What Is MRO? Your Complete Guide
Maintenance, repair, and operations (MRO) is a term used to mean a set of activities associated with ensuring facilities and equipment used in an establishment are in top condition. These activities and operations can include the maintenance of structures and systems used in designing and producing the final products.
This post takes a deeper look at MRO activities with a focus on business functions and supply chain management.
MRO Application in Business operations
If you take the example of a manufacturing unit, there are different types of activities used in the production line. The production system relies on raw materials from suppliers and processes them into products for consumption or other industries for further processing. In addition, a manufacturing unit must have workers who run the machinery and use products such as protective equipment. Other components used in a manufacturing entity include cutting, HVAC, and computer systems. The management of the facility also requires tools, such as wrenches and drills during production and maintenance processes.
MRO is part of indirect spending in a business because it is associated with the facility's upkeep. However, it is also important to appreciate there are some indirect spends that fall outside MRO brackets. Some good examples include marketing and bookkeeping and are better categorized as part of administration-related activities.
The Complete Breakdown of MRO
As we have demonstrated, MRO mainly focuses on repairs and maintenance of equipment and facilities in a business facility. Therefore, we can break it down into a number of categories, including the following:
- Repair and Maintenance of Infrastructure
These are activities related to the repair and maintenance of a plant's infrastructure, such as the driveway, roofing, windows, and loading docks. Take the example of the maintenance of your facility’s roofing system. In such a situation, maintenance, repairs, and operations (MRO) might involve replacing, reinforcing, and replacement of the entire or part of the roofing system. Therefore, you might require roofing materials and tools such as trowels and drills.
At this point, one might ask, “What about the responsibility of maintenance and repairs of the infrastructure?” This depends on the status of the facility. If the business is in a rented facility, the responsibility of maintenance and repair of key infrastructure might shift to the owner.
- Equipment Repair and Maintenance
Another major area of MRO activity is the repair and maintenance of the production equipment. Here, the goal of MRO is to keep the production machinery in top condition and operating as efficiently as possible. Note that the machinery of a manufacturing facility might differ, with some using electromechanical and others mechanical models. Common production equipment in industrial facilities includes:
- Textile machinery.
- Electric presses.
When dealing with equipment maintenance, repair, and operations, you can opt for a proactive or a reactive model. Reactive maintenance involves carrying repairs after breakdowns have already happened. This approach can be expensive because the damage will already have happened. However, a proactive approach involves following scheduled maintenance and using sensors to note signs of possible failure before it strikes. Then, maintenance is done promptly to reduce downtime and associated costs.
- Maintenance and Repair of Material Handling Equipment
Most businesses use some sort of material handling equipment. Some common material handling equipment might include bulk containers, forklifts, loading docks, and conveyor systems. Maintaining the equipment in top condition can help to reduce the cost of operations and increase the efficiency of the production system.
To make MRO more effective when dealing with material handling equipment, it is crucial to also factor in workplace safety. For example, do the conveyor systems meet the preset load standards? Are the operators of the equipment operators qualified?
- Tooling and Production Consumables
This is the last category of MRO activity, and it is mainly related to tools that are relatively smaller compared to the main equipment used in your facility. Consumables are the materials that are used during production but are not considered part of the final industrial product. Therefore, they are classified as indirect feed. See some examples in the tooling and production consumables category:
- Cutting bits.
- Consumable components such as glues, adhesives, and soldiering rods.
- Joining tools.
- Janitorial supplies.
It is important to note that the tooling and consumables category of MRO can at times extend to raw materials used in production. Therefore, the definition of whether it actually falls in the activities undertaken in MRO can be a little blurry.
When managing consumables, it is important to work with a reliable supplier who is committed to quality. Furthermore, you should subject them to regular checks because they impact the quality of the final product.
As you can see maintenance repairs and operations (MRO) is a complex subject for many enterprises. However, this complexity also depends on the respective industry and business. An accounting firm with only a few rented offices will need less in terms of MRO costs. However, an industrial facility or construction company will need to spend more on maintenance, repairs, and operations. So, make sure to comprehend MRO well in relation to your business and apply it appropriately for higher efficiency.