Maintenance, Repair, Overhaul (MRO)

What is MRO?

MRO includes all the components required to keep a company focused on its core mission, which includes tests and repairs as well as the supplies and equipment required to keep all the individual components, machines, and equipment running.

Overview

The term MRO was first used by the United States Department of Defense but has become standardized across multiple industries today. According to the DOD, MRO includes the replacements, tests, measurements, and repairs required to keep or restore a component to a usable state. It includes all the actions as well as the procurement of supplies and labor to do so.

MRO is often referred to as indirect procurement because it requires the purchasing of supplies, materials, and tools to complete a wide variety of maintenance tasks, but these materials are not used in a company’s finished product.

In some cases, companies ignore the MRO purchasing decisions compared with how they manage the supply chain for the actual product they are manufacturing. This oversight can be a costly mistake. But by implementing an effective MRO strategy, businesses can reveal the many hidden costs in this area and make better decisions to positively affect the company’s bottom line.

Common types of MRO maintenance

The MRO category is broad and includes three common types of maintenance that most plants and facilities undertake.

  • Preventive maintenance: PM tasks are scheduled on regular basis and designed to keep machines, components, and other equipment functioning well. Ideally, preventive maintenance extends the life of machinery and reduces the number of failures. However, it is possible to “over-PM” equipment.
  • Corrective maintenance: Corrective maintenance tasks are performed after a failure occurs. This involves fixing equipment, machinery, or components, as well as replacing components that have broken down.
  • Predictive maintenance: PdM tasks are created once a facility has monitored particular processes over time and considered historical performance to predict future failure incidents. Steps are then taken before those failures occur.

Examples of MRO supplies, tools, and equipment

MRO supplies, tools, and equipment include anything that a plant or facility uses that does not end up in the final manufactured product. Some examples are listed below.

  • Equipment: Any manufacturing equipment as well as spare parts including pumps, belts, and valves, used to produce the end product are part of MRO.
  • Consumables: Cleaning supplies, lubricants, and sealants necessary to keep machines and equipment functioning fall under MRO procurement. Janitorial supplies, paper products, gloves, and batteries are other consumables that are commonly purchased.
  • Safety equipment: MRO includes items such as fire extinguishers, carbon monoxide detectors, and fall-prevention gear.
  • Back office items: Computer systems and office supplies play a key yet indirect role within a manufacturing facility.
  • Repair and service tools: MRO also includes any tools or equipment used to make ongoing repairs or service the physical plant and campus of a company. This can include common tools such as drills and hand tools as well as lawn care and landscaping equipment and supplies.

How to manage MRO

Although many businesses have a refined purchasing procedure and streamlined process for managing the supplies required in manufacturing their final product, many companies tend to overlook MRO supplies and equipment purchases. Over time, these costs can add up and significantly affect profit margins.

Businesses must have an organized system to manage and track MRO supplies. In addition, having a dedicated space onsite for storing and managing the inventory of the most frequently used items can reduce the time, labor, and stress of restocking. Both these steps ensure that a company has the materials and supplies on-hand as soon as a maintenance team requires them.

Purchasing staff should develop long-term relationships with suppliers of MRO materials to secure better prices and a steady supply of equipment, materials, and disposables. MRO management can also be outsourced to a third-party partner who can be onsite and help manage MRO inventory and related volume discounts.

Businesses should establish KPIs in the MRO area to help track and measure performance and improvement over time, providing more data to drive better business decisions in the future.