifunctional team periodically Complaints (not Analysis on the (R):
5.1 Evaluate & Improve
perform- measures the performance of the in time, wrong MRO Materials MRO manager
ance MRO MRO material management process. material/qual- Management
process The team exists of representatives of ity/documents, performance. (I):
different work processes, service level wrong location); MRO improve-
agreement partners and from various Delivery time ment team
discipline teams. (actual versus
ordered, exclud-
Ref. Example: ing
Annex 7 Performance measurement replenishment);
Cost for stock
keeping and dis-
tribution; Dead
stock; Stock
value vs. RAB;
Stock items with
unknown loca-
tion; etc.
5.1.2 Analyze The multifunctional team performs Analysis on the Improvement ini- (R):
perform- analysis on the data. MRO Materials tiatives. MRO Manager
ance SLA In case of non-performance the team Management Bonus for good
needs to define improvement initia- performance. SLA perfor- (I):
tives. mance MRO improve-
ment team
Ref.Example:
Annex 7 Performance measurement
Lev Level 3 steps Step description Input Output RASCI

el 2
5.1.3 Define im- The multifunctional team has defined Improvement ini- Prioritized and (R):
prove- improvement initiatives to improve the tiatives. defined action MRO manager
ment non-performances. items (who, what
agenda To actionize this, priority is estab- and when ac- (I):
lished and action items are defined complished). MRO improve-
who will do what and when theses ac- Based on the ment team
tions are to be accomplished. measurement
and analysis
supplier delivery
data are fed
back into collect
MRO data.
5 Performance indicators
A large number of KPI’s has been defined in the annexes in this manual. To effectively focus, select for the ap-
propriate area on each process 2-3 per process (for more detailed indicators see Annex 7)
Examples of KPI’s
• Total stock line items in the inventory (total number of different articles)
• Nr of items on a (global contract) SLA/Total stock line items
• Total numbers of Rush Purchase orders/Total number of purchase orders
• Stock value/Replacement Asset Base
• Number out of stock situations/Total number of requests
• Complaints nr of items not in time/Total number of requests
• Number of stock requests/Number of FTE
6 Description of roles, terms and abbreviations
6.1 Role descriptions
6.1.1 Introduction
This section is intended to provide sufficient information about the roles and responsibilities for the MRO Mate-
rials Management Work process. Collection of roles or portions of roles make up the job content of individuals.
These are roles in this work process not individuals. Ensuring that the people involved in the MRO Matarials
Management Work process have clear understanding of their roles and responsibilities is a key factor required
to obtain value from this work process.
6.1.2 Role descriptions
Role Description
1. Catalog manager Person responsible for the development and maintenance of the material article
catalog, a database of MRO items that are used in the local maintenance and op-
erations process. The catalog contains items that are kept on stock and that are
purchased directly.
2. Controller The Controller is a resource, trained in the fundamentals and applications of eco-
nomic analysis. The primary purpose is to provide standard methods for and
guidance in using costs and benefits to determine value added for MRO Materials
Management.
3. Discipline Team Ma- The DTM manages a team (in a specific area) that makes the global standards
nager and chooses the OEM to fill the requirements (also called Global Category Man-
ager)
4. Gatekeeper The Gatekeeper is the key role, which provides specific decision making in this
work process. The primary purpose is to ensure that requests are not started un-
less there is sufficient data/information. He is also responsible for checking for
scope completeness and prioritizing requests. This person is very familiar with
the plant operations, budget, production commitments, costs, margins, etc. It is
important that he is in a position of authority such that he cannot be pressured by
anyone lower in the management than the plant manager. Initially this role will be
time consuming, but as people become trained on what he will accept, it be-
comes less demanding. The plant manager needs to support him and ensure that
he is prioritizing and purging requests using criteria approved by the plant man-
ager. He needs good communication skills and self-confidence, and a good ability
to handle confrontational situations.
5. Inspector These are technical experts in the various disciplines (mechanical, electrical, in-
strument, piping, and systems technology). May be located in one or more plants
or Engineering department. Their primary purpose is to select equipment technol-
ogy and installation methods to be used in the project, following DSM standards
when they exist. They also assist the gatekeeper in verifying the proposed bene-
fits, and review for minimum equipment.
6. Item Owner(s) The item owner, as meant in this work process is the person who is responsible
for the MRO Materials logistics in the Operating Facility. Most of the time the
Maintenance Manager (responsible) will fulfill this role.
The Plant Manager will be accountable for the overall cost/spent of the facility.
Role Description
The accountable person from the legal point of view the person who is in charge
of the legal entity of the facility, for example the Site Manager or Business Unit
Director.
7. Lead Buyer The person who contributes to maximize the added value to DSM business
chains for the procurement process for product and services by providing best
practice procurement methodology and tactics, analyzing the demand of the busi-
ness group, market/supplier and product knowledge.
8. Maintenance Spe- The Maintenance Specialist role assists in assessing the value added of mainte-
cialist nance activities.
- The person responsible for the maintenance program in the Plant. He is usu-
ally a maintenance engineer, supervisor single or multi-disciplined (could be
a lead craftsman). This person is usually familiar with different types of
maintenance techniques.
- This person is thoroughly familiar with plant operations, budget, production
commitments, costs, margins, etc. It is important that he is in a position of
authority such that he cannot be pressured by anyone lower in Management
than the Plant Manager.
- The person fulfilling this role must be knowledgeable of the all the various
work processes and sufficiently trained to measure the value of specific ac-
tivities to the business.
9. MRO Improvement Multifunctional team that periodically measures and analysis the performance of
Team the MRO material management process. In the team representatives of different
work processes like MRO Material Management (M3), Purchase to Pay (PtP),
Maintenance (M), Operate Plant (OP), Improve Equipment Reliability (IER), Large
Capital Projects (LCP), Small Projects (SP) and Turnaround (TA) and form vari-
ous discipline teams can be involved. Suppliers (SLA parties) will be involved as
necessary. In case of non-performance the team needs to define improvement in-
itiatives.
10. MRO Manager Person responsible for the total MRO material management process, including
replenishment and coordinating the SLA with third parties.
MRO manager is responsible for total MRO supply chain on site:

