MRO means Maintenance, Repair, and Overhaul. The MRO concept was originally developed by the United States Department of Defense for military and aviation assets. However, most companies outside the aviation and aerospace industries rarely need complete asset overhauling. So, more often than not, MRO stands for Maintenance, Repair, and Operations.
What is MRO?
MRO describes all the actions, labour, and supplies required to keep all the individual machines and equipment running. This includes anything from replacements or spare parts to tools for tests, inspections, measurements, and repairs. In short, everything you might need for run of the mill maintenance, repairs, and operations. As an example, here are a few items you should include on your MRO:
- spare parts for manufacturing equipment, i.e. pumps, belts, valves;
- repair tools or equipment for ongoing or scheduled interventions;
- consumables, i.e. lubricants, sealants, gloves, batteries, protection gear, paper;
- safety equipment, i.e. fire extinguishers, carbon monoxide detectors.
What are the benefits of MRO?
Listing all the things we mentioned above might seem like a lot of work, but the benefits are significant:
- less operating costs, because you know exactly the supplies you need;
- reduced turnaround times, since you can improve stock and storage space management;
- increased productivity, due to higher availability and maintainability;
- improved customer satisfaction, which is a direct consequence of all of the above.
However, MRO is not all about productivity. Want to take it to the next level? Two words: MRO Procurement.
What is MRO Procurement?
In a production facility, we can divide expenses in two categories: direct spend, and indirect spend. Direct spend refers to all the purchases involved directly in production, which makes up the supply chain. Supplies that are not in the final product, such as materials and tools to complete maintenance tasks, fall into the indirect spend category.
Although they don’t make it to the final product, these supplies are what keeps your plant running. This is why indirect procurement – the sourcing of all the materials that ensure availability – is a big part of effective management. You can see what we’re getting at. Managing stock and supplies for maintenance and repairs is much easier through MRO procurement.
In general, we can split up MRO procurement into the following groups:
- infrastructure repair and maintenance, which includes anything in infrastructure maintenance from the roof to HVAC repairs, landscaping, lighting systems, doors and windows, waste pickup and disposal, etc.
- production equipment maintenance and upkeep, which includes preventive and predictive maintenance, plus reactive maintenance such as mechanical, electromechanical, electronic repairs.
- material handling equipment, anything that is used to transport raw materials to production lines or taking finished goods to warehouses, containers, or loading docks.
- tools & consumables, including hand tools, cutting instruments, clamps, personal and single-use protection equipment, glue, lubricants, and cleaning supplies.
Are MRO and MRO Procurement right for you?
Do you ever find yourself thinking where all the money went? That’s probably because you’re only taking into account direct production spending, and overlooking indirect expenses. Controlling these operational costs will reveal “hidden” expenditures, and that is why MRO is a good technique for anyone running a big plant or production facility.
Many of these maintenance supplies seem like small expenses. The cost of a couple of gloves, for example, might seem negligible in the final product price. But things tend to add up in large facilities, and MRO will prevent you from overlooking operational costs. You’ll probably find that an MRO procurement strategy is cost-effective, especially if several departments have been making their orders independently.
Keeping an eye on every expense, direct and indirect, will allow for better decision-making, as well as better inventory and storage management. We recommend storing every MRO supply in one place so that technicians have everything they require on-hand. Finally, gathering all your data in one platform also makes it easier to track inventory and the costs associated with maintenance and repairs.
If you’re curious to find out how Infraspeak drives more intelligent decisions, please reach out to one of our specialists, and they’ll be happy to schedule a demo with you.