MRO Asset Management: 2024 Trends and Its Positive Impact on Manufacturing

MRO, which stands for Maintenance, Repair, and Operations, plays a crucial role in the procurement sector and operational facilities. For years, MRO has often been overlooked or managed reactively, leading to inefficiencies and increased costs for businesses. A proactive approach to MRO, supported by robust asset management practices, can significantly enhance operational efficiency and profitability.

An effective MRO asset management strategy can:

• Positively impact long-term profitability.

• Utilize recent advancements in technology to track assets effectively.

• Streamline maintenance and repair processes.

• Add efficiency to overall MRO practices.

What Is MRO Asset Management?

MRO asset management involves overseeing the resources and items used for the maintenance, repair, and operations of facilities. It includes materials and supplies necessary for manufacturing but not part of the final product, such as cleaning agents or equipment maintenance tools.

Categories of MRO Assets

MRO assets are typically categorized as follows:

1. Infrastructure Maintenance and Repair

   • HVAC equipment

   • Safety apparatus

   • Furniture

   • Computer hardware

2. Production Equipment Repair and Maintenance

   • Motors and compressors

   • Belt conveyors

   • CNC equipment

3. Material Handling Equipment Maintenance

   • Pipes and valves

   • Face masks and professional attire

   • Gloves and other Personal Protective Equipment (PPE)

4. Equipment and Supplies

   • Office equipment

   • Nails, screws, and gaskets

   • Chemicals, lubricants, batteries, and hand tools

Importance of MRO Asset Management

MRO assets can account for as much as 47% of a typical organization's procurement expenses. Poor asset management can result in:

• High delivery fees

• Ineffective maintenance activities

• Unexpected production halts

• Excessive inventory backlogs

Developing a comprehensive MRO strategy helps organizations identify and mitigate risks, optimize inventory management, and align leadership around key procurement objectives.

Optimizing MRO Asset Management

Emerging technologies and methodologies have introduced significant improvements in MRO asset management. Below are the key trends and strategies:

1. Asset Tracking Systems

Deploying asset tracking systems enhances maintenance and repair processes by managing the entire asset lifecycle. These systems provide actionable insights into asset usage, aiding decision-making about repairs versus replacements. Examples include:

• Utility asset tags

• High-heat barcode labels

• Equipment tags and cable labels

2. KPI Development and Tracking

Developing Key Performance Indicators (KPIs) helps organizations measure and improve MRO effectiveness. Common KPIs include:

• MRO Expense: Keeping MRO costs under 10% of the total procurement budget.

• Out-of-Stock Events: Tracking frequency to identify systemic issues.

• Inventory Turnover vs On-Hand Inventory: Targeting a 30-day inventory turnover cycle.

• Rush Orders vs Resupply Ratio: Keeping rush orders to 8–10% of all replenishment orders.

3. Data-Driven Decision Making

Leveraging data management systems, AI, and machine learning enables:

• Predictive maintenance by analyzing historical downtime data.

• Early detection of potential disruptions.

• Reduced storage costs and increased profit margins.

Conclusion

MRO asset management is critical for maintaining efficient and sustainable business operations. By adopting proactive strategies and modern technologies, businesses can optimize their MRO processes, minimize risks, and achieve greater operational efficiency.

ShifaIntl offers robust MRO asset management solutions that help businesses implement these strategies effectively, leveraging advanced digital tools to minimize costs and enhance productivity.