- Catalog management;
- Logistic concept management;
- Inventory management;
- Store operations;
- Replenishment;
- SLA’s coordination and implementation;
- Proposals for sell/scrap/share.
MRO manager
- Oversees the entire M3 process;
- Optimizes the supply chain;
Secures security of supply on site.
11. Reliability Engineer The reliability engineer role is responsible for performing (and facilitating) most of
the analysis included in this work process.
Role Description
- The person fulfilling this role will be responsible for grouping equipment into
concise appropriate groups to assist in communication and analysis as a key
leader in the Failure Mode and Effects Analysis (FMEA).
- The person will perform the analysis for selecting the optimum PPM strate-
gies for mitigating reliability problems.
- The person fulfilling this role is responsible for developing a comprehensive
PPM plan, quantifying its effects on the business and presenting this plan to
the appropriate personnel.
- The person is responsible for the PPM plan and its effects on the business.
- The person analyses maintenance history, preventive maintenance, and As-
set Utilization data. Based on his analysis, this person will recommend
improvements which parts need to have a different MRO Category based on
(FMEA) Criticality and Market Availability or Inventory Management needs to
be modified.
This requires the person to analyze and prioritize based on both technical
knowledge and business requirements of the Plant. If the person cannot answer
how to solve a specific technical problem, technical resources must be used to
develop the projects.
Based on Reliability Engineer (from Improve Equipment Reliability Work Pro-
cesses (ME06).
12. Requestor Person that has an actual need or a need for security of supply of a MRO item.
The request for an actual need is initiated in M, TA, SP or OP.
Requestor for actual need MRO item can be:

- Maintenance manager (M);
- Operations manager (OP-Normal);
- Turn around manager (TA);
- Projects Manager (SP);
- Stores personnel and technicians.
The request for an expected need is initiated in IER, LCP or SP.
Requestor for security of supply can be:

- Maintenance Specialist/Reliability Engineers (IER);
- Project manager (LCP, SP);
- Operations manager (OP).
13. Specialist Person for technical advice and expertise, can be an outside source (e.g. a Noti-
fied Body).
14. Warehouse Em- Person who performs catalog management tasks, like:
ployee - maintaining control over the local catalog database;
- assigning new stock numbers, Coding;
- creating and maintaining Bill of Materials.
Inventory management and store & supply tasks:

- maintaining physical inventory count records;
- setting reorder points;
- expediting materials through purchasing;
- coordinating schedules during turnarounds and vacations;
- issue materials at the Counter, Issue Transactions Entry, including proper
packaging;
Role Description
- receiving MRO items, Transactions Entry, processing documentation, quality

inspection;
internal Inventory Audits.
15. Warehouse Supervi- The person who:

sor - Oversees the M3 process at site;
- Controls and optimizes inventory levels in his/her stores/ warehouses;
- Has the responsibility to oversee that warehouse employees work according
effective work processes.
6.2 Definition of terms
The following tables provide the definitions of terms used in the MRO Materials Management Work process.
6.2.1 Material Article Catalog Management
Term Definition Example(s)
1. Actual need Real need for a MRO item. The request for an actual need is
initiated in Maintenance (M), Turnaround (TA), Small Projects
(SP) or Operate Plant (OP).
2. Alternative item Item in the catalog that has the same features and perfor-
mance as the item on the catalog change request.
3. Change request Request to add, modify or delete an item to the material article Adding or changing
for material arti- catalog. the supplier identifi-
cle catalog A modify request can be: cation
- Changing the MRO data;
- Adding or changing the item identification
4. Item criticality The impact on the plant performance or Safety, Health, Envi-
ronment & Quality (SHE-Q) in case the installed MRO items
breaks down.
5. Maintenance win- Is the opportunity in availability of the plant (planned or un-

dow planned).
Planned opportunities occur during TA or following the pro-
duction plan (where production amounts have been agreed,
but can also result in plant stop due to no need for full produc-
tion).
Unplanned opportunities occur when the plant is stopped due
to a breakdown, other work can be executed aswell.
6. Management of Procedure to check implications on design, process and SHE-

change proce- Q aspects to safeguard and maintain plant specification.
dure
7. Market All sources that provide market information about the MRO
item.
8. Material article Listing of MRO items available in the market place and used
catalog in the DSM installation. Database (if SAP is utilized this will be
in SAP managed) of MRO items that are used in the local
maintenance and operations process. The catalog contains
items that are kept on stock and that are purchased directly.
The item identification (coding) and classification are man-
aged locally.
9. MRO data All data of an MRO item that is required to update the material OEM-, OPM num-
article catalog and to define or modify the logistic concept. ber, item cha-
racteristics, plant po-
sition, item criticality,
maintenance win-
dow, supplier
delivery time etc.
10. (Required) Lead The time between the moment that an item breaks down and
time the moment the new item needs to be installed (also mainte-
nance window). Based on the Maintenance Concept (repair)
methods and necessary parts (should) have been established
to facilitate the shortest time to repair as possible. Determined
by the item criticality in the plant. (See figure 3)
Definition Leadtime
Lead time
Moment of Order Parts requested Parts repaired Equipment

discovery of parts on site for direct need taken into
the defect. on-site ready Operation
for Installation
Shut-down or
planned to
shut-down Equipment taken Parts to be Equipment repaired
out of operation repaired taken and ready to turned
(planned shut-down) out of equipment over to Production
Equipment cleaned and  direct need
turned over to  non-direct need
maintenance
Determination of
the defect and Start Repair
identification of
the repair method
Time to Repair
Non-availability of equipment
Maximum Maximum Delivery time

delivery time delivery time for repairable items
repairable item non-direct need
direct need
Figure 3 Lead time

