Reaping the benefits of MRO in manufacturing

0.5% to 5% of the revenues go towards MRO. Production efficiency is achieved when MRO processes within the organization are properly managed. The benefits of MRO efficiency include effective procurement of spare parts and services, low costs of holding inventory, high-quality production, low costs of the overall business operations, and high productivity of workers and equipment.

Let us look at the MRO meaning first. It stands for maintenance, repair, and operation and includes the set of activities that are performed with the intention of upkeeping a facility. The components it covers include production units, equipment, tools, resources, machinery, production systems, plants, structures, and buildings, etc. Hence, anything that is primarily or secondarily involved in or supports the manufacturing purpose can come under MRO.

Here are some important considerations for companies to ensure their production efficiency is at an optimum with the help of efficient MRO management:

A crucial question that manufacturing companies should ask themselves is that if they really understand the patterns of demand for their spare parts. There are components that are needed in a recurring manner for maintenance processes. It is important to automate the process of procurement of those parts as their demand is predictable. Spending money, time, and energy all over again for each time the demand arises hinders the overall efficiency of the business.

Another vital thing that manufacturing companies should check is their relationships with proprietary sourcing companies and services. It is common for companies to continue working with vendors who have been partners with the company for a long time. However, they may (or may not) have been the perfect choice when the relationship was built, but there are high chances that there are other more capable and more cost-efficient firms out there now who can serve as a better alternative.

Similarly, the requirement and demand of your spare parts should determine your capital equipment costs. Factors like brands, numbers, and frequency should be taken into consideration, and active efforts for cost reduction should be made.

Benefits of MRO cannot be optimally obtained until manufacturing units carry out a detailed assessment of options for their long-tail purchases from aggregators. A company should know how the use of aggregators affects it in terms of costs, quality, and consistency.

Usually, companies only take into consideration the cost factors when they source from LCC suppliers. However, the complexity of the supply chain and the quality of products are factors that can supersede the cost benefits in the long run. Just like the service vendors, the selection process for LCC suppliers should also be rigorous and careful. The complete value chain of each of the potential suppliers should be applied with the company’s QC and QA processes to ensure maximum support to production efficiency.

The locations, quantities, and selection of the inventory objects are highly important for production efficiency. The products and parts that are not as critical to production as others and are slow-moving as well should not take up much space in the inventory. Manufacturing companies should analyze and evaluate the model and infrastructure of their warehouse and figure out their consumption patterns and constraints. This enables them to plan and manage their inventory in a way that adheres to these factors.

For most manufacturing companies, the above-mentioned considerations will offer them significant improvement opportunities in productivity, as well as cost-efficiency through a careful approach to MRO management. The benefits of MRO do not come by just performing MRO; they are obtained by performing efficient MRO.

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