Beyond the raw materials and equipment needed for production, there’s a lot that goes into a company’s ability to keep things running smoothly. Facilities need to be kept in good condition, production and transportation equipment needs regular maintenance, personal protective equipment inventory needs to be stocked, as does inventory for hand tools, cleaning supplies and everything in between.
These supplies and activities are a small part of operating a business — they account for just 5%-10% of product costs — but they can have a huge impact when not managed properly. If a component for equipment upkeep is out of stock and production shuts down for a day, manufacturers stand to lose up to hundreds of thousands of dollars a day. If PPE (Personal Protective Equipment) runs out, employee safety is at risk. At the same time, up to half of items for Maintenance, Repair and Operations sit in storage for a year or more. Not only does this mean cash is tied up in storage, but it could also lead to unnecessary waste of items that expire, like batteries, or materials that may become noncompliant as regulations change, like various chemicals and substances.
What Does MRO Stand For?
MRO stands for Maintenance, Repair and Operations — or sometimes Maintenance, Repair and Overhaul — and refers to the equipment, tools and activities associated with the daily operations of a business. It doesn’t include materials, products and services that are directly used in production, but rather the glue that holds everything together. MRO may include HVAC (Heating, ventilation, and air conditioning) maintenance, facility lighting, janitorial services, CNC (Computer Numerical Control) machinery, drill presses, forklifts, jacks, PPE, powered and manual hand tools, mops, brooms and even furniture. MRO can be routine, planned maintenance activities, also called preventive MRO; it can be predictive, when data indicates machinery is deteriorating and needs maintenance; or it can be corrective, after an incident occurs.
Types of MRO
MRO is often divided into four categories, according to industrial sourcing platform Thomas:
- Infrastructure repair and maintenance keeps a business’ facilities up and running, in top condition.
- Production equipment repair and maintenance ensures all equipment and systems run smoothly.
- Material handling equipment maintenance involves maintaining equipment and systems for transporting raw materials and final products to and from production lines.
- Tooling and consumables is the management of any smaller, handheld tools required in day-to-day operations.
MRO is an often overlooked, but essential part of doing business. It ensures facilities, equipment, systems and tools are stocked, maintained and safe to use. Because of the implications MRO can have on costs, productivity and safety, most businesses digitize the MRO process to optimize inventory levels, streamline procurement, improve supply chain relationships and stay ahead of any equipment failures.