Manufacturing is a delicate business. Your production relies on the correct function of your facilities and equipment, as failure in any of its parts can lead to unscheduled downtime, delays, and loss of profit. And yet the maintenance sector continues to be grossly underestimated and undervalued by many.
Today, we seek to fix that. This article focuses on defining MRO, explaining its importance, and outlining how you can use it to improve your company’s productivity and efficiency.
What is MRO?
MRO stands for Maintenance, Repairs, and Operations (or sometimes Maintenance, Repair, and Overhaul). It can be best described as the combination of processes and activities associated with a manufacturing facility’s upkeep, including its production lines and equipment, utilities, related operations, as well as the building itself.
So, to get a better idea of how important MRO is for your company, let’s look at a few examples of processes and activities it oversees. MRO is in charge of:
- Upkeep of the facility and associated premises, including roof and wall repairs, shoveling snow, groundwork, etc.
- Maintenance of utilities, including electricity, lighting, plumbing, and heating
- Running and maintaining production lines
- Site and employee health and safety
- Stocking activities, including planning, ordering, manipulating, and storage
- Janitorial work
Preventative Maintenance Checklist
Download a free Preventive Maintenance template to inspect the state of the equipment or machinery
MRO & Company Spending
You can also think of MRO in terms of your company expenses. Typically, we divide company spending into 2 parts – direct and indirect. The two can be defined as follows:
- Direct Spending – It is the combined cost of all materials and services directly responsible for creating the final product. For example, wood and nails in carpentry; metal, plastic, electronics in the automotive industry, etc.
- Indirect Spending – The opposite of direct spending, it consists of all the expenses associated with but not directly involved in production. This can include IT services, marketing, office supplies, logistics, and many other examples. As you might have guessed, MRO is a significant contributor to a company’s indirect spending.
Why is MRO Important?
We’ve gone over all the things MRO relates to within your business, but we’ve not discussed what it means for your company. Why should you care about MRO? There are a few reasons why. Even though MRO is the sort of thing that no one likes until something goes wrong, it has tremendous connotations for your facility’s activities.
MRO benefits include:
- Fewer hours of unscheduled downtime
- Higher manufacturing line productivity
- Increased employee efficiency
- Better stock organization
- Improved site health and safety
- Less resource waste
- Higher revenue
Now, those may seem like rather hefty promises. Nevertheless, the truth is that a well-optimized MRO strategy can really help you achieve all of that and perhaps even a little bit more. We’ll discuss how that’s possible in just a little while. But to truly understand it, we first need to take a closer look at the 4 types of MRO – what they are, what they focus on, and how they work.
The 4 Types of MRO
As we explained above, the term MRO encompasses many different activities and processes. Hence, it can be hard to wrap your head around it all. Thankfully, the people who create and are in charge of MRO tend to be practically-minded people, and so we have the following 4-type division to help us make sense of it all.
The 4 types of MRO are:
- Infrastructure Repair and Maintenance
- Production Equipment Repair and Maintenance
- Material Handling Equipment Maintenance
- Tooling and Consumables
This section will look at each of them more in-depth and discuss why they are important for your plant’s (and company’s) sustained function.
1. Infrastructure Repair and Maintenance
This type of MRO focuses entirely on the integrity of the facility and its surrounding premises. It deals with maintenance and repairs of roofs, walls, doors, and windows, but activities like landscaping, snow removal, and pest control also fall under this category.
These responsibilities are typically assigned to internal employees. However, depending on their background and qualifications, not all workforces can deal with everything. Thanks to that, this area of MRO is also home to a large market of 3rd party vendors who can take care of everything you can’t do yourself.
Infrastructure repair and maintenance is important because it is essential for your facility’s continued operationfacility’s continued operation. A fault in any of the items of interest described above can lead to bodily harm or death on the employees’ part and innumerable damages to products, equipment, and raw materials.