11. Security of sup- Expected need for a MRO item. The request for an expected
ply need is initiated in Improve Equipment Reliability (IER), Large
Capital Projects (LCP) or Small Projects (SP).
6.2.2 Logistic Concept Management
1. Item Availability The availability of a MRO part depends on the speed and
ease with which specific item can be obtained and the deliv-
ery-time of the supplier for specific item.
When item availability changes this has impact on the Market
Availability and the resulting choice of the logistic concept.
2. Consumable Item which is not critical in the plant and has the required mar- Typical example is a
ket availability. filter.
3. Critical item Item which is critical in the plant and has the required market Typical example is a
availability. single installed (no
redundancy), stand-
ard electro motor.
4. Criticality A MRO part is critical when lack of the specific part results in
production loss or when SHE-Q issues arise (determined in a
FMEA).
5. Consigment Having consignment stock means that you have access to

stock products which are still owned by the supplier. You will not be
charged until the products are used or sold, i.e., moved out
from the consignment stock
6. Delivery time The time from ordering the part to delivery at the requested
(repair) location on site (See Figure 3.)
7. Global contract Purchasing contract with global MRO item supplier. Global
contracts are mandatory, unless local support is not available.
In case the global contract is applicable, the logistic concept
will be defined by the Service Level Agreement (SLA) of the
global contract.
8. Logistic concept MRO strategy for a specific item. Key components in this
strategy are:
- Ownership of the MRO-item;
- Inventory managed;
- Warehouse operations;
- Distribution;
- Material Article Catalog management.
9. Logistic Concept Identify set up and manage the optimal logistic concept for
Management MRO goods; a logistic strategy based on security of supply
and minimum costs (where and when)
10. Market Availabil- The ratio between required lead time and actual delivery time.
ity (MA) If the market availability ratio is larger then 1, then the item is
available in the market and delivery time is not an issue.
If the market availability ratio is less then 1, than delivery time
is an issue.
11. MRO category Based on the item criticality and market availability 4 MRO
categories can be distinguished:
- Strategic items;
- Critical items;
- Non-critical items;
- Consumables.
12. Non-critical item Item which is not critical in the plant and does not have the re- Typical example is
quired market availability. an air-condition unit
in the plant facility.
13. Service Level Formal contract with an internal or external logistic organiza- Performance indica-
Agreement (SLA) tion to provide the demand security of supply of a selected tor examples:
group of MRO items. - Ownership;
In the SLA various performance indicators are described and - Sourcing;
agreed upon, which will be used to measure the security of - Warehouse
supply and related costs. In the SLA the logistic concept is de- operations;
scribed with its key components. - Inventory Control;
- Catalog
management;
- Ict.
14. SLA related costs Fixed amount per period for executing the service. Cost of capital, inter-
est, stores, utilities,
people, IT, etc.
15. Strategic item Item which is critical in the plant and does not have the re- Typical example is a
quired market availability. single installed (no
redundancy) ex-
truder, which is
specially designed
for DSM.
16. Vending Ma- A vending machine is an automated machine that provides

chines items to consumers after money, a credit card, or a specially
designed card is inserted into the machine
17. Vendor Managed In a Vendor Managed Inventory (VMI) environment, the ven-
Inventory dor/supplier is responsible for maintaining customer’s
inventory levels. This means that the supplier is responsible
for the availability of products in the storages of the delivery
locations and has the flexibility to determine when to replenish
them. The supplier has access to the customer’s inventory
data and is responsible for generating replenishment orders.
The supplier therefore needs advanced planning systems to
ensure customers will not run out of stock, so that the cus-
tomer has the right amount of product availability at all times.
18. Vendor Owned The vendor owns the stock (see also consignment stock)
Inventory
6.2.3 Inventory Management
1. ABC analysis Method to determine the usage of the items, also called
80/20-rule or Pareto-analysis.
2. Blue bin Box to put in MRO items for scheduled work orders.
3. Charge Billing the user/requestor for a MRO item.
4. Check inventory Check in inventory control system if actual inventory level <
level minimum inventory level.
5. Check lead time Compare the time span between store-location and requestor
with the requested lead time.
6. Cycle count Compare the physical and administrative inventory.
7. Dead stock Not used in the installation anymore: no users.
8. Dispatch pick or- Request for MRO items to be placed in blue bin for scheduled
der work order.
9. Evaluation aver- Compare usage with the established average inventory level.
age inventory
levels
10. Excess stock More than maximum level.
11. Inform requestor Inform the requestor that specific part cannot be delivered
non delivery within required lead time.
12. Inventory evalua- How often to check physical (on the shelf) and the actual (in Cycle count, ABC
tion the system) inventory in balance (periods for cycle count). analysis, physical in-
ventory check
13. Inventory Man- Define and control minimum and maximum stock levels and
agement stock locations of MRO goods a tactical process based on se-
curity of supply (Service Level Agreements) and minimum
costs (how).
14. Inventory model Method of controlling inventory e.g. SIC (statistical inventory Statistical inventory
control: BQ, BS, sS, sQ) or actual demand needed. (to be de- model. Actual de-
fined after the issue-list) see attachment. mand.
15. Inventory param- Defined criteria that influence the inventory level as re-order
eters point (= moment for replenishment), order quantity, max. in-
ventory level.
16. MRO items Maintenance Repair & Operations goods; indirect goods (no
raw material and packaging goods).
17. Obsolete stock No longer available from market: no suppliers.
18. Order Admini- Financial and administrative completion of supply of MRO

