Maintenance, Repair, and Operating Supplies (MRO)
MRO Items Are Consumed in Production and Plant Maintenance
MRO (maintenance, repair and operating supply) items are used in production and plant maintenance and can be items such as maintenance supplies, spare parts, and consumables used in the production process.
These items can be either valuated or non-valuated and depending on the value of the items, no physical inventory is performed.
MRO items include
- Safety equipment
- And cleaning products
In the supply chain, you might think that you're too busy to concern yourself with maintenance, repair and operating supplies (or maintenance, repair and operations or maintenance, repair and overhaul - depending on what you want your MRO to stand for), but you'd be very wrong.
Optimizing supply chain means that you're doing all you can to supply your customers what they want, when they want it - and spend as little money as possible making that happen. Without paying careful attention to all facets or your operations - including MRO - you may not accomplish that optimization.
Some organizations put MRO oversight, control or buying within an administrative role. Since MRO items aren't typically managed by your enterprise resource planning tool (ERP), materials resource planning system (MRP) or warehouse management system (WMS), admin employees (like receptionists or admin assistants) are often tasked with placing orders with MRO suppliers on an as-needed basis.
But by placing MRO responsibility within your supply chain team, you can take as step toward ensuring your company's operations remain optimized. A supply chain buyer offers several advantages over an admin buyer.
Supply Chain Oversight of MRO
First, a supply chain buyer will approach MRO buying with an eye toward safety stock, usage, inventory management and lead times.
Supply chain professionals can design and implement a proactive approach to MRO management. Since MRO items are typically not part of your company's official or financial inventory, there may not be a real-time record of how many spare parts, maintenance supplies or consumables you have on hand.
A supply chain pro can rectify that for you.
- Do you know what your lead times are when you need to resupply your MRO items?
- Do you know what your company's usage or depletion rate of MRO items is?
- Do you know how close you are to running out of your MRO items?
- Do you even know how many MRO items you have and what they are?
If not, put MRO under the control of your supply chain team.
Strategic Sourcing and MRO
A supply chain pro can also approach MRO supply management with a strategic sourcing approach. When was the last time you put your MRO spend out for sourcing review? While some of your inventory items might be hard to re-source (for regulatory, source-control, specification or engineering reasons), your MRO supplier might be able to be sourced from other suppliers more readily.
If you haven't negotiated MRO costs within the last year or so - or tried to find other MRO suppliers to drive savings - put MRO under the control of your supply chain team.
Would saving 3% or 5% or 10% on your MRO spend have an impact to your company's bottom line? Exactly.
Peace of Mind
And finally, having your supply chain team manage your MRO gives you the peace of mind that your operations is going to hum along.
If you're exerting a lot of energy - making sure you're supplying your customers what they want, when they want it and spending as little money as possible getting that done - and then you find out your production line has ground to a halt because a piece of tissue paper you use on your production line (that seems so inconsequential but is actually critical to moving parts through your manufacturing process) is out of stock.
You don't want to be the person who has to explain to your customer that you're delivering late because you ran out of an MRO item (trust me).
Put MRO under the control of your supply chain team and optimize your MRO buying by reducing costs and consolidating MRO suppliers.
Updated by Gary Marion, Logistics and Supply Chain Expert at The Balance.