Keeping facilities in good shape, regularly maintaining production and transportation gear, and keeping stock of personal protective equipment, hand tools, cleaning supplies, and everything in between is crucial. Even though these supplies and activities make up a small part of running a business (around 5 to 10% of product costs, according to Supply Chain Game Changer), they can cause a big headache if not handled right.
For example, imagine a crucial component for equipment maintenance is out of stock, and production comes to a halt for an entire day. That downtime could mean losing hundreds of thousands of dollars. This is where MRO (or maintenance, repair, and operations) steps in as the unsung hero of your production process. It ensures every part of your business machine is well-maintained and working at its best. In this blog, we’ll explore what is MRO and why mastering MRO might just be the key to unlocking unparalleled productivity and savings.
What Does MRO Stand for?
MRO stand for maintenance, repair, and operations and includes all the activities necessary to maintain a facility and keep the production process running smoothly without actually touching the production process. As of 2021, the global market for maintenance, repair, and operations was valued at a whopping $254.05 billion with projections soaring to $291.32 billion by 2027, making MRO an increasingly essential consideration for many industries.
The goal of MRO is to make sure every department has the materials they need to be efficient. This involves keeping essential supplies readily available, achieving organizational objectives such as minimizing downtime, enhancing safety, extending the life of assets, avoiding excess stock, and safeguarding timely customer deliveries.
A robust MRO strategy has a direct impact on a company’s key performance indicators (KPIs), which include metrics like equipment downtime, maintenance backlogs and overtime, asset performance, and operational efficiency.
Which industries use MRO?
MRO plays a crucial role in various industries, ensuring the smooth operation of essential infrastructure and equipment. Here’s a closer look at some sectors where maintenance, repair and operation practices are essential:
Advanced Technology:
In the fast-paced world of technology, MRO practices are important. Industries like semiconductor manufacturing, electronics, and telecommunications heavily rely on careful maintenance to keep cutting-edge machinery and electronic components running efficiently.
Renewable Energy:
As the world embraces sustainable energy, MRO becomes critical in the renewable energy sector. Regular maintenance is essential for wind farms, solar installations, and other green energy facilities to maintain the performance of turbines, solar panels, and energy storage systems.
Aviation and Aerospace:
Beyond traditional manufacturing, MRO is the backbone of aviation and aerospace. Airlines, satellite operators, and space agencies depend on careful maintenance to ensure the safety and reliability of aircraft, satellites, and spacecraft, underlining the critical nature of MRO in these high-stakes environments.
Biotechnology:
In the field of biotechnology and pharmaceuticals, MRO practices are essential for maintaining cutting-edge laboratories, bioprocessing equipment, and research facilities. This ensures the integrity of experiments, the reliability of data, and compliance with stringent industry regulations.
Smart Infrastructure:
The rise of smart cities and interconnected infrastructure adds a new layer to MRO. Smart grids, intelligent buildings, and automated manufacturing plants require proactive maintenance to ensure the optimal performance of sensors, actuators, and interconnected systems.
Defense and Security:
National defense heavily relies on MRO practices to sustain military assets and infrastructure. Whether it’s military vehicles, communication systems, or defense installations, regular maintenance is imperative for readiness and operational effectiveness.
Maritime and Offshore:
The maritime industry, covering shipping and offshore exploration, highlights the importance of MRO in preserving vessels, drilling platforms, and underwater infrastructure. Regular inspections and repairs are crucial to prevent corrosion and ensure maritime safety.
Precision Agriculture:
In agriculture, precision farming technologies need careful maintenance to optimize yields. Drones, GPS-guided machinery, and sensor-based systems require routine checks and repairs to enhance agricultural productivity and sustainability.
Examples and Different Types of MRO
MRO covers pretty much everything a company needs for its day-to-day operations. But what does that involve? Let’s break it down by looking at different areas under maintenance, repair, and operations, along with the materials required:
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Facility Management:
Keeping the workplace in top shape is crucial. Whether it’s a factory, an office, or a storage space, all aspects of the building need regular maintenance. So, anything related to maintaining and servicing the facility falls under MRO practices.
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Industrial Equipment:
MRO naturally includes the equipment directly involved in running the business—whether it’s manufacturing products or providing services. This encompasses all sorts of materials needed for machines and equipment, like motors, pumps, and spare parts.
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Consumables:
Your MRO planning should also cover essential consumables. Things like cleaning supplies, office essentials, and other crucial items keep the workflow smooth. Items such as adhesives, glasses, and gloves all count as part of the MRO inventory.
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Maintenance Supplies:
Just as important as consumables are essential maintenance supplies. Tools, spare parts, and other equipment play a vital role in the company’s day-to-day routine, making them integral to MRO.