stration goods
19. Order Entry Receipt of material supply requests of internal customers.
20. Order related Cost price specific MRO item (incl. transportation + M3 opera-
costs tions and overhead).
21. Ordering Request of items within agreements (Service Level Agree-

ments).
22. Prepare Arrange transportation and execute belonging administrative

actions.
23. Scrap The disposal of excess or dead stock materials. When items Sales of e.g. remain-
cannot be sold or shared with other plants the items need to ing pipe materials to
be disposed of in a correct manner (according to company the iron recycle
regulations). company
24. Select from mate- Search in material article catalog that contains all MRO-items
rial article that are being used in DSM, and look for the defined storage
catalog location.
25. Sell items Items that have no further use within DSM, but have economic
value on the market.
26. Shelf-life Longevity (usable duration) of the item. (see figure 4)
S helf life vs. useful life in operation definition
useful life
m anufacturing m om ent of operation in end of

of item use of the equipm ent item guaranteed
shelf life = item in the life of item
shop test; equipm ent
transport;
com m isionig;
stock;
etc.
E xam ple
Item has m axim um useful life of 7 years
2 years 5 years
shelf life useful life
Figure 4 Shelf life vs. useful life in operation.

Term Definition Examples(s)
27. Slow movement Items that have not been used for 5 years or more. (These
items should have been marked as strategic or critical.)
28. Statistical Inven- Based on amount ordered and whether the moment of order-
tory Model ing is periodical or not for different ordering methods for MRO
parts can be distinguished (B,Q B,S s,Q and s,S).
See Determine inventory model explanation for further details.
29. Storage location Store or warehouse at which MRO-item is located. Decentral ware-
house at plant, site-
central store, lay
down
30. Tracking & trac- Monitor location MRO-supply during transportation.

ing
31. Transportation External transportation between OEM/3rd party/other DSM

sites and requestor or internal transportation on 'own' DSM
site.
6.2.4 Store & Supply Goods
1. Availability Free for use outside DSM site where requested item is
stored.
2. Adjust inventory Bring physical and administrative inventory in balance.

level
3. Administration Preparing necessary documentation of outgoing MRO-items

adjusting status of inventory.
4. Administrative Verify whether the delivery (item and documents) match with
receipt the order, check transportation documents, and register the
delivery.
5. Bin/shelf location The location where the MRO-supply can be stored in the
warehouse or storeroom.
6. Determine pick Determine in warehouse management system where the re-

location quested MRO item is stored and can be picked.
7. Distribution Man- Define and control the delivery of MRO goods a tactical pro-
agement cess based on security of supply and minimum costs (how).
8. Handover to re- Physical receipt requested MRO item at point of delivery and
questor acceptance of delivery.
9. Inform IM for If MRO part can be repaired, replenishment of inventory isn't

(non)replenish- necessary; if part can't be repaired, inventory management
ment must be informed that a new item can be purchased.
10. Inform vendor Inform vendor that delivered goods are rejected and should be
taken back.
11. Inspection Check if delivered MRO-item and document meets specifica-

tions as mentioned in the order.
12. Non-conformity The vendor did not deliver the item and/or documents as or-
dered in usable condition.
13. Open crib At this store location frequent used items are stored (close to In Dutch: grijpvoor-
the location where they are used, at the plant close to the raad
shop floor or work area). The items can be retrieved without
any administrative procedures.
Designated personnel or a third party takes care of the replen-
ishment.
Also called open bin or free issue materials.
14. Performance Measurement of the delivery performance (delivery reliability

measurement and delivery time) for purpose of vendor rating.
15. Receipt Manage- Define and control the receipt and identifications of MRO
ment goods a tactical process based on security of supply and mini-
mum costs (how).
16. Return Goods Items not used for intended work on work orders, shutdowns
or projects.
17. Repairables Parts which are rotated through the stores. These parts are Back pull-out unit for
returned from the user in a non-functional condition and are pumps; Electrical
repaired by a central workshop or a third party. They are then Motors; Electronic
returned to the stores for storage for future use. components (e.g.
IO-cards)
18. Schedule picking Plan in time when picking activities have to be executed.
activities
19. Scheduling re- Plan in time when receipt activities (administration, unloading,
ceipt activities and inspection) have to be executed.
20. Staging area Separate store-location in the warehouse or storeroom where

outgoing MRO-supply is stored before transportation.
21. Stock in separate Store rejected MRO supply in a physical separate room to
room avoid mixing-up with not-rejected MRO supply.
22. Tracking & trac- Monitor location MRO-supply during transportation.

ing
23. Warranty proce- Method by which MRO item covered under warranty is re-
dure placed or refunded.
24. Warranty Man- Control the warranty period of new or repaired MRO goods
agement and manage the logistic and declaration process towards the
supplier. Registration of warranties from (in past) purchase
items.
6.2.5 Evaluate & Improve
1. MRO improvement List of ideas and projects to improve the total performance of
agenda the MRO material management process and beyond.
7 Symbols and abbreviated terms

