Last edited 08 Sep 2020

Maintenance, repair and operations procurement

FaceMask.jpg

Personal protective equipment (such as gloves, masks and protective clothing) can be categorised as maintenance, repair and operations (MRO) items.

Contents

[edit] Introduction

Maintenance, repair and operations (MRO) procurement refers to a management method used by facility managers to ensure the continuous operation of an organisation. MRO is associated with miscellaneous and extraneous expenditures required to run an operation; in other words, anything used during the organisation's processes that is not part of an end product. MRO procurement is also known as indirect procurement.

[edit] Typical MRO items

Supplies that fall into the category of maintenance, repair and operations are those that are invisible most of the time - until they are depleted or missing. Then they become a priority.

These items can include cleaning supplies, equipment parts, upkeep materials and furnishings. Examples of regularly purchased MRO items include:

Since they are not always considered 'essential', MRO items may sometimes be purchased as an afterthought or at the last minute. This lack of planning can result in ad hoc procurement methods that can be less efficient and more costly. It can also lead to rogue buying practices of inadequate items from disreputable suppliers.

Some organisations may not account for these purchases accurately. This can have budgetary consequences. Even though many MRO items are nominal in terms of costs, hidden expenses of unplanned procurement (such as delivery surcharges) can add up quickly over the course of a year.

[edit] Equipment maintenance

MRO for equipment is indirectly tied to procurement based on the availability of components necessary to complete maintenance tasks. MRO for equipment is dictated by the following priorities:

  1. Proactive, which is maintenance that is scheduled on a regular, preventive basis.
  2. Corrective, which takes place after a problem has already taken place.
  3. Predictive, which is based on trends that have been gathered through monitoring activities on equipment.

Planned MRO can make the process of procurement and execution part of a regularly scheduled routine.

[edit] The importance of standardisation

Facilities managers or procurement departments in charge of acquiring MRO items can face challenges when purchasing history is incomplete. Confusion can increase exponentially if other departments follow the same disconnected practices.

While it is understandable that procurement measures may be expedited in urgent situations, the associated data should nonetheless be collected as soon as possible. Creating a standardised method for MRO inventory collection can reduce purchasing issues and lead to a more efficient and sustainable process based on proactive lifecycle management.

Personal protective equipment (PPE) can be used as an example. When an MRO item like a PPE mask is entered into an MRO master document inconsistently (or not at all), this complicates the ordering process. Extra time may be spent by someone trying to find the right product, who eventually decides to go with whatever is least expensive, but turns out to be inadequate. Without accurate descriptions, inventory details or parts numbers, the purchasing agent has to guess which item is required.

[edit] Inventory management

Unreliable MRO inventories can also cause problems with materials - both in the form of unnecessary stockpiles or shortages. Companies may resort to excessive purchasing practices when items return to the supply chain, causing unnatural inventory fluctuations and hoarding behaviours.

Poor inventory management of MRO items can have a subsequent impact on operations, in the form of delays or large scale disruption when companies are unable to purchase items necessary for maintenance work or other essential operations.

MRO inventory that has been gathered and managed properly can help organisations create a more sustainable, proactive method of operating. This often requires a technology-based approach to integrate all aspects of the MRO supply chain.

Using MRO software can help ensure essential items are available when necessary. Tasks can include data management, strategic procurement sourcing and critical inventory record keeping. All of this data can be compiled in a MRO materials master catalogue and used for enterprise resource planning or enterprise asset management purposes.

[edit] Strategic MRO practices

To create a cohesive MRO procurement policy, facility managers, purchasing professionals and other representatives from engineering, operations and finance need to work together. It may even be necessary to assign someone (or one department) with the task of managing all MRO throughout the organisation.

This person (or department) will handle a variety of tasks and will need to become familiar with every item that falls under the MRO umbrella. It may be helpful to find someone who is familiar with supply chain management or has a relationship with MRO providers.

Instead of training an existing staff member (or members) for this task, some organisations opt to hire a third party service provider in a vendor-managed inventory (VMI) arrangement. This outsources responsibilities to an organisation (often an MRO provider) to handle management and procurement responsibilities.

[edit] Related articles on Designing Buildings Wiki

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