Month: August 2019

Key Takeaways

• MRO stands for maintenance, repair, and operations
• MRO is often overlooked, but can greatly impact an organization’s maintenance costs, inventory management, productivity, and procurement processes
• Computerized maintenance management system (CMMS) software helps industrial maintenance teams manage and track MRO activities

There are a number of daily activities and processes required to keep a business running smoothly. Facilities and equipment need proper upkeep. Workers need personal protective equipment (PPE) to keep them safe from hazards. Stockrooms must be adequately stocked with tools, cleaning supplies, and other materials. These activities (and others) are referred to as maintenance, repair, and operations (MRO).

Unfortunately, MRO activities are often seen as minor relative to other business processes such as production. However, the degree to which an organization manages and carries out MRO activities greatly benefits – or hampers – business operations. As the term suggests, the maintenance team plays a large role in performing MRO. This article provides an overview of MRO as it relates to maintenance management.

What is MRO?

MRO is an acronym that stands for maintenance, repair, and operations. Broadly speaking, MRO refers to any activities and processes needed to run a business such as asset maintenance, accounting, customer service, and even administrative tasks like responding to emails and reception duties.

In manufacturing environments, MRO is understood to describe the activities associated with the upkeep of the company’s assets. It includes physical maintenance performed on buildings (including any structures and grounds); electrical, lighting, HVAC, and plumbing systems; and equipment used in the production of finished goods or delivery of services.

Let’s further define what maintenance, repair, and operations means.

Maintenance refers to actions taken proactively to prevent an asset from breaking down. Proactive maintenance strategies include preventive maintenance (PM), condition-based maintenance (CbM), and predictive maintenance (PdM).

Repair refers to actions taken to restore a non- or under-performing asset to operational condition. This type of reactive maintenance activity is called corrective maintenance (CM).

Operations involve managing the day-to-day activities that help the business run efficiently. Maintenance operations include:

• Work order management
• Asset and equipment management
• Spare parts inventory management
• Preventive maintenance planning and scheduling
• Work request management

To make managing MRO activities more effective, organizations utilize computerized maintenance management system (CMMS) software. We discuss more about the benefits of using a CMMS for MRO later in this article.

Why is MRO Important?

MRO impacts an organization in four main areas.

Maintenance Costs

Asset failure is inevitable, but without adequate maintenance and repair, assets fail more frequently. Unplanned failures are more costly to resolve and lead to other losses due to production shutdowns, defective or damaged products, unproductive labor, missed business opportunities, and so on.

Poor maintenance also places undue stress on machinery, shortening their lifespan. As assets wear down, organizations must then decide whether to fully replace the asset or continue to repair it. Depending on the type of asset, new purchases can range from thousands to millions of dollars.

For repairs, the organization can either contract with third-party service providers or use their own personnel. Outsourced services increase maintenance costs by charging higher rates. If internal resources are used, the organization must purchase and stock the materials needed to perform maintenance work.

Inventory Control

Executing MRO activities requires the organization to purchase a variety of materials, supplies, and parts. However, it is common in small businesses that MRO purchases are carried out by maintenance staff that does not have strong skills in purchasing or procurement. Because of this, inventory management is often out of control.

For example, it is common for maintenance staff to over-order in fear of running out of stocked items. However, uncontrolled purchases lead to wasted money, cluttered stockrooms, and run the risk of stocking obsolete parts. Other times, disorganization makes it hard for employees to find parts, so orders are placed for parts that are already in stock but cannot be located.

Another situation that can present itself is when parts are not available when needed. Known as a stockout, this situation increases maintenance costs by extending asset downtime, thereby increasing total repair costs. To resolve the situation, organizations pay higher costs for expedited shipping or use risky stop-gap measures until parts arrive.

Learn more about MRO Inventory Management

Plant Productivity

Poor MRO management results in a number of hidden costs due to low productivity. Organizations that operate on reactive maintenance wait around for assets to fail – and when they do, it leads to excessive downtime that could have been reduced or avoided.

Without proper documentation of maintenance needs, maintenance teams tend to perform work that is unnecessary, unproductive, or counter-productive. Maintenance work on equipment that doesn’t need it leads to unnecessary downtime and production backlogs.

Stockouts prevent technicians from carrying out needed maintenance and repairs, leading to production stoppages. Instead, critical maintenance is deferred or operators are left idling until assets are returned to service.