CMMS Computerized Maintenance Management System
M Maintenance Work Process
DT Discipline Team =Team that makes the global standards and choosing the OEM to
fill the requirements.
e.g. exempli gratia (Latin) = for example
EOQ Economic Order Quantity
FIFO First In First Out
FMEA Failure Mode and Effect Analysis = A structured inventory of potential failure mech-
anisms and their effects. Methodology is based on the ranking of the product of
scores for Likelihood of failure X Consequence of failure X Possibilities of detecting
and controlling the failure mechanism.
IER Improve Equipment Reliability Work Process = The process which provides the
data about the item criticality and the required time to repair.
IS Integrated Supplier = Third party that has a service level agreement for delivery
and/or stock keeping and/or inventory management (excl. or incl. ownership) of
MRO items.
LCP Large Capital Projects Work Process
M3 MRO Material Management Work Process
MoC Management of Change
MRO Maintenance, Repair & Operations Goods Work Process = Indirect goods (no). Ex-
cluded are raw materials, packaging goods and the materials for construction in
capital projects done by outside contractor. The items for capital projects are man-
aged in the contractor work process, but follow the MRO catalog steps. (examples:
Valves, gloves, pumps)
MTBC Mean Time Between Changes
OEM Original Equipment Manufacturer
OP Operate Plant Work Process
OPM Original Part Manufacturer
PPM Predictive and Preventive Maintenance = Collection of all activities of breakdown-,
preventive- and predictive-maintenance, procedural changes and redesign in com-
bination with needed spare parts and equipment.
PtP Purchase to Pay (several references are made to the PtP processes)
RAB Replacement Asset Base (Also called RAV: Replacement Asset Value)
RCA Root Cause Analysis = method to find the real cause for a non-performance.
SLA Service Level Agreement
SP Small Projects Work Process
SPIR Spare Parts Interchangeability Record (examples: Also e-SPIR = electronic-SPIR)
TA Turnaround Work Process
1 Annexes
2 Request for MRO item
2.1 Request for MRO item → Actual Need
2.1.1 Actual need order from material article catalog
Nr Description Additional information

1 Name requestor
2 Delivery location
3 Work Order number

4 DSM-article number
5 Item description
6 Amount
7 Requested delivery date
8 Take from contingency stock?
9 Item to be returned? (Do not replenish)
2.1.2 Actual need not in the material article catalog
Nr. Description Additional information

1 Name requestor
10 Telephone nr.
11 Department
2 Delivery location
12 Project number/Cost Account number
3 Work Order number
7 Requested delivery date
8 Take from contingency stock?
4 DSM-article number If known.
13 Unit battery, unit=1; meaning 1 piece, 1 four pack, 1
box with 10 four packs, etc.
6 Amount
5 Item description
14 Manufacturer (OEM)
15 OEM nr.
16 Original Part Manufacturer
17 OPM nr.
18 Supplier
19 Supplier nr.
20 Price estimate euro (€)/currency
21 Item to be inspected (according to which pro-
cedure)
22 Date/initials Requestor
23 Date/initials approval Manager
To be filled in by the requestor, define required/additional
Additional SP/LCP/TA:
24 Turnaround/Lay down area
2.2 Request for MRO item → Security of Supply
Fill in list of 2.1.1 (item is in material article catalog present) or 2.1.2 (item not yet described in material article
catalog) and add following additional information:
26 In current stores, level to increase yes/no

27 Repair item yes/no RB=2: repair item, this item can be returned to the
store
Request for replenishment only by requestor RB=1: request for replenishment only by requestor
28 Number of attachments
29 Attachments:
❑ Previous orders
❑ Relevant correspondence
❑ Drawings
❑ Parts list
❑ Quotes
❑ Copy of a catalogue page
❑
30 Equipment type
31 Type-nr.
32 P- and I-code Process and Instrumentation Flow diagram code
33 DSM equipment-nr.
34 DIN/ ANSI
35 Material according. DIN/ASTM
36 Reason for security of supply:
• required delivery time
• support for corrective actions
• material certification issues
• no longer in production (alternative)
• high turnover
37 All other
2.3 IER data MRO item
Nr. Description Additional information

38 Criticality functional position yes/no
39 Required lead-time preventive/predictive
40 Part of assembly
41 Preventive/Predictive part
42 Expected use Preventive/Predictive
43 Required lead-time corrective
44 Corrective part
45 Expected use Corrective

46 Severity of item failure
47 Frequency of item failure
48 Correctibility of item failure
49 Criticality Y/N (or A/B/C) (following ME06)
2.4 Change request for MRO item material article catalog

50 To be ordered more then once
51 Not in local catalog already
52 Stores location
53 Stores number
54 Add/Modify/Delete local catalog
55 Share/Pool with
2.5 Market availability data MRO item

59 Actual delivery time supplier
60 Who are the Supplier(s)
61 Delivered from stock and location of the stock
62 Security of Supply
2.6 Determine MRO category
To determine the MRO category, the criticality and market availability need to be calculated first.
2.6.1 Criticality
Criticality
A MRO part is critical when lack of specific part results in production loss or when SHE-Q issues arise (See
ME06 IER)

49 Determ criticality (ME06
63 Criticality
❑ N – low criticality (no mitigation measure is
needed, risk is at acceptable level)
❑ Y – High critical (mitigation measure is needed
to bring risk to acceptable level)
❑ Remark: Criticality can also be divided in A
(critical), B (Medium), C (non-critical) categories
2.6.2 Market Availability
Availability
The availability of a MRO part depends on the speed and ease with which specific item can be obtained and
the delivery-time of the supplier for specific item.
The market availability ratio is between required lead time and actual delivery time.
If the market availability ratio is larger then 1, then the item is available in the market and delivery time is not an
issue. Availability is high.
If the market availability ratio is less then 1, than delivery time is an issue. Availability is low.

