Imagine you’re running an assembly line manufacturing toasters. Every step goes smoothly — until the workers at the final step tell you someone spilled polishing fluid all over the conveyor belt.
It should be an easy cleanup, but you’ve checked every closet and cupboard and there are no rags, mops, or paper towels to be found. Eventually, someone has to go to the store to grab some. One small spill has turned into an hour of chasing down supplies.
In manufacturing, inventory is about more than production materials. It includes maintenance, repair, and operations (MRO) supplies — the items you need to avoid the situation above and keep production running.
Here’s a guide to MRO in manufacturing and how it transforms your bottom line.
What is MRO in manufacturing?
MRO encompasses all the activities, resources, and materials necessary to run a manufacturing facility. It’s the backbone of efficient operations, ensuring equipment functions optimally to minimize downtime and save money.
A crucial part of MRO is inventory management — the procurement, storage, and use of MRO items, including everything from nuts and bolts to lubricants and cleaning supplies. Strong inventory management means parts are readily available when needed, keeping your facility operating like a well-oiled machine.
4 types of MRO
MRO is an umbrella covering several operational strategies and activities. Let’s break down the key types of MRO and discover how each contributes to your operation’s overall success.
1. Infrastructure repair and maintenance
MRO infrastructure repair and maintenance includes activities concerning the facility’s physical structure, such as the building itself, plumbing, and heating, ventilation, and air conditioning (HVAC).
A well-maintained infrastructure contributes to a safe and productive working environment. Neglecting it can cause safety hazards and disruptions to production. A leaky roof can damage equipment, and faulty wiring poses a fire risk.
2. Material handling equipment maintenance
Forklifts, conveyors, and other material handling tools are a facility’s workhorses. Maintaining this equipment prevents breakdowns, optimizes workflows, and ensures the safe and timely delivery of materials. A malfunctioning conveyor belt, for example, creates bottlenecks and delays, harming productivity.
3. Tooling and consumables
While they might seem mundane, tooling and consumables are the unsung heroes of MRO. These are the everyday items that keep operations running smoothly. Wrenches, lubricants, and cleaning supplies are just a few of the tools and materials in this category.
Stocking MRO inventory means your maintenance team always has the necessary resources to address issues. Imagine a scenario where a critical machine breaks down. With MRO, you can find spare parts quickly and save the day.
4. Production equipment repair and maintenance
Production equipment is the engine that drives your manufacturing output. Regular inspections, preventive maintenance, and timely repairs keep this engine running smoothly. Neglecting production equipment care leads to costly breakdowns and even product defects.
The cornerstones of MRO inventory management
Let’s break down the three essential components of a successful MRO strategy.
1. Locating MRO items
In manufacturing, time is of the essence. When a machine breaks down or a critical part needs replacement, don’t waste precious minutes searching for the right items. An easily searchable system helps you find them quickly. This could involve anything from a simple spreadsheet to sophisticated inventory management software like Fishbowl. The key is having a system that quickly and accurately locates the MRO items you need.
2. Organizing inventory
A cluttered stockroom is a recipe for inefficiency and frustration. With an established inventory system, every item has a designated, accessible place. This saves time and reduces the risk of misplacing or losing critical MRO items. Clear labeling systems, storage bins and racks, and a logical stockroom layout are essential.
3. Establishing an MRO procurement process
Having the right items in stock is only half the battle. You also need a reliable and efficient process for procuring MRO inventory. Identify trusted suppliers and negotiate favorable terms to set default suppliers, quickly generate purchase orders, and receive the goods you need faster. Assigning reorder points to avoid stockouts is also a good idea.
A streamlined procurement process ensures you have MRO items on hand when needed, preventing costly stockouts and production delays. It also helps you maintain optimal inventory levels, avoiding the costs associated with overstocking.
4 benefits of MRO
Investing in a well-structured MRO program gives you a competitive edge. Here’s how effective inventory management can transform your operations:
1. Minimized downtime and maximized productivity
With readily available MRO materials, you can swiftly address equipment malfunctions and part failures. This reduces downtime, prevents bottlenecks, and maximizes manufacturing output.
2. Cost reduction and improved profitability
Optimizing MRO inventory, implementing proactive maintenance strategies, and establishing strategic supplier relationships reduce costs and maximize overall efficiency. Experience lower waste and higher profitability.
3. Enhanced workplace safety
Prioritizing MRO means prioritizing a safe workplace environment. Regular inspections and repairs coupled with readily available personal protective equipment (PPE) minimize accidents and injuries. This reduces legal liabilities and production disruptions.
4. Extended equipment lifespan and increased ROI
Proactive maintenance — like inspections and cleaning — significantly extends the lifespan of your industrial MRO equipment. Well-maintained tools operate more efficiently, experience fewer breakdowns, and ultimately lower your total cost of ownership (TCO).
Optimizing MRO strategy: 7 best practices
Here are seven best practices for mastering MRO inventory management:
1. Conduct regular audits
Regular audits give you a comprehensive understanding of what you have on hand. By identifying slow-moving items, excess stock, and shortages, you can optimize the ordering process and make sure there are enough materials when needed.
2. Set reorder points
Avoid running out of vital MRO items by setting reorder points for each one. This establishes a minimum stock level that triggers an automatic order, meaning you’ll never scramble for supplies.
3. Use inventory management software
While spreadsheets are helpful for basic tracking, investing in dedicated inventory management software like Fishbowl is a game-changer. These systems offer real-time visibility into stock levels, automate reordering, and provide valuable insights into MRO usage patterns. This leads to more data-driven decisions and streamlines operations.
4. Track key performance indicators (KPIs)
What gets measured gets managed. By tracking KPIs like turnover, stockout rates, and carrying costs, you can gain valuable insights into your MRO strategy’s effectiveness. These metrics help you identify areas for improvement, measure progress over time, and make informed decisions.
5. Train your staff
Employees are your most valuable assets. Train maintenance and operations personnel in proper inventory management procedures. This includes everything from using the system to identifying and reporting issues.
6. Partner with reliable suppliers
Suppliers play a crucial role in MRO success. Choose reliable vendors who consistently deliver high-quality MRO materials on time and at competitive prices. Building strong relationships with suppliers leads to better service, faster delivery times, and even potential discounts.
7. Implement preventive maintenance
By implementing a preventive maintenance program, you identify and address issues before they become major problems. This extends equipment lifespans and reduces the need for reactive repairs, saving time and money in the long run.
Unlock your facility’s potential with Fishbowl
Don’t let inefficient MRO hold your manufacturing operations back. Discover how Fishbowl’s integrated inventory and manufacturing solutions revolutionize the way you manage stock.
Fishbowl streamlines and automates inventory tracking, reordering, and reporting, allowing your team to focus on higher-value tasks. Plus, seamless integration with QuickBooks provides complete visibility and control over your data and accounting.
Book a demo today and take MRO inventory tracking to the next level.