$1M in Obsolete Inventory Identified Across 6,100 SKUs at a Large Steel Manufacturer
The Problem
One of the most fully integrated stainless steel producers in the United States, identified that an excessive amount of capital was tied up in MRO storeroom inventory. A significant portion of stocked material had not moved in years, and visibility into item criticality, usage history, and justification was limited.
Previous inventory reduction efforts had been executed without sufficient maintenance input. As a result, decisions were made that did not fully account for operational risk or equipment strategy. The consequences of those decisions persisted for years in the form of emergency purchases, extended downtime risk, and a loss of confidence in the storeroom.
Senior leadership issued a clear mandate: reduce storeroom inventory value, identify and remove obsolete material, justify stocked items based on operational need and risk, and implement sustainable processes to prevent recurrence. The objective was not a one-time inventory purge, but a repeatable, governed system aligned with long-term maintenance and reliability objectives.
Most organizations treat the MRO storeroom as a transactional support function. At this manufacturer, the storeroom had drifted from its role as a strategic asset, resulting in excess working capital, degraded trust between maintenance and supply chain functions, and limited accountability for stocking decisions across departments.
The Client
Large Steel Manufacturer
The Project
Identify Potential Obsolete Inventory
Services Leveraged
MRO Process Guides, MRO Coaching
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The Solution
The manufacturer partnered with Marshall Institute for training, assessment support, and implementation guidance. This partnership ensured alignment to industry best practices and provided proven process frameworks rather than internally developed, ad hoc solutions.
The manufacturer intentionally formed a cross-functional team including representatives from Maintenance, Operations, Supply Chain, Engineering, and Finance. Team members were selected based on proximity to the issue and decision-making influence, ensuring that recommendations reflected real operational needs. This working team later evolved into the formally chartered Materials Management Committee (MMC).
Early analysis identified obsolescence and slow-moving inventory as the highest-impact opportunities. The cross-functional team developed a formal obsolescence review process using Marshall Institute process guide templates as a baseline, customized to align with the organization’s asset base, organizational structure, and risk tolerance. Key elements included clear criteria defining obsolete material, defined review boundaries with explicit exclusion of critical spares, standardized roles and decision rights, and documented disposition options.
Inventory was divided into manageable departmental groupings for subject matter expert review, prioritized by total inventory value to maximize early impact, and reviewed using AI-supported methods integrated into Power BI dashboards. This approach enabled consistent, repeatable reviews rather than a one-time clean-up exercise.
Recognizing that obsolescence management alone would not ensure long-term storeroom performance, the manufacturer utilized Marshall Institute to conduct a broader storeroom assessment. Based on these findings, the organization formally chartered the Materials Management Committee, with members selected based on functional representation, subject matter expertise, and decision authority. Marshall Institute provided targeted training to align committee members on materials management fundamentals, roles and responsibilities, and best-practice decision frameworks.
The Outcome
The obsolescence initiative delivered significant financial results. Across the ~6,100 SKUs reviewed:
- ~10% of reviewed spares were classified as obsolete or no longer needed
- ~$1M of inventory was identified as obsolete
Beyond financial outcomes, the initiative delivered significant operational and cultural benefits. Alignment improved across maintenance, operations, and supply chain functions. Confidence in storeroom decisions increased. A clear vision, mission, and goals for materials management were established and shared across departments.
The Materials Management Committee now serves as a standing governance body, enabling continuous improvement and ensuring that storeroom decisions remain aligned with operational risk, asset strategy, and business objectives. With continued Marshall Institute support, the MMC is actively refining the obsolescence process, finalizing a critical spares assessment, developing a standardized new item setup process, and defining storeroom KPIs and performance metrics.
This experience demonstrates that meaningful storeroom improvement requires more than inventory analysis or isolated reduction efforts. By grounding decisions in cross-functional governance and structured, repeatable processes supported by industry expertise, the manufacturer reduced excess inventory while strengthening maintenance and reliability performance. The organization is now positioned to treat the storeroom as a strategic asset rather than a transactional function.