64 Market availability
❑ Low (<1)
❑ High (>=1)
2.6.3 Calculate MRO segment/category

Market Availability
low Non-critical items Strategic items required lead time

MA = ---------------------------< 1
actual delivery time
required lead time

high Consumables Critical items
MA = ---------------------------> 1
actual delivery time
no yes
Criticality
65 MRO Category
❑ Strategic
❑ Critical
❑ Consumable
❑ Non-critical
2.7 Alternatives for MRO item

66 Alternative specification (higher) e.g. Stainless Steel in stead of Carbon Steel
67 Second hand
68 Refurbishment/Overhaul
2.8 Warranty data

69 Serial number of part Original Part or Original Equipment Number
70 Warranty period
71 Warranty scope
72 Warranty start date Warranty starts after delivery or when part is used
in the plant.
2.9 Repair data

73 Fault code
74 Requested repair date
75 Priority
76 Description of failure
3 Logistic concepts
Based on the MRO category the logistic concept will be selected.

65 MRO Category
❑ Strategic
❑ Critical
❑ Consumable
❑ Non-critical
The following general Principles apply when selecting a detailed logistic concept:
- For Strategic items security of supply beats costs savings.

- For Critical items cost savings are equally important as security of supply.
- For Non-Critical items cost savings are key and security of supply is no issue. Items are not critical so
inventory is not required, only sourcing.
- For Consumable items cost savings are key and security of supply is no issue. Items are carried on
(decentral) inventory for high turnover items. For sourcing purposes items are bought in Economic Or-
der Quantities and/or clustered with other items per supplier.
The next step is to determine the optimum supply chain solution. The choice between consignment stock, own
stock, preferred supplier, Vending Managed/Owned Inventory, Vending Machines or No Stock needs to be de-
termined qualitatively (risks and opportunities approach) and quantitatively (best financial option based upon
cost of logistic concept, potential loss of production/SHE-Q losses due to non-availability of item and financial
costs).
Based on the qualitative and quantitative analysis a detailed choice can be made.

77 Logistic Concept
➢ Strategic
❑ Consigment Stock
❑ Own Stock
➢ Critical
❑ Frequent use
▪ Ensure stock at preferred
supplier
▪ Own stock if more efficient
❑ Irregular use
▪ Ensure stock at preferred
supplier
▪ Order when needed
➢ Non-critical
❑ No stock
❑ Order when needed
➢ Consumables
❑ Frequent use
▪ Vendor managed Inventory
/ Vendor owned Inventory
▪ Vending Machines
❑ Irregular use
▪ No stock
▪ Order when needed
4 Service Level Agreement example

The Purchasing department has specific Strategic Supply Agreements and Umbrella Agreements available at
request.
General set up:

Product and/or Service Parameters and Requirements
1. Fixed fee cost allowance including yearly inflation allowance (over a 5 year period)
2. Number of services to be performed per year
3. Bonus system
4. Description of the base population
5. Reliability upgrades
a. Management of Change
6. Delivery of spare parts/Urgency Indicators/Transportation
7. Inventory buyback
8. Insurance
9. Product and/or Service Expectations
a. Mean Time Between Changes (MTBC) improvement
10. Key Performance Indicators
a. See Annex 7.2
11. Reporting
a. Progress reports
b. Non-conformity reporting
12. Agreement teams
a. Multi disciplinary teams (Plant teams)
b. Problem solving/agreement termination
13.Response time: to be determined per equipment and plant e.g. 24 hours service
Based on the MRO category segmentation takes place. If Market Availability changes during the con-
tract period this need to be followed up.
14. Training
15. ICT Integration
a. History feedback for (Maintenance/Reliability) History
16. Definitions
Each block from the M3 Logistic base model should be addressed.
• Physical MRO Suypply

• Need for security of MRO Suypply
• Need for Purchase
• Purchase Marketing Plan
Catalog • Need for sales and/or scrap
Management
Logistic Purchase
Concept
O rder Entry
Management
W arranty Receipt Inventory Distribution O rder

Management Management Management Management Administratie.
m anagem ent level
operational level
Stores
Supplier G oods G oods G oods G oods
G oods Issue Distribution Customer
Receipt Inspection Storage Handover
Sales
Surplus
G oods
Scrap
W orkshop
Surplus
Repair
G oods
5 Determine inventory model
Methods how to order item s for inventory
W hen Am ount
the ordered am ount is dependent

the ordered am ount is
on the stocked am ount at the
independent of the tim e ordering
tim e of ordering
B ,Q B ,S
Continuous when the ordering level B is reached, when the ordering level B is reached,
replenishm ent a replenishm ent order for fixed a replenishm ent order to the
quantity Q is done m axim um order level S is done
s,Q s,S
periodically the stocklevel is periodically the stocklevel is
Periodical ordering checked, when it is below level s, a checked, when it is below level s, a
replenishm ent order for fixed quantity replenishm ent order to the m axim um
Q is done order level S is done
Non-critical Critical
MRO category Non-critical Consum ables Critical Strategic
3.1.1 s,Q (abc low

