MRO – What is it and why do you need inventory management?

MRO (maintenance, repair, and operating material) management is important for any maintenance facility to maintain and reduce inventory management costs. Proper inventory management can save up to 25% of spending for businesses when it’s managed properly. So what exactly is MRO and why is it important? 

These items are parts of operations but are not the actual finished product. They could be repair tools, office supplies, gloves, safety equipment, valves, compressors, cleaning and janitorial supplies, lab equipment, computers, etc. These items can often be overlooked since while they go into the process of making the finished item, they don’t bring revenue on their own. Once a company struggles with this or tests out a good MRO inventory management software, they will see the benefit quickly.

Inventory optimization is important for any company, but large companies can easily lose a lot of money if their inventory is not properly maintained and managed. Money is wasted on unneeded or overpriced materials and resources. It also saves invaluable time when maintenance operators could be doing other important jobs rather than calling around to different vendors trying to price parts because something broke and there wasn’t a replacement in stock. 

But what if these spare items just sat on a shelf unused for years or aren’t inventoried so the company isn’t even aware it’s there or where to find it when the need arises? This is where MRO management comes in to save time and resources.  

In order to keep MRO inventory in check a company needs to:

1. Define critical operations by nailing down which MRO operations are most critical to the company’s success and what absolutely needs to be in stock. They need to speculate how often these items are used and need to be replaced without going overboard and wasting money and storage space.
2. Maximize efficiency. The more efficient the company, the more profitable it is. Cutting down on processes that aren’t cost-productive and are archaic can also speed up operations and improve profit after initial upgrade investments are made. 
3. Account for slow times. Many companies have certain times of the year where operations are busier and, therefore, MRO inventory should be stocked at a higher pace than slower seasons. 
4. Make wise financial decisions. MRO software often helps companies nail down good vendor prices and quality items to improve production at a fraction of the cost. Rather than calling around and pricing vendors or making sure the items are indeed of good quality, keep track so future purchases can be made quickly and smoothly to save time over the long run.

Most companies end up utilizing software or AI to improve the accuracy of ordering supplies and maintaining stock. AI is actually emerging as Industry 4.0 technology to address supplies and materials, keep track of inventory, and make sure production is running as smoothly as possible. This takes a burden off of building maintenance technicians, allowing them to utilize their invaluable skills elsewhere, actually implementing, changing, and fixing the inventory. This also saves the company billions over time, making it a win-win with a low investment.