Maintenance, repair, and overhaul (MRO) refers to all actions taken to ensure that machinery, tools, and facilities are in good working order.
The right maintenance, repair, and overhaul strategy can transform a plant’s operations by increasing operational efficiency and reducing unplanned downtime. This article will examine the maintenance, repair, and overhaul definition and how this approach works in practice. We’ll also discuss the benefits of a good MRO strategy.
What Is Maintenance, Repair, and Overhaul?
Maintenance, repair, and overhaul (MRO) is a strategy for managing critical assets to maximize their lifespans and productivity. MRO is an umbrella term that can involve everything from routine preventive maintenance tasks to emergency repairs. It also includes upgrading and modernizing assets, or bringing them up to code.
An effective maintenance and repair strategy includes asset management and spare parts inventory management. Today, most successful MRO maintenance approaches also incorporate digital tools like wireless condition monitoring sensors and computerized maintenance management system (CMMS) software. Most modern industrial operations rely on high-value equipment and tools to produce their goods. Leveraging digital tools is the most effective way to keep critical assets up and running so that businesses can stay competitive.
Maintenance, Repair, and Overhaul vs. Maintenance, Repair, and Operations
The terms maintenance, repair, and overhaul and maintenance, repair, and operations are often used to mean the same thing. Both terms have the same acronym: MRO. So what’s the difference?
Maintenance, repair, and operations focus primarily on facility management. The term encompasses the plant’s big-picture operations as a whole, rather than individual maintenance approaches and tasks.
Maintenance, repair, and overhaul industry tasks focus on equipment, tools, and spare parts. The term “overhaul” refers to all of the major maintenance activities that involve refurbishing your physical assets.
Key Components of MRO
Here’s how the three key components of MRO — maintenance, repair, and overhaul — work together.
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Maintenance Strategies
The types of maintenance, repair, and overhaul strategies include:
They can be used in tandem with one another to support a robust maintenance strategy. But in order to carry out any kind of MRO program, you have to have the right tools.
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MRO Items: Supplies, Tools, and Equipment
Examples of MRO supplies include industrial assets such as pumps, motors, valves, compressors, and blowers. All of the component parts of these assets are also MRO supplies. Other types of MRO supplies include:
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- Maintenance tools, from hammers and saws to wireless vibration sensors.
- Safety equipment, like gas and carbon monoxide detectors and fire extinguishers.
- Personal protective equipment, like hardhats, safety goggles, and work gloves.
- Consumables, like lubricants and cleaning solutions.
Broadly speaking, all of the tools and equipment used to carry out MRO activities count as items used for maintenance, repair, and overhaul.
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Overhaul MRO Tasks and Activities
Any tasks and activities that service, repair, or refurbish your equipment can be classified as MRO tasks. MRO tasks and activities will look a little different at each plant, as they depend on your equipment needs, as well as your budget and goals.
Most facilities use more than one MRO strategy. A maintenance team might use condition monitoring sensors to track the health of its most critical assets, for example. The same maintenance team probably uses a reactive maintenance approach for non-critical assets (like lightbulbs). And most plants today use preventive maintenance to ensure regular asset inspections and maintenance.
Importance of Effective MRO
Your whole organization will reap the benefits of a strong MRO management strategy. Done right, a solid MRO approach leads to a reduction in downtime, lower maintenance costs, and a longer useful lifespan for your critical assets.
More specifically, an MRO management strategy can:
- Improve work order completion rates
- Increase efficiency by tracking labor hours and costs
- Improve scheduling, ensuring that you make the best use of planned downtime
- Standardize workflows so that teams perform maintenance tasks correctly every time
- Track asset health and maintenance history, so that your teams can plan for each asset’s maintenance needs
- Manage MRO inventory and ensure you can always find the parts you need
Differentiating Between Maintenance and Repair Activities
While maintenance and repair fall under the same MRO umbrella, they have some important distinctions.
Maintenance focuses on keeping critical assets in good working order by ensuring their parts function properly. This includes routine inspections, lubrication, and filter changes, or predictive strategies like using vibration sensors to keep an eye on functionality. Although maintenance is an upfront investment, preventive strategies lower costs over the long term and improve efficiency by preventing unexpected downtime.
In contrast, repair activities respond to problems as they arise. For example, a technician might replace a broken gear when a machine begins to fail or stops working altogether. Repairs often constitute emergency work done quickly to ensure minimal disruption to output.
Simply put, maintenance is proactive while repair is reactive.
In practice, there is an overlap between maintenance and repair. But in many cases, good maintenance routines reduce the need for repair services. A good MRO strategy balances both maintenance & repair to manage critical and non-critical assets.
What Is the Role of an MRO Technician?
The job of an MRO technician is to assess maintenance or repair work, conduct MRO tasks and oversee their completion, and fill out appropriate paperwork. This might include overseeing an MRO schedule and ensuring that all maintenance tasks meet internal and external standards and regulations.