Determ ine non stock turnover)
B,S B,S
inventory m odel s,S (abc high
(see notes on abc) turnover)
5.1 Inventory model - storage
M RO category Non-critical Consum ables Critical Strategic
arranged in SLA
-
with O EM /IS or pooling partner
3.1.2
Determ ine storage DSM strategic/critical/consum ables concept:
location -
open crib/bin decentral
central store
at location store
For the storage location not only the open crib/decentral/central choice should be investigated, but also atten-
tion needs to be paid to:
1. Preservation methods (Quality standard)
2. Quality check prior to shipping
3. Check for cleanliness prior to packing and shipping
4. Shipping and packing (products need preservation for short or long term)
5. Check casing for cleanliness and
6. Check for all documentation on
a. part preservation and cleanliness
b. quality checks
c. casing integrity
7. Storage location (critical parts not in forklift truck turn/travel routes)
5.2 Inventory model - inventory parameters
N o n -critica l C ritica l
M R O ca te go ry N o n -critica l C o n su m a b le s C ritica l S tra te gic
3 .1 .3
D e te rm in e
in ve n to ry
p a ra m e te rs
order when needed: inventory is based on m ainte nance concepts for E O Q and m in/m ax
In ve n to ry m in = 0 are dete rm ined by com m on practice/exp erience/evaluation,
p a ra m e te rs m ax = 0 m aterials w ill always supplied based on the F IF O principle (first in
E O Q = as needed first out)
S h e lf life P ro d u ct d e p e n d e n t
5.3 Inventory model - inventory evaluation
MRO category Non-critical Consum ables Critical Strategic
3.1.4
Determ ine
inventory
evaluation
procedure
cycle count at each
usage (if it-solutions
are available);
otherwise cycle count at each usage
- 1x halfyear (abc low cycle count 1x half year,
Cycle count *
turnover)
1x 2 m onths (abc
high turnover)
Shelf life Product dependent
Notes: abc = abc analysis based on item turnover

(high turnover item s are considered to have 80% of turnover with approxim ately
20% of the item s; low turnover item s are considered to have the 20% of turnover
with approxim ately 80% of the item s)
* = needs to be validated at each location, based on financial procedures,
booking accuracy, open or closed stores and discipline of the personnel
6 Related cost charging
Item cost conform Item at

Dem and Planning Contingency cost
Security of supply cost Periodical

to
overhead
see Note 1 Urgency/Rush order cost Delivery Cost
Sourcing/Service cost/ Sourcing/Service cost/
Leveraging buying power Leveraging buying power
Activity Activity
Item price Item price
Based Based
Note 1: Urgency/Rush order cost due to too late

planning or im proper work preparation are charged
against the activity, but need to be m ade separately
visible to be able to give proper m anagem ent
focus.
Focus will be on:

- Cost for items will be charged against the activity;
- The periodical SLA fee for security of supply and services will be charged to the overhead;
- Urgency/Rush orders cost due to too late planning or improper work preparation are charged against the
activity.
6.1 Charge order related cost
The rules have to be in line with corporate finance rules and maintenance business rules.
Cost will be based on activity based costing, billing will be done against present cost (cash out) when material
is used. The material needs to be replaced against the present cost.
The discrepancy between original order value and present cost is deviation in working capital.
6.2 Charge SLA related cost
Yearly (or periodical) fee for having materials available at requested delivery time and services.
Cost of local storage will be incorporated in the Maintenance overhead.

Cost of central/site storage will be on SLA basis. This will be charged against the Maintenance overhead.
7 Performance measurement
7.1 Key performance indicators per process step
A large number of KPI's has been defined. To effectively focus, select for the appropriate area on each process
select 2-3 per process. The perspective helps to keep the balance between internal focus, customer satisfac-
tion, financial results and innovation.
Nr Process Perspective Description Remarks
1 Catalog Management Internal Total stock line items in the inventory (total
number of different articles)
2 Internal Total number of shared items/
Total stock line items
3 Customer Number of use of shared items/
Total number of issues
4 Internal Number of use of shared items/
Total number of shared items
5 Internal Number of catalog changes (local)/
6 Internal Number of catalog changes (global) /
7 Internal Stock line items of global catalog items
cross linked to the local catalog/
8 Customer Number of line items from global contracts
(this year)/Total stock line items
9 Logistic Concept Manage- Financial Total fee paid for Security of Supply/RAV
ment (on a site/plant/SLA contract)
10 Financial SLA cost over the past 3 years (trend)
11 Internal Nr of items on a SLA/
12 Internal Nr of items on a global contract SLA/
13 Inventory Management Internal Inactive Stock Line items (in the last year)/
Total Stock Line Items
14 Internal Nr of items with dead stock/
15 Internal Nr of scrap items/Total stock line items
16 Financial Scrap cost (this year)/
Total Annual Amount of Stores Usage
17 Internal Number of Obsolete stock items/
18 Internal Number of Solutions to the obsolete stock
items/ Number of Obsolete stock items
19 Internal Stock items with unknown location/
20 Internal Number of stock evaluations/number of
items
21 Store & Supply Goods Financial Total Annual Amount of Stores Usage/
Total Inventory Valuation
22 Financial Total Value of Maintenance Spare Parts in
Controlled Stores/Total Inventory on Hand
(Controlled + Uncontrolled)
Nr Process Perspective Description Remarks

