MRO (maintenance, repair, and operating supply) items are supplies utilized in the production process, that is not ultimately seen in the end products themselves. MRO items may include:
- Safety equipment
- Industrial equipment (valves, compressors, pumps)
- Consumables (cleaning, laboratory, and office supplies)
- Plant upkeep supplies (lubricants, gaskets, repair tools)
Many people don't fully appreciate the vital role MRO items play in keeping supply chains running smoothly. But failure to routinely maintain, repair, and overhaul systems, can cripple a business. Contrarily, businesses that diligently maintain MRO inventory and optimize supply chains, can better supply products to customers in a timely and economical manner.
Because MRO purchases are seldom managed by a company's enterprise resource planning tools, materials resource planning systems, or warehouse management systems, the task often falls on the shoulders of receptionists or other administrative personnel, who place orders with MRO suppliers on an as-needed basis. It is no small feat, given that MRO inventories and expenses are typically excluded from a company's regular reports, giving companies incomplete pictures of the MRO items currently at hand. But a dedicated supply chain professional can remedy this, by tracking the following:
- Full lists of required MRO items generally used
- Lead times needed to resupply MRO items
- MRO item usage and depletion rates
A supply chain professional can strategically manage MRO supplies by learning where to source materials economically. It may require cultivating multiple relationships, depending on the nature of the MRO supplies--be they for regulatory, engineering, safety, or other purposes. Certain suppliers focus in some areas, but not others.
MRO costs should be negotiated annually, to keep costs down. Consolidating MRO suppliers, when possible, also makes good fiscal sense, as shaving even just a few percentage points from an MRO budget can radically improve a company's bottom line. On the other hand, failure to properly inventory a supply chain with necessary MRO items can result in production shut-downs and slow-downs, diminished product availability, and ultimately customer attrition.
Updated by Gary Marion