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Safety Equipment:
If your team needs safety gear to get the job done, safety equipment is a crucial part of MRO. Malfunctioning equipment not only disrupts projects but also poses risks to your workers on the job. Subsequently, ensuring the proper functioning of safety equipment is a key aspect of MRO.
Benefits of MRO
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Preventing Unexpected Downtime:
When a single machine malfunctions or a crucial raw material is unavailable, it can disrupt the entire production process, causing financial setbacks and leaving employees idle. By implementing MRO practices, organizations can proactively schedule maintenance, ensuring that their production lines remain operational and competitive. This allows for strategic decision-making about which equipment to take offline for maintenance while optimizing the use of the remaining machinery.
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Balancing Inventory Levels:
Adopting an organized MRO strategy enables organizations to monitor the status of equipment, tools, and supplies, preventing both shortages and excess stock. Running out of even minor items like glue or cleaning supplies can disrupt the manufacturing process, while overstocking incurs unnecessary storage costs and the risk of material decay. An automated MRO approach helps maintain optimal inventory levels, allowing for better responsiveness to market trends and fluctuations in demand.
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Expense Monitoring:
Tracking Maintenance, Repair, and Operations expenditures provides valuable insights for organizations to assess supplier relationships, consider alternative products, or explore vendor-managed inventory solutions. This visibility into spending patterns allows for informed decision-making to optimize costs and enhance operational efficiency.
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Ensuring Regulatory Compliance:
Government regulations and industry standards mandate safety measures for employees and the quality of manufactured goods. Compliance with occupational safety, environmental, and equipment regulations is crucial. MRO practices contribute to maintaining a safe working environment by ensuring that heavy equipment is regularly serviced, equipped with necessary replacement parts, and meets all compliance requirements. This commitment to safety safeguards employees, particularly those working in challenging manufacturing conditions, and reinforces the organization’s responsibility to provide a secure workplace.
MRO vs OEM
OEM (Original Equipment Manufacturer) and MRO (Maintenance, Repair, and Operations) are two different types of companies that operate in different areas of the supply chain for which we provide specific solutions.
Challenges of MRO
Every organization faces a few hurdles when diving into a solid MRO (Maintenance, Repair, and Operations) management plan.
- Getting Started Costs: Revamping your MRO process doesn’t come free. There are initial expenses for new tools, software, or equipment. It’s an investment that pays off over time.
- Shifting Gears in the Organization: Changing how things are done can be a bit challenging. This shift demands employee reskilling, new tools, and software. It needs the green light from the top, clear guidelines, and some training. The initial complications smooth out as the team gets used to the upgraded and more efficient process.
- Tech Integration Challenges: Bringing in new tech solutions like Computerized Maintenance Management Systems (CMMS) or Enterprise Asset Management (EAM) systems isn’t an overnight affair. It takes time, patience, and often a phased approach where the existing system runs alongside the new one during implementation, testing, and rollout.
The Effect of MRO on Supply Chain Management
MRO costs typically range from “5 to 10% of the cost of goods sold (COGS),” according to Supply Chain Game Changer. That’s probably why many leaders don’t give MRO the attention it deserves. But it’s important to give MRO some focus, because what will you do when a missing piece of equipment brings production to a halt?
Even the tiniest missing item—be it a tool, part, or chemical component—can throw off assembly lines for hours. Depending on the industry, one hour of downtime can mean losing hundreds of thousands of dollars in profits. Late deliveries to customers, employees waiting around, and missed goals all add up to unnecessary financial losses.
The consequences of poor MRO management aren’t just financial; they can also be downright dangerous. Running out of a critical safety component, for example, could put employees at risk. So, keeping a tight ship on MRO isn’t just about supply chains; it’s about keeping things running smoothly and safely.
Simplify MRO with NEXGEN’s CMMS Software
Navigating MRO management can be a real challenge. Operational and maintenance managers have their hands full, juggling various aspects to efficiently handle material and supply levels.
This involves keeping tabs on every asset in individual facilities, monitoring inventory, and staying on top of scheduled maintenance. Fortunately, robust software can turn the tables. With a tool like NEXGEN’s computerized maintenance management system (CMMS), your maintenance crew is always equipped with the right parts and tools at the right time.
How does it work? Well, NEXGEN’s CMMS allows department leaders to track work orders in real time, manage MRO inventory levels, export data for suppliers, and generate cost reports. Plus, it’s user-friendly and available across desktops, tablets, and phones.
Ready to streamline your MRO game? Click the link below to schedule a demo of NEXGEN.
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