MRO is an acronym for maintenance, repair, and operations. It describes the day-to-day and long-term upkeep of the tools, supplies, production equipment and facilities required to manufacture goods. It is also referred to as maintenance, repair and overhaul.
MRO includes activities comprising MRO inventory management and those within predictive, preventive and corrective maintenance strategies. MRO processes are critical for keeping factories running. They can also help organizations meet their KPIs, enable safer work environments, increase asset lifespan and sustainability, reduce equipment breakdowns and minimize stockouts.
While most manufacturing organizations conduct a version of MRO to ensure that machines are clean, up-to-date and ready to produce goods, some industry leaders adopt a more comprehensive MRO strategy. This methodical approach to MRO is called MRO management.
MRO is typically divided into four types:
Tooling and consumables entail managing the inventory of items needed to complete the production process. Tooling includes hand tools such as lathes, drills and injection molds. Consumables are limited-use or disposable goods such as lubricants, adhesives, gases, gloves, masks and tools such as welding rods and soldering tools.
This type of maintenance ensures that the facility and surrounding grounds remain in good operating condition. These tasks can be conducted by an internal or third-party maintenance team and include janitorial services, roof repair, pest control, plumbing and landscaping.
Material handling deals with the assets needed to import materials to the production line and export finished products to customers. Maintenance and repair in this type of MRO focuses on reducing idle time. Assets might include equipment such as conveyors, forklifts and bulk containers.
This type of MRO focuses on the maintenance and repair of critical production machinery and systems. The goal is to reduce equipment downtime and minimize raw material waste. It can involve a mix of both preventive and predictive maintenance and often requires the most work.
To produce finished products, factories depend on dozens to thousands of machines (consisting of hundreds of individual parts) remaining fully operational. As such, equipment and facility upkeep through MRO activities directly impacts an organization’s operational metrics, sustainability goals and key performance indicators (KPIs). These include cost control, equipment downtime and uptime, efficiency and lead time.
MRO is also closely tied to an organization’s supply chain management (SCM)—the activities of one affect the activities of the other. For example, upstream supply chain issues such as missing MRO inventory (from custom machine parts to wrenches and rubber gloves) can lead to employee and equipment downtime. Subsequent late shipments, product shortages and unhappy customers then affect the downstream supply chain.
There are many benefits of performing MRO activities, including:
Just one piece of equipment not working can throw the entire production line into chaos. This disruption can negatively impact the company’s bottom line and create scenarios where employees are idle. Organizations that incorporate MRO can better plan routine maintenance so they can keep their factories online.
An automated and meticulous approach to MRO means that organizations are better equipped to know when all their MRO equipment, tools and products need replenishment or if they have too much of a product, which leads to an overfilled stockroom.
Many regions and industries have regulations related to occupational health and safety, the environment and equipment and machinery upkeep. Ensuring that heavy industrial equipment has the necessary replacement parts, has been cleaned and serviced and runs efficiently minimizes noncompliance. This is especially relevant for highly regulated organizations like aerospace, government and original equipment manufacturers (OEMs).
MRO inventory, or MRO spare parts inventory, varies by business. Examples of MRO supplies include large infrastructure items: turbines, air conditioning systems, landscaping tools, generators and smaller items such as gears, cleaning supplies, office supplies and safety equipment such as personal protective equipment (PPE).
The management of MRO items is a major component of MRO strategy because both inventory shortages and unnecessarily elevated inventory levels can create problems. Organizations that do not understand their MRO equipment purchases or requirements can grossly underestimate the MRO inventory cost of producing goods, and this underestimation can hurt overall profitability. Asset-intensive industries (telecommunications, oil and gas, and healthcare) face more pressure to understand and optimize their MRO inventory as they manage digital transformation with cost savings and maintaining or improving service levels.
MRO inventory management strategies also vary. Some organizations might engage in a regimented MRO procurement process to streamline purchasing and ensure the best possible pricing for high-quality MRO materials. Others might turn to inventory management software to track purchase orders and make real-time decisions about MRO inventory. Others might still look outward with their MRO inventory management strategy and lease some tools and products through vendor-managed inventory.
Preventive, predictive and corrective maintenance strategies are the most common maintenance approaches:
Preventive maintenance is the act of performing regular maintenance activities to help prevent unexpected failures. It covers a range of proactive activities and general tasks. For example, each production component within a system requires regular servicing or even repair or replacement of certain parts. But at a higher level, preventive maintenance also involves upkeep of the physical plants themselves. Key components of a physical plant require timely servicing. An example is a factory’s HVAC system.
Predictive maintenance uses real-time and historical data to predict the future potential health of equipment and anticipate problems in advance. It relies on various technologies, including the Internet of Things (IoT), predictive analytics and artificial intelligence (AI). Predictive maintenance enhances preventive maintenance by providing access to continuous insights into the actual condition of the equipment rather than the expected condition.
Sometimes called reactive maintenance, corrective maintenance tasks are only performed once an asset has broken down. This approach is based on the belief that costs sustained during asset downtime or because of necessary repair are typically lower than that of maintaining an overall maintenance program. Corrective maintenance is best suited to organizations with low-cost, noncritical assets.
Some organizations may choose to integrate software solutions into their MRO strategy, such as:
A CMMS is software that centralizes maintenance information and facilitates the processes of maintenance operations. It helps optimize the use and availability of physical equipment. At the core of a CMMS is its database. The data model organizes information about equipment, materials and other assets required for production. Key benefits include streamlined work orders, knowledge transfer and maintenance standards and access to historical and real-time asset data.
EAM systems maintain and control operational assets and equipment to optimize their quality and utilization throughout their lifecycle, increase productive uptime and reduce operational costs. They use data from across the asset lifecycle and often look beyond maintenance to incorporate considerations around safety, the environment, inventory, workers and more. Key benefits include centralized asset information, elevated maintenance management and automation of MRO inventory management tasks.
Some organizations might choose to deploy more powerful analytics associated with IoT and AI with solutions like Asset Performance Management (APM) and Asset Investment Planning (AIP). These systems connect the production floor to the balance sheet using real-time data on the health and output of assets. They continuously model the value and risks from current operations, inventories and production outputs. These systems provide instrumental support to predictive maintenance strategies.
Predictive maintenance builds on condition-based monitoring to optimize the performance and lifespan of equipment by continually assessing its health in real time.
Preventive maintenance is the act of performing regularly scheduled maintenance activities to help prevent unexpected failures in the future.
Preventive and predictive maintenance are proactive maintenance strategies that use connectivity and data to help engineers and planners to fix things before they break.
A CMMS is software that centralizes maintenance information and facilitates the processes of maintenance operations.
EAM is the combination of software, systems and services that maintain and control operational assets and equipment.
Finding the right balance when managing inventory is crucial for helping ensure the success of MRO initiatives, specifically the spare parts that support them.