An MRO technician works to ensure documentation is complete, accurate, and approved by the relevant stakeholders. It’s the technician’s job to complete a visual inspection once work is complete, and to update any appropriate records, such as an activity log.
Key Responsibilities of an MRO Technician:
Inspection – Looking at equipment to diagnose the root of problems and decide on necessary maintenance or repair work.
Overhaul – Disassembling components and replacing, repairing, or rebuilding systems.
Testing – Checking that repairs or replacements perform to required quality standards.
Documentation – Keeping meticulous records for future maintenance teams and regulatory compliance.
Safety – Making sure to adhere to all regulations and safety procedures.
MRO technicians are essential to any workplace that regularly uses equipment for manufacturing and assembly.
Common Challenges in MRO
Effectively implementing MRO comes with an array of challenges. The most common issues include insufficient budget, a lack of skilled labor, ineffective data collection and analysis, and misalignment between short-term and long-term goals.
Most organizations don’t employ just one maintenance strategy. It may take some trial and error to arrive at the right budget allocation for your MRO operations compared to existing maintenance practices.
Experienced, skilled maintenance technicians are another key component of MRO. This approach requires continuous education, not only for new employees, but also for ongoing updates to processes and policies. It’s essential to have a knowledgeable, adaptable team.
Without proper tools to collect and analyze data, you’ll have a difficult time with MRO. Invest in the right tools, including a robust CMMS solution, to maximize your success.
Finally, when implementing MRO, you’ll have to balance short-term goals with long-term goals. Prioritizing long-term goals can result in slower short-term gains, while an overemphasis on short-term goals may prevent the creation of effective long-term processes and strategies.
You can address each of these challenges by focusing on preventive maintenance strategies, effective training programs, advanced data analysis tools and procedures, and regular review of short-term actions in relation to long-term goals.
Cost Implications of Maintenance vs. Repair
It’s impossible to know if you’re going to spend more or less money on preventive maintenance or emergency repair. However, preventive maintenance is often more cost-effective in the long term.
Emergency repairs are typically more expensive and can lead to unplanned (and potentially costly) downtime that will have a bigger impact on margins overall, not to mention safety issues.
Here the breakdown for each approach:
Cost of Preventive Maintenance
- Higher up-front costs
- Lower long-term costs
- Predictable costs
- Longer asset lifespan
Although investing in regular maintenance checks and predictive systems will be an investment upfront, they can significantly reduce the need for reactive repairs, leading to lower costs over the long term. Maintenance teams can also budget for preventive costs annually, since they are predictable.
Another benefit is that you can schedule maintenance in order to minimize disruption and unexpected (potentially costly) downtime.
Investing in maintenance increases the operational lifespan of assets, delaying the need for expensive replacements. Think of it like regular oil changes and services for your car, which ensure it runs smoothly without having to pay costly bills for breakdowns.
Cost of Repair
- Potentially cheaper upfront
- Costly emergency rates
- Unpredictable costs
- Shorter asset lifespan
While you may save money by skipping maintenance tasks in the short-term, the cost of unplanned repairs can make your total MRO bill a lot higher. Minor fixes, like changing a broken lightbulb, won’t be too costly. But emergency repairs on a critical asset with many complex parts can add up fast.
Emergency or out-of-hours labor rates are expensive, and obtaining replacement parts often causes delays and the potential for longer downtime. It can be difficult to budget for repair work, too. Costs vary widely, and the scarcity of materials or labor can compound the risk of an unexpectedly high repair bill. Disruption caused by breakdowns or unplanned repairs often impact productivity and your bottom line.
Ultimately, if you run complex assets to the point where they need costly repairs, they will often break down faster and require a replacement sooner. Just like with passenger vehicles, there’s a point where it becomes a better investment to buy a new one than to keep spending money fixing breakdowns.
MRO Inventory Management
Whether stocking critical medical equipment or cleaning supplies, your approach to inventory management matters. Let’s explore best practices and the costs of inefficient management.
How Much MRO Stock Should I Hold in Inventory?
There’s no specific number of spare parts to hold in your inventory. Instead, use key performance indicators like these to achieve the best amount for your organization:
- MRO as a percentage of estimated replacement value: Estimated replacement value (ERV), also known as replacement asset value (RAV), is the total value of every item in your inventory. When your MRO inventory is roughly 1.5% of your total ERV, you leave the majority of warehouse space available for revenue-generating inventory without compromising on necessary parts for maintenance operations.
- Economic order quantity: Economic order quantity (EOQ) is the order size that produces the most overall value. It considers the cost of holding that amount of inventory in your warehouse alongside the cost savings from ordering in bulk. EOQ is useful for preventive maintenance tasks because you know the exact quantity of parts needed. You also know exactly when you’ll need those parts. EOQ can also help you estimate preventive maintenance costs and order quantities.
What Are the Costs of Poor MRO Inventory Management?
