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What Makes a Good Storeroom?
What Makes a Good Storeroom?
Jim Story, Senior Consultant, IDCON INC, a TRM Company
Posted 7/21/2026
What are the “best” Key Performance Indicators (KPIs) for world-class (MRO) storeroom management (and a good storeroom)? Well, as the Supply Officer said to Napoleon about winning at Waterloo: it depends.
Unfortunately, many businesses approach KPIs once, and they may not consider the specific behavior they’re trying to drive. Then once KPIs are in place, it’s often akin to an Act of Congress to get them changed, even if it’s discovered they’re driving destructive behavior. In general, KPIs should:
Drive the specific behaviors desired by those being measured
Reflect this year’s current business climate, even if reviewed and maintained
Be few enough to provide an organizational focus that yields improvement
One overused metric to get over…
If a storeroom is measuring anything, it’s probably total inventory value. Of course businesses need to be aware of the value of all of their assets, including parts inventory. The key question is: what will we DO with this metric as a Key Performance Indicator? Normally businesses want to reduce their inventory value. (Lower is better, right?) And there are real costs to maintaining a high inventory value, and benchmarks as to what it should be. We can quickly tell when a stockroom is out of control, partly by checking the dollar value. But having a lower inventory value for its own sake is not a valid business strategy.
One WAY underutilized metric that could drive increased performance…
How many are tracking stock-outs? And by stock-outs, we mean each time a part is needed and not available, whether on the inventory list or not. In so many plants we see, it’s not even considered as a metric, let alone a KPI. Some may track the cost of inventory; how many track the cost of parts unavailability? How much does it cost when the line is down awaiting a part? How about even expedited shipping costs? If we track the time we lost awaiting parts or at least track the number of times a needed part has not been available, we can start to prioritize good storeroom management within the larger context of Reliability.
Why have a storeroom?
What is the specific mission of a good storeroom…surely not to be as low a value as possible? I would suggest that it’s to have the correct parts when they are needed. Measuring stock outs then becomes the best way to measure that. And the old reliable measure of inventory accuracy achieves an important 2nd place.
On inventory accuracy, we really need to get inventory record accuracy close to 100% to avoid stock-outs, which should be below 4%. Are we doing cycle counts? For more critical spares, we may do more cycle counts through the year, say quarterly instead of annually. And if we have a “turns” measure in our stockrooms, the critical spares list should be “exempted” from that. A critical spares list should be developed from those particularly high-cost or long-lead parts that have the potential to put the line down if they fail. These items may not turn as frequently as the majority of parts in the storeroom, and so need to be more carefully maintained over a long-term shelf life.
Many times cost pressures lead a company to increase the difficulty of adding parts to stock. Very seldom do we see a proactive storeroom crew managing supply & demand and adding parts to designated inventory when it makes operational sense. But if it’s too hard to add parts to stock, people go around the parts stock system…and costs go UP, not down.
Example: U.S. Antarctic Program
When I led equipment maintenance for the U.S. Antarctic Program, we were at the end of the world’s longest logistics pipeline. When I started, “the word in the shop” was that we “never” had the parts we needed, despite a generous store of parts left to us by the U.S. Navy. The long “deadline” of hulks that couldn’t be fixed for want of the right part and the long faces of disappointed mechanics who would troubleshoot a problem only to be unable to fix it were the visible signs. We tracked stock-outs for EVERY part that wasn’t there when it was needed, and many of the guys felt it was just to make them feel better. But they did it. And every year we would order up the stock-outs for resupply first…and automatically added them to inventory. Then we made more room with sending out obsolete parts, and started a demand-based resupply system that started to drive the zero fills down. Result? No more “deadline”. LOWER resupply costs. A storeroom fulfilling its mission. And fewer long faces.
Good Storeroom – Conclusion
Of course, we look carefully at other metrics and context when we are called in to help improve a Parts Stores operation. A critical metric the Stores supervisor should track and provide is inventory accuracy. The only thing that makes a face longer than just not having the part you need is when the system SAYS you have the part (yay!) and then you don’t (boo)!
TRM together with IDCON has industry leading experts that can help you identify where the critical shortfalls for meeting the “big picture” productivity goals your organization has, then help you correct the problems. Your storeroom may be your workflow’s “weakest link”…
Jim Story
Reliability Transformation Facilitator, IDCON INC, a TRM Company.
Extensive supervisory and managerial experience in private and public environments, process and equipment Proven leadership pro; transformational management and turn-around success across industries. Systematic problem solver: Lean/Six Sigma, DMAIC, ISO, TQM, TPM, CI, Kaizen, FMEA, Root Cause, SPC, etc. Track record of organizing operational success through attention to detail.
People Maker: developer of strengths; productive motivator through accountability, recognition Creative problem solver: driver of new ideas, strong policies, complete procedures, processes and teams Communicator: published author, acknowledged case-maker, excellent sales & presentation skills.
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Facility management personnel in all industries have waited a long time for computer technology to become applicable and affordable enough to implement in their respective maintenance efforts. In recent years, flexible, dependable and economical computerized maintenance management systems (CMMS) have become available to help fight the never-ending struggle to operate and maintain buildings of all shapes, sizes and functions.
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