Purchasing and Procurement

Organizations constantly purchase goods and services to support MRO efforts. Commonly, maintenance staff makes a high number of unplanned, low cost purchases that, when combined, make up a fair amount of the organization’s total expenditure. Proper MRO management reduces purchasing costs through volume discounts, vendor management, and other inventory optimization techniques.

Types of MRO

MRO can be divided into several subcategories including:

• Infrastructure repair and maintenance
• Production equipment repair and maintenance
• Material handling equipment maintenance
• Tooling and consumables

Infrastructure Repair and Maintenance

Infrastructure is the property owned by the organization, which includes the land and any buildings on it. Like other assets, infrastructure needs regular maintenance. MRO activities related to infrastructure include hard facility management services like building maintenance, responding to work requests, and capital improvements, as well as soft services like pest control, groundskeeping, and janitorial services.

Production Equipment Repair and Maintenance

This area of MRO is concerned with avoiding setbacks to production. Asset-intensive industries like manufacturing utilize a variety of equipment to produce finished goods and services. Over time, machine components wear down to the point where they stop working, causing failures and downtime. In some industries, production downtime costs thousands to tens of thousands of dollars per minute!

Manufacturing equipment requires different types of maintenance and repair depending on the makeup of their internal components and related systems. For example, moving mechanical parts need regular lubrication to prevent unwanted heat or vibration. Other components simply need to be replaced just before failure or shortly after they wear out. Electrical systems call for periodic calibration to verify their output.

Material Handling Equipment Maintenance

Material handling equipment includes equipment used to transport raw materials to production or packaged goods to warehouses or loading docks. Examples of material handling equipment include forklifts, conveyor systems, palletizers, and robotic arms. Though not directly involved in production, these assets are an important part of a smooth production process, and therefore need to be maintained.

Tools and Consumables

Tools and consumables are the items used to perform repairs on infrastructure, production assets, and material handling equipment. Tools include both power tools (i.e., drills, electric saws, and grinders), hand tools (i.e., hammers, screwdrivers, pliers), and their related bits. Unlike consumables, tools are durable and used over time.

Consumables are items that must be replaced regularly because they wear out or are used up. Consumable items include spare parts and supplies like adhesives, oils, and coolants. In addition, personal protective equipment (PPE), safety gear, and cleaning chemicals are also considered consumables.

Managing MRO with a CMMS

Industrial maintenance teams can leverage a computerized maintenance management system (CMMS) to manage MRO. A CMMS provides a single platform for managing maintenance operations and allows organizations to do the following:

• Improve maintenance tracking by keeping a record of all maintainable assets.
• Make maintenance work more effective by providing technicians with fully detailed work orders.
• Plan and schedule maintenance for equipment and facilities.
• Streamline inventory holdings by tracking the usage and movement of spare parts, tools, and consumables.
• Lower inventory purchasing costs by optimizing orders from low-cost vendors.
• Increase productivity by providing access to maintenance data through internet-connected mobile devices.
• Gain visibility of maintenance needs by implementing a work request system.
• Analyze asset performance to see which assets are costing the most money and why.
• Make better MRO management decisions by leveraging data from maintenance reports.

Improve Maintenance Operations with FTMaintenance

MRO is a crucial aspect of running a business, whether a small company or a large manufacturer. When left unmanaged, MRO processes pose significant risk to the organization. CMMS software like FTMaintenance improves MRO and MRO inventory management by automating maintenance operations, and providing a platform for documenting, managing, and tracking maintenance activities. Request a demo to learn how FTMaintenance can improve your maintenance operations.

What is a Bill of Materials?

In a maintenance context, a bill of materials (BOM) is a formal, structured list of parts and their respective quantities that make up a specific component or asset. It can be thought of as a recipe of sorts. A BOM acts as a centralized point of reference for determining the parts that comprise a piece of equipment.

Bills of materials vary in complexity depending on an organization’s level of asset management. At the most basic level is a pseudo-bill of materials, which lists critical spares and common replacement parts. The next level in complexity is a maintenance bill of materials, which includes all parts that the maintenance team is realistically expected to repair and/or replace during an asset’s lifetime. Asset-intensive organizations or organizations with robust asset management requirements may use an equipment bill of materials (EBOM), which lists every part and material that makes up an asset.

