If you deal with inventory operations, you probably wonder: “What does MRO stand for?”. MRO is an abbreviation that stands for maintenance, repair, and operations.
It refers to the items, tools, and various operations that keep an organization functioning in procurement terms, including the physical maintenance of the facility with its operating systems and the equipment utilized to create the facility’s core production items.
You may also see it referred to as ‘indirect procurement‘ since it is vital for supporting your business activity but is not immediately included in the final product you generate.
Companies that prioritize and take MRO management seriously will have more control over operations that affect cash flow, keep malfunctions within the organization to the minimum, have an efficient inventory management system, and more.
What does MRO stand for? Three main types
MRO can be classified into the following categories;
- repair and maintenance of production equipment,
- maintenance of material handling equipment,
- infrastructure maintenance, tools, and consumables.
Repair and maintenance of production equipment
It is essential to understand that you can sell anything without precisely functioning machinery that produces the final product, let alone run a business. Over time, in manufacturing equipment, you can face issues like delays, downtime, and other disturbances. To the companies that heavily depend on equipment, these challenges can be damaging for profitability and not only. Therefore consistently monitoring the condition of your equipment is imperative.
Maintenance of material equipment
Material handling equipment includes conveyor systems that are permanently placed to portable equipment, devices like forklifts, bulk containers, storage systems, to name a few. It can also contain automated equipment for pick-and-pack processes, such as robots. It is essential to understand that material handling equipment can refer to a variety of machines. Some of the mentioned pieces of equipment are crucial for transporting and shipping goods. Some other types of equipment may not directly impact the manufacturing process but are still vital to keep the process running well.
It is crucial to understand that, for instance, if your conveyor system is not maintained correctly and broken down, you’ll have the entire production line disrupted. Therefore all equipment needs to be handled thoughtfully.
Infrastructure repair and maintenance can include repairing doors, windows, landscaping the space around the company, snow removal, maintaining heating, having air-conditioning systems, lighting systems, waste management, to name a few.
Keep in mind that infrastructure and capital repairs may vary depending on the focus of your business. It may also depend on whether the property is leased or owned by an organization.
Consumables and tools
Consumables and tools refer to materials that keep equipment functioning smoothly daily basis. It may encompass minor details like oiling a sticky wheel or clearing up dust, yet these jobs are critical to the proper operation of your business. These processes will also require you to invest specific resources as you’ll need to acquire appropriate tools for each task. Below find a list of some of the MRO tool essentials:
- powered hand tools such as drills, grinders, circular saws, to name a few
- ESD protection, such as trays, mats, wrist straps
- Wrenches, sockets, pliers, cutters, clamps, screwdrivers, and other hand tools
- consumables such as adhesives, sandpaper
- cleaning supplies such as rags, wipes, mops, brooms, and more
What are the benefits of MRO?
- With a better understanding of your equipment and spare part consumption, you will make more informed decisions and avoid problems that might otherwise be beyond your control. The absence of reliable data regarding MRO can result in weak interactions with suppliers. However, you can choose a vendor that can meet your specific maintenance and inventory requirements best with a data-driven strategy.
- With precise control over MRO, you will be able to keep the number of malfunctions in your business to a bare minimum. Consider that when equipment fails unexpectedly, the firm loses a lot of financial resources. If you take MRO management under your control and start to approach it proactively, you’ll be able to limit the frequency of unplanned disruptions. This way, you will ensure that you always have the proper components, equipment, and personnel on hand to keep things moving whenever you need them.
- Inventory management can be a challenging process, and you would want to avoid overstocking (having excess inventory) or understocking (less inventory than demanded). Data on maintenance requirements, parts consumption, equipment complexity, and other factors can help you precisely predict your long-term inventory needs. This will allow you to get better category discounts, negotiate prices and fulfillment agreements, and more.
How can you efficiently manage maintenance inventory?
To manage MRO efficiently, you will need to have precise inventory management control in place. With accurate inventory control, you will have the necessary resources on hand in case of an unexpected breakdown. However, you should be careful as maintaining products in the warehouse costs tangible financial resources.
Naturally, you should prepare for unforeseen challenges, but you don’t want to spend too much money on inventory. It is imperative to constantly question yourself whether you have all the necessary components for maintenance whenever you need them. Are there things that you still miss? It is also essential to check whether you are not overstocking or understocking items.
To handle MRO effectively, you have to consider the following factors.
First and foremost, you must be aware of all working asset capital in your company. Your replacement pieces of equipment must be connected to their matching equipment at all times. You may also consider taking advantage of modern inventory management systems like eSwap and managing scheduling and tracking components more smoothly and efficiently.
Always make sure to monitor and test different spares of your inventory systematically. Consider that while some spares can endure harsh circumstances for extended periods, you should consistently check and take care of others. It is vital to establish procedures to ensure that your maintenance and warehousing workers know which spares require what sort of attention.
Last but not least, keep in mind that MRO inventory management entails much more than merely lowering inventory levels. It’s also significantly larger than simplifying spare components. By knowing what MRO stands for, you will ensure that the appropriate components are accessible whenever your firm needs them. This means, you can ensure that your business runs as smoothly and successfully as possible.