23 Customer Total Number of Orders Filled on Demand/ Stock outs
Total Number of Orders Requested
24 Customer Total Number of Rush Purchase Orders/
Total Number of Purchase Orders
25 Customer Rejected items by inspection/
Total nr of inspected items
26 Internal Number of times per return good (top ten)
27 Customer Delivery time (between store and requestor)
28 Financial Costs for stock keeping and distribution/
Total Annual Amount of Stores Usage
29 Financial Stock value/Replacement Asset Value
26 Customer Number of out of stock situations/
Total Number of requests
27 Financial Repair cost per replacement
28 Customer Complaints nr of deliveries at wrong loca-
tion/Total nr of deliveries
29 Customer % Work orders due to materials not on time
30 Customer Number of request at the agreed upon time De-central,to be
applied on each
store
31 Customer Number of requests at the agreed upon Central
time/Total Number of requests
32 Evaluate & Improve Customer Complaints nr of items not in time/
33 Customer Complaints nr of items wrong material
and/or documents/
34 Innovation Improvement projects/Turn over
35 Innovation % Improvement projects of total improve-
ments
36 Financial Total Stock value/Replacement Asset Value Excl. open crib
37 Financial Total Stock value/Replacement Asset Value Incl. open crib
38 Financial FTE-stores*employee annual pay/
Total maintenance cost
39 Financial FTE-stores/Total FTE
40 Financial Number of stock requests/Number of FTE
7.2 Key Performance Indicators for Service Level Agreements
Examples:
1. Number of equipment with more then one failure per period (1 year)
2. Total number of failures per month
3. Mean Time Between Changes (MTBC)
4. Cost of repair parts/Total cost of equipment
5. Investment in stock
6. Cost for parts not under the SLA
7. Cost for modifications not under the SLA
8. Number of parts of SLA supplier/Total number of equivalent parts
9. Number of Root Cause Analyses
10. Delivery performance
11. Non conformity reporting
8 Handover/commissioning
The rules for handover/commissioning have to be developed during implementation.
9 Sell/Share/Scrap evaluation
The rules for sell/share/scrap evaluation have to be developed during implementation..
10 MRO stock value

The rules for evaluating MRO stock value have to be in line with corporate finance rules and maintenance
business rules.
The procedures to adjust inventory balance according to the physical amount counted will follow Corporate ac-
counting rules
The following points need to be addressed at the minimum:
- Where do mutation cost go?
- Who is responsible for the physical count? (Controller: financial or tax implications/ Warehouse supervi-
sor: for security of supply implications?)
- Who adjusts the inventory balance? (Warehouse supervisor adjusts the actual amount according to the
physical amount counted?)
- What are the accounting rules which require the number of physical counts? At which frequency?
11 M3 Excel support tool

The M3 excel support tool is a spreadsheet to support the documentation of the MRO info and category and to
support the stock value analysis.
See:
M3%20TOOL%20MR
O.xls
The M3 Excel support tool (M3 Excel Support Tool MRO (L)) is available as Best Practice in the BP Portal -
https://dsm1234.sharepoint.com/sites/operations-knowledge

ME50 MRO Materials Management Manual 20200301 (C)

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ME50 MRO Materials Management Manual 20200301 (C)

Uploaded by

Copyright:

Available Formats

Manufacturing Standard

FOR INTERNAL USE ONLY

ME-50 Edition: March 01, 2020

WORK PROCESS MANUAL

MRO Materials Management

Responsible: Maintenance & Reliability Network (MaRS)

Requests, reactions to Corporate Operation & Re- e-mail: jos.aelst-van-der@dsm.com

1 Level 0 work process description

1.1 Purpose of the work process MRO Material Management

The goal of the Materials Management Work Process is twofold:

1.2 Level 0 flow diagram

MRO Materials Management

1.3 Interaction MRO with other work processes

Figure 2: Interaction of MRO Material Management with other work processes

M Maintenance Work Process

IER Improve Equipment Reliability Work Process

LCP Large Capital Projects Work Process

MoC Management of Change

PtP Purchase to Pay

SP Small Projects Work Process

TA Turnaround Work Process

2 Level 1 work process description

2.1 Level 1 Flow diagram

1. Material Article Catalog Management

2.2 Level 1 activity description table

Main ac- Activity description Input Output

MRO item or expected need) from other work

1.2 Define & maintain processes. (e.g.Maintenance, IER,

items selecting an appropriate logistic - Service Level Agreement with (pre-

3.2 Stock evaluation from other work processes (e.g. im-

4.2 Goods storage materials from other work pro- supply)

3 Level 2 flow diagram

4 Level 3 work process description

4.1 Material Article Catalog Management

1.1. Request for a MRO item

4.1.2 Input-Output “Material Article Catalog Management”

Lev Level 3 Step Step description Input Output RASCI

Lev Level 3 Step Step description Input Output RASCI

Lev Level 3 Step Step description Input Output RASCI

Lev Level 3 Step Step description Input Output RASCI

4.2 Logistics Concept Management

4.2.1 Level 2 main activities description step 2: “Logistics Concept Management”

2.1 Categorize MRO items

4.2.2 Input-Output “Logistics Concept Management”

4.2.3 Level 3 description tables for activity 2: Logistic Concept Management

Lev Level 3 Step Step description Input Output RASCI

Remark: The criticality of the MRO

Lev Level 3 Step Step description Input Output RASCI

Lev Level 3 Step Step description Input Output RASCI

Lev Level 3 Step Step description Input Output RASCI

4.3 Inventory management

4.3.1 Level 2 main activities description step 3: “Inventory Management”

3.1. Define stock policy

4.3.2 Input-Output main step 3 “Inventory Management”

4.3.3 Level 3 description tables for activity 3 “Inventory management”

Lev Level 3 Steps Step description Input Output RASCI

Lev Level 3 Steps Step description Input Output RASCI

Lev Level 3 Steps Step description Input Output RASCI

Lev Level 3 Steps Step description Input Output RASCI

REMARK: With a CMMS, this can be au-

Lev Level 3 Steps Step description Input Output RASCI

Lev Level 3 Steps Step description Input Output RASCI