Importance of a Bill of Materials

Imagine cooking a meal without a recipe. You will need to travel to the fridge, cabinet, or pantry every time an ingredient is needed. Worse yet, you may not have the items you need on hand, causing you to go without, find a substitution, or make a trip to the grocery store.

The scenario above is analogous to performing maintenance. Bills of materials support high-quality, efficient asset maintenance. Identifying the parts required to maintain assets before maintenance begins helps organizations determine whether they have what they need to execute maintenance work. In addition, BOMs support MRO inventory management activities by ensuring the correct parts (and quantities) are available.

Organizations that do not use bills of materials are prone to unnecessary downtime, incorrect inventory purchases, incorrect part assignment on work orders, and other costly mistakes.

What Should be Included on a Bill of Materials?

The information included on a BOM is specific to an organization’s maintenance process. In general, a bill of materials includes the following information:

• Part name
• Part number
• Description of the part
• Quantity
• Unit price
• Vendor name
• Vendor part number

Bill of Materials Example

Below is a representation of a multi-level BOM. It shows the relationship between an asset, its related subassemblies, and parts/components in a parent-child hierarchical view.

Depending on the system used, a bill of materials may be presented in a single-level or nested list in a tabular format (i.e., arranged in a table with rows and columns).

Who Uses a Bill of Materials?

A bill of materials has many end users. Maintenance planners use a BOM to help determine what parts to buy or what parts may be needed in the future. BOMs help stockroom employees know which parts belong to a particular asset. Maintenance technicians utilize a BOM to identify the parts to retrieve from a stockroom, or if parts are unavailable, who to call to order replacements. Because many different stakeholders will use the bill of materials, it is important to keep it up to date and periodically review it to ensure its accuracy.

Benefits of a Bill of Materials

The benefits of using a bill of materials for maintenance are widespread. In general, it helps you better visualize how your assets and parts are related. Below are some benefits a BOM provides:

• Reduced downtime: Technicians can refer to the BOM to quickly identify parts needed to complete repairs.
• Simplified procurement and purchasing: Less research is required to identify what parts need to be reordered. Part numbers are readily available when creating requisitions and purchase orders.
• Optimized maintenance scheduling: A BOM ensures that all of the correct parts are available for upcoming maintenance work.
• Fewer incorrect inventory purchases: Since there is less opportunity for guesswork, fewer mistakes are made when reordering parts.
• Streamlined inventory holdings: If not being used elsewhere, parts belonging to decommissioned assets can be removed from the stockroom, reducing the carrying cost of storing unneeded spare parts.

Bill of Materials Software

For maintenance teams, BOM creation and management is best done in computerized maintenance management system (CMMS) software. A CMMS automatically generates a bill of materials based on the parts used on work orders. Because the CMMS stores asset and MRO inventory in a single database, users can access robust part information in just a few clicks. When it comes time to reorder parts, inventory staff can view purchasing and vendor information from right within the software.

Effectively Manage Bills of Materials with FTMaintenance CMMS

Bills of materials help organizations build relationships between assets and their related parts, providing many benefits for managing maintenance operations. FTMaintenance Select provides a single platform for managing spare part inventories, including the ability to create asset-specific parts lists. Request a demo today to learn more about FTMaintenance Select CMMS software.

Clear communication is essential for business success. Often times, we communicate by talking with one another, but this can fail to get the message across. If you’ve ever played the game Telephone – where a message is passed verbally from person to person (slightly changing each time it’s passed) – you know this to be true, especially if the message is long and complex. Written communications, such as work orders, help to close this information gap.

What is a Work Order?

A work order is a written means of communicating information about a task. For example, an electrician may receive a work order to complete a wiring project at a construction site. Production staff may be given a work order that instructs them to calibrate a machine. A work order may be used to tell the sanitation crew that equipment is ready to be deep cleaned. A maintenance work order provides details about maintenance, repair, or operations work, such as replacing a part, returning an asset to operating condition, or performing an inspection. In some organizations, work orders are also commonly referred to as “jobs”.

Types of Work Orders

There are multiple types of maintenance work orders. Depending on the organization, maintenance work orders generally fall into one of the following categories:

• Corrective maintenance (CM): Includes the restoration of assets to optimal or operational conditions.
• Preventive maintenance (PM): Includes regularly occurring time-based or usage-based maintenance such as inspections, cleaning, or part replacements.
• Condition-based maintenance (CