A brief guide to MRO

MRO is the acronym for maintenance, repair and operations. Specifically used in factories and plant rooms this term is used to describe the operations and activities that are required for the upkeep of the facility or plant.

These terms are quite broad and include the physical upkeep, like the buildings or structure, as well as the systems operating within that facility and the equipment used by the facility to produce it’s primary business output.

Facilities

To understand the function of MRO, let’s break down a simple example of a manufacturing plant facility.

The plant needs a wide variety of different operations to function at its optimum level each day.

Things like:
*Production and assembly lines *Incoming shipments of raw materials
*Outgoing shipments of products
*Production line employees using various PPE
*Consumables like oils and lubricants used to keep the machines working
*Computer systems and servers to run the production automated operations and IT functions
*Office and finance departments
*Janitor staff
*HVAC and lighting systems

To support these operations and manage each department an assortment of people from plant managers to engineers need to ensure that the staff have the supplies they need to full perform their jobs.

Direct and Indirect spend

The purchasing of these materials is then classified into two groups :-
*Direct spend ( the purchase of materials and services that are directly affecting the production part of a business)
* Indirect spend ( the purchase of all other expenses not directly affecting production)

An example of direct spend would be raw materials, PPE or boxes to package a final product.

Indirect spend would be items like servicing of HVAC systems, garden maintenance or coffee supplies.

About MRO

MRO is therefore a component of Indirect spend as it is the upkeep of facilities and systems within the business facility.

It’s helpful to note that whilst MRO is a large portion of indirect spend ,not all indirect spend falls under MRO.

Items like legal and accounting services, payroll and marketing are examples of Indirect spend that are not MRO.

Types of MRO

MRO is further broken down into one of 4 types:

* Infratructure repairs & maintenance
* Production equipment repair & maintenance
*Material handling equipment & maintenance
*Tooling and Consumables

MRO Inventory

All of these MRO need to function at their most optimum and require a system to organize and manage them.

To understand how the MRO inventory process works it’s important to remember that MRO Inventory is removed from product inventory and is usually replenished on a regular basis.

MRO inventory management is therefore an essential and an unavoidable part of operations for a business to run at it’s most efficient.

Sadly, most small businesses avoid MRO inventory management until it is too late and they have accounted, unexpected inventory costs.

Materials management software

With the need for an efficient MRO inventory management system it’s important to make use of essential materials management software

Material management systems help to efficiently track,distribute and maintain the assets in real time data that your business needs to help you stay efficient and ahead of your game. Giving you an edge over companies who are not yet using a material management system.

 

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