Maintenance, repair and operations (MRO) is a discipline that manages both the day-to-day as well as the long-term process around manufacturing materials, equipment, and even the actual factory itself, allowing manufacturers to respond to supply chain issues proactively or in real-time.
MRO helps manufacturers overhaul and manage not only the equipment and consumable materials they use to build items but the actual factory itself. It has become only more important as external and internal pressures have complicated the supply chain in recent years.
Every day, factories depend on dozens to thousands of machines working in tandem to produce finished products that the company will eventually sell. Keeping that factory online and running requires all those machines, which are comprised of hundreds of individual parts, to remain pristine and running as scheduled.
As such, manufacturers need a regimented process to manage every aspect of their factories. So what exactly does MRO mean, and how can companies use it to their advantage?
Companies that are prepared for external events are likely to outperform their competitors. MRO’s importance in a competitive world cannot be understated. Every manufacturer is laser-focused on producing value, so they need their factories set up to execute their manufacturing process efficiently and effectively.
Successfully turning raw materials into finished products requires factories to run like well-oiled machines where they’re able to forecast both raw material needs and finished product levels so they always have the right equipment online, the right supplies and the right personnel to execute. For many organizations, that means they need MRO inventory management.
Prioritizing MRO is a component of supply chain management as it requires managing the flow of goods from different vendors to ensure an organization’s production output is on schedule. But it’s not just a process for managing technology. Factories depend on dozens to hundreds of workers who, rather than making the products a company sells, are there to make sure the factory is on schedule and the employees responsible for producing products have everything they need to do their work. They depend on a comprehensive process to make sure they have the tools, equipment, and cleaners they need to keep the machinery online and working properly.
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MRO refers to the act of maintaining, repairing or otherwise keeping operational the tools, supplies, and equipment required to manufacture goods. MRO management is the regimented process by which organizations conduct MRO. While every organization that manages factories conducts its own version of MRO, whether it has a specific approach or even understands what MRO means, organizations have recently embraced a more methodical, comprehensive and sophisticated MRO management process.
Ultimately, every organization that produces goods and maintains a factory has to ensure their machines are clean, have up-to-date parts and are ready to produce goods. However, MRO management is a more comprehensive strategy based on best practices and comprehensive guidelines.
Creating a smarter MRO management approach enables organizations to keep better track of their MRO metrics and key performance indicators (KPIs), such as cost control, equipment uptime, and mean time to repair.
Inventory management is a huge component of any MRO strategy. Just as running out of inventory items can create an issue, companies also do not want unnecessarily elevated stock levels (e.g., too many raw materials and equipment), which creates expensive carrying costs. Maintaining strong inventory control ensures you have the right amount of MRO supplies. Inventory is best thought of as an investment1 and, as such, organizations must approach it with diligence, precision and discipline to successfully manage their inventory levels.
While the organization likely purchases many of the products that require maintenance, repair and operations, it also may choose to lease some of its tools and products through vendor-managed inventory.
MRO equipment, while necessary, can also become a huge cost for organizations if they do not approach procurement correctly. Organizations that do not have an understanding of their MRO equipment purchases or requirements to effectively run their factories will grossly underestimate the MRO cost of producing their goods, subsequently affecting their overall profitability. In addition, the absence of a methodical procurement process limits a company’s ability to identify the best suppliers offering MRO goods and equipment at the best possible prices.
Therefore, it pays for organizations to engage in a regimented MRO procurement strategy to streamline their purchasing process for MRO materials.
Regardless of how a company pursues its maintenance, repair, and operations inventory, it would be wise to use inventory management software to optimize its processes and keep track of purchase orders, lead times, inventory costs, and the type of inventory it needs.
As companies decide whether to engage in predictive maintenance or preventive maintenance2, they must have the right tools for diagnostics, maintenance and repairs to keep machinery in optimal shape, regardless of how they schedule maintenance. This requires more sophisticated methods of digital office supplies, including spreadsheets, other software, hardware and cloud costs for maintaining information management for their MRO items and supply chains.
There are different types of MRO that companies need to focus on. The below examples of MRO demonstrate the full range of approaches any organization must consider as they keep their factories running on time.
This includes things like spare parts, lubricants, hand tools and other infrastructure repair products to conduct repair activities like fixing machines before they break down, promoting strong levels of upkeep.
In order to make sure a factory can produce goods, the factory itself must be in working order. Infrastructure repair and maintenance ensures the foundation of the factory is in good condition and that there are ample supplies (e.g., janitorial supplies, cleaning supplies and tooling and consumables. An integral part of any production process, tools are items that are used during the creation of finished goods. Key tools include lathes, drills and injection molds, and key consumables include lubricants, adhesives, gases, gloves, masks and tools like welding rods and soldering tools. Therefore, a company must have a good handle on the rate of usage of disposable goods like consumables so they are never at risk of running out of them during a workday.
Once a product is manufactured, the company then needs to move it onto the vehicles that will transport it to the wholesaler or retail operation. From conveyors to forklifts to other vehicles and moving equipment, this is a crucial part of any factory management program. It does an organization no good if it builds products but does not have a reliable way to transport them. As such, it must take as much care to ensure these pieces of equipment are well-maintained as the actual manufacturing equipment in the factory.
There are several challenges every organization must understand when undertaking a robust MRO management strategy.
Maintenance, repair and operations
Predictive maintenance helps predict the future potential state of equipment to determine when maintenance operations should be performed
Reliability centered maintenance (RCM) is a process whereby organizations identify the physical assets (e.g., machines or tools) required to produce their products and create a comprehensive strategy for keeping them online and operating at an optimal level.
Short for computerized maintenance management system, CMMS is software that helps manage assets, schedule maintenance and track work orders.
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