What Is MRO? An Introduction to Maintenance Repairs and Operations

May 4, 2022

What Is MRO (and What Does It Stand For)?

MRO—Maintenance, Repair, and Operations—is a frequently used acronym within the maintenance sector. 

Maintenance professionals also sometimes refer to Maintenance, Repair, and Overhaul when using the term MRO. Organizations use the term to describe the various supplies used during operational processes that do not become part of product deliverables. 

Examples of MRO items include:

  • Industrial Equipment (e.g., pumps, motors, belts)
  • Consumables (e.g., cleaning supplies, office supplies). 
  • Maintenance Supplies (e.g., lubricants, gaskets, repair tools)

MRO can include hundreds of subcategories involving supply-chain materials. 

Summary

A 2019 Plant Engineering study reported that MRO departments receive, on average, only a small fraction of organizational operating budgets. Regarding scheduled maintenance, the study reports: “The average facility allocates approximately 9.2% of its annual operating budget to maintenance processes. One-third of facilities spend 30 hours or more each week on scheduled maintenance; average is 20 hours/week.”

But don’t let that small slice of pie fool you—MRO’s impact on overall performance is massive. 

Organizations rely on several types of assets to run smoothly, including facility structures, machinery, furniture, and technology systems. Many of these items require continuous maintenance efforts involving various supplies to remain in working condition. 

The primary objective of MRO is to ensure business departments always have the materials they need to be effective. Keeping crucial supplies on hand accomplishes several organizational goals, including reducing downtime, increasing safety, extending useful equipment life, minimizing overstocks, and protecting customer deliveries.

Modern Materials Handling Magazine reported that “For 94% of respondents, MRO is either extremely or somewhat important to their companies’ overall operations. Only 6% indicated that MRO was not very important or not at all important. Those who see MRO as ‘extremely’ important say it helps their firms maintain customer satisfaction, maintain continuous production, follow lean practices, and secure the ‘right parts for the first time, every time.’ Respondents that view MRO as ‘somewhat important,’ say it helps to reduce downtime, manage preventative maintenance and streamline their plants.” 

To sum it up, the MRO survey indicated that MRO is crucial to overall operations. 

What Role Does MRO Play in Supply Chain Management? 

MRO expenses usually run “5 to 10 percent of the cost of goods sold (COGS),” as reported by Supply Chain Game Changer. 

This is why many organizational leaders treat MRO as an afterthought. However, priorities soon change when a vital material’s absence stops production processes due to inoperable equipment. 

The smallest missing supply—whether a missing tool, part, or chemical component—can derail assembly lines for hours. Depending on the industry, one hour of downtime can translate into hundreds of thousands of dollars in missed profits. 

Late customer deliveries, employee idle time, and missed targets all translate to money lost unnecessarily. Not only does poor MRO management negatively impact supply chains, but it can also lead to safety hazards. In some instances, running out of a critical safety component can pose a threat to employee well-being. 

What Are MRO Materials? 

Organizational purchases fall into two categories: direct and indirect spending.

Direct spending refers to materials that go into the making of end products. 

Indirect spending refers to items not directly used in production. 

Thus, MRO items fall into a subcategory of the latter. 

As mentioned above, maintenance professionals use MRO items to maintain company structures, equipment, and assets. Purchases that fall under MRO include maintenance tools/equipment, replacement parts for production equipment, personal protective equipment (e.g., safety goggles, work gloves), and office supplies. 

What Are the Types of MRO?

As outlined by Thomasnet.com, industry experts typically divide MRO into four categories:

1. Production Equipment Maintenance and Repair

This category of MRO focuses on the maintenance of critical assets and systems so that production isn’t disrupted. Over time, frequently used machines experience wear and tear that necessitate more frequent upkeep over time. 

MRO activities related to production equipment include routine and emergency maintenance, purchase of condition-monitoring equipment, replacement parts inventory management, and supplier management. Switching to proactive maintenance strategies such as predictive and preventive maintenance help production facilities stay on top of maintenance and improve asset uptime, availability, and reliability.

2. Material Handling Equipment Maintenance and Repair

Material handling equipment includes different types of machinery such as forklifts, storage systems, bulk containers, conveyor systems, robotic arms, and pallet positioners. 

These items are essential for moving raw materials and components through production lines.  They also help transport finished products to loading bays, where workers can ship them to customers. It’s crucial to ensure that material handling equipment remains operable to avoid idle time

3. Infrastructure Maintenance and Repairs

Though not as immediately pressing, management must prioritize the upkeep of facility infrastructure. This type of maintenance includes cleaning services, lighting and HVAC systems servicing, pest control, grounds maintenance, and building maintenance. 

4. Tools and Consumables

Finally, MRO includes hand tools and limited-use items needed to execute maintenance and repairs. Examples of MRO tools and consumables include power tools such as electric saws, hand tools such as pliers, PPEs, lubrication liquids, adhesives, welding rods, sandpaper, and office supplies. These items are usually small and can easily get lost in a large facility. They, therefore, need proper management too.

What Do MRO Professionals Do? 

Different types of organizations have different MRO needs. Small businesses with relatively low MRO expenses—restaurants, resorts, private practices—typically entrust a general manager to oversee all aspects of MRO. 

Alternatively, large organizations—warehouses, manufacturers, oil and gas companies—often divide responsibilities amongst a team of professionals to ensure operations run smoothly. Essential roles within high-volume MRO facilities include:

Procurement Officers 

MRO departments often require dedicated procurement personnel who have experience working with organizational items. They are responsible for assessing the suitability of suppliers, products, and services and negotiating contracts with suppliers. Additionally, they ensure businesses purchase high-quality and cost-efficient MRO products.

Supplier Relationship Managers

Large organizations often require a specific manager to be responsible for maintaining relationships with suppliers. Considering that businesses need raw materials to produce deliverables for customers, maintaining reliable supply chains is paramount to success. 

Though some suppliers are undoubtedly more important than others, most businesses source supplies from various sources. Supplier relationship managers identify “mission-critical” MRO items and secure iron-clad purchase order arrangements to ensure their organizations always have the materials they need to stay in business. 

Inventory Managers

Inventory managers are responsible for adequately stocking MRO items at all times. A large part of their responsibilities is overseeing the quantity levels of spare parts necessary for performing both preventive maintenance and corrective maintenance, as needed. 

MRO inventory management is crucial to reducing unnecessary downtimes, delayed deliveries, and expedited shipping costs associated with emergency inventory orders. 

Standards/Compliance Officer

Without proper controls, there’s always a risk of purchasing defective MRO items. In addition, companies must remain vigilant against procuring items from unauthorized suppliers who can’t guarantee quality control.  

This is where a compliance officer steps in. This person can ensure that all MRO items are secured following compliance regulations, and no illegal items are purchased. 

Streamline Maintenance Repairs and Operations with CMMS

MRO management can be a daunting task. O&M managers must consider several factors to manage material and supply levels efficiently. 

This includes accounting for each asset within individual facilities, tracking inventory levels, and overseeing scheduled maintenance. However, with a proper MRO management system in place, your maintenance team will always have the right parts and tools at the right time.

The best way to streamline MRO management is with a computerized maintenance management system (CMMS) like MaintainX. The software enables department leaders to oversee assigned work orders in real-time, monitor MRO inventory levels, export data for suppliers, and generate cost reports. MaintainX CMMS is compatible with desktops, tablets, and mobile devices. 

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