2. Production Equipment Repair and Maintenance
Turning our focus from the outside to the inside, this type of MRO deals with all the assets and equipment directly involved in the manufacturing process. Its purpose is primarily to prevent any unnecessary unscheduled downtime and keep material waste to a minimum.
To achieve this goal, companies typically use a combination of preventive maintenance, on-demand work orders, and sometimes predictive maintenance. Due to the amount of work necessary to keep operations up and running, most businesses employ entire maintenance departments.
The importance of production equipment repair and maintenance should be clear at first glance. If the machines stop, so does your production. Unscheduled downtime then leads to delays, unfulfilled orders, and loss of profits.
3. Material Handling Equipment Maintenance
Unlike the previous two types, this MRO concerns itself with everything except for the production time. More specifically, it deals with ensuring that the import of resources and export of finished products goes smoothly without a hitch.
Companies tend to outsource this type of work. However, that doesn’t mean it’s not vital. If your plant doesn’t receive the shipment of materials it needs for production, you won’t make anything. And similarly, if something goes wrong while you’re shipping the final products to the customers, you won’t get paid.
4. Tooling and Consumables
The subjects of the fourth and final type of MRO are tools and consumables not directly used in production. These include work tools (ex., wrenches, hammers, drills, nails, etc.) and work safety equipment (ex., gloves, masks, protective eyewear, helmets, earplugs, etc.). Together, these items are also known as “MRO inventory”.
They are vital because they allow your employees to work to their fullest potential. In turn, keeping a good stock of MRO inventory can lead to improved work efficiency, higher productivity, and more.
How to Improve MRO Efficiency
Having discussed the four types of MRO and what they do for your business, you can now be sure that it’s in your best interest to keep them working as efficiently as possible. The question is, how can you do that? Luckily, there are several options open to you.
Here’s what you should consider:
- Reconsider your MRO procurement
- Improve your MRO workflows
Reconsider your MRO procurement
As we’ve seen in the previous sections, MRO is all about having the right resources at the right time. But to do that, you need to be able to stock your warehouses efficiently. And the MRO inventory providers you choose are key to achieving that.
Take into account the provider who you’ve been working with so far. Do they have everything you need? Are they able to reliably deliver it on time, every time? If not, you may want to consider finding a new one that can fulfill your requirements better, ideally at a lower price.
Vendor-managed inventory (VMI) is also something that may be worth your time if you’re having trouble supplying your employees with the necessary equipment. In essence, VMI is all about outsourcing your inventory management to a 3rd party.
The benefit of that is that you no longer have to worry about planning and ordering stock. Instead, you can spend your time on activities more worth your time. Plus, a VMI may also be able to save some of your money by buying in bulk.
Preventative Maintenance Checklist
Download a free Preventive Maintenance template to inspect the state of the equipment or machinery
Improve your MRO workflows
Oftentimes, MRO suffers from delays, ineffective communication, and difficulties with submitting work orders. But it doesn’t have to be that way. Many companies just come to accept their sub-par MRO workflow as a fact of life while failing to realize they are directly responsible.
If you want to improve your MRO workflow efficiency, you should first revisit the ones you have currently in place. Ask yourself, how are your preventive and predictive maintenance plans? Are they completed regularly as they should, or does your maintenance team avoid doing them? Address any such issues as soon as you find them, and you’ll see the difference immediately.
Also, reevaluate your approach to submitting work orders. Paper slips and spreadsheets were fine 20 years ago, but we have better options nowadays.
Try to eliminate as many roadblocks as you can to make it as easy as possible for employees to submit work orders to your maintenance team.
In conclusion, MRO is a serious and often undervalued aspect of running an efficient manufacturing business. Give it the credit it deserves and invest some of your time in creating a better MRO because it’ll certainly pay off. And one of the best ways of doing that is with digital tools like Resco’s Asset Maintenance Software, which allows you to streamline work orders, receive and track data in real-time, and breeze through audits like they were nothing.