According to a study by RS Components, 40% of organizations feel pressured to reduce MRO inventory costs. And since MRO inventory management and materials make up about 47% of product procurement spending, cost reduction is essential — but complex. Over time, poor MRO inventory management harms operational and cost efficiency.
Every inventory item comes with a holding cost, also known as carrying cost. When you order more MRO materials than you need, or order them too soon, your holding costs increase. Effective MRO practices must include the right procurement strategies.
Apart from optimizing your procurement strategy, markdowns are the quickest way to combat overstocks. But what about non-revenue-generating items? You may need to scrap them, which creates waste, slashes profits, and increases overall costs once it’s necessary to restock.
Lastly, over-ordering MRO materials compromises inventory space, which can lead to stockouts of other key items. But in turn, without critical MRO materials in stock when you need them, you face unexpected downtime, loss of productivity, and increased operational costs.
How Should I Manage My MRO Inventory?
MRO inventory management is a constant challenge for maintenance managers. Keeping too much material in stock can drive up your costs, but failing to keep the right spare parts on hand can lead to unplanned downtime and idling.
Leveraging technology makes a huge difference in MRO inventory management. A good CMMS, like eMaint, can help correctly forecast your maintenance needs so that you can predict when you’ll need spare parts. eMaint can also track parts, improve inventory accuracy, and even auto-generate purchase orders.
How Do I Optimize and Maintain My Inventory?
Implement these MRO practices for effective inventory management. Over time, you can expect to see a reduction in operational costs and improved margins.
1. Create Cost-Effective Processes for Warehouse Teams
Standardize processes across your warehouse and supply chain, including daily tasks, responsibilities, and ordering procedures. Everyone should be clear about their maintenance, repair, and overhaul responsibilities.
2. Perform Routine Inspections for Equipment Reliability
Use a combination of preventive maintenance, predictive maintenance, and corrective maintenance operations, with an emphasis on proactive maintenance strategies. This enables timely repairs and reduces equipment downtime.
3. Emphasize Cleanliness and Routine Maintenance Activities
Take good care of your industrial equipment and assets to prevent damage and failure. Housekeeping activities such as dusting and cleaning, in combination with standardized maintenance processes, can keep production equipment and essential parts running longer. This helps avoid costly emergency repairs.
4. Practice Regular Cycle Counts
During cycle counts, your warehouse teams monitor inventory levels while inspecting quality. Flagging damage allows you to restock essential spare parts before you need them. However, if you don’t need the part soon, wait to reorder — this reduces holding costs.
5. Implement a Computerized Maintenance Management System (CMMS)
Instead of integrating an inventory management software solution into a complex network of other systems, consider a comprehensive CMMS. It does more than just manage inventory. With a CMMS, you can monitor and optimize your approach to inventory management alongside all your corrective maintenance, predictive maintenance, and preventive maintenance activities.
6. Leverage Data Analytics
With the predictive analytics tools from a robust CMMS, you can harness powerful insights from real-time and historical stats. Use data from condition-based monitoring, forecasting, and lead time to improve resource allocation and inventory management — as well as your broader enterprise asset management strategy.
Future Trends in the MRO Industry
What does the future hold for MRO processes and technologies? Here’s what seems likely, given current trends.
- Emerging MRO technologies: With the rise of artificial intelligence (AI) and predictive analytics tools, we’lllikely continue to see new advancements in MRO technologies. In particular, technologies will continue to build on the ability to forecast and prevent potential equipment failure, slashing unplanned downtime and costly repairs.
- Emphasis on cost efficiency: Organizations face increasing pressure to reduce operational costs — an MRO key challenge. To meet customer demands, new developments in technology, processes, and best practices will likelyprioritize cost-effective solutions.
- Sustainability: Overstocks and losses lead to waste. And that’s not just a hit to your margins; it creates environmental challenges, too. So, organizations looking to improve their carbon footprint, prioritize energy efficiency, and practice corporate social responsibility want more sustainable MRO processes. From sustainable packaging to reducing excessive orders, the MRO industry can do a lot to help our environment — and help organizations meet their sustainability goals.
Together, these trends will lead to improved efficiency, better margins, and increased customer satisfaction.
Best Practices for MRO Management
Maintenance managers face many challenges. A good CMMS can help.
Today’s plants are highly complex, making MRO a challenge. High-value assets need careful, well-planned maintenance to stay at peak performance. And most maintenance professionals today are tasked with overseeing multiple worksites.
A high-quality CMMS, like eMaint, takes the guesswork out of MRO by building a data-driven strategy for every aspect of your plant’s needs. eMaint captures, analyzes, and stores asset health data. It tracks work order competition, plans schedules, and assesses maintenance costs. It even handles MRO inventory.
eMaint CMMS is cloud-based, so managers can access data from just about anywhere. The result? An evidence-based MRO strategy that’s effective, easy, and sustainable.
To learn more about what eMaint can do for your organization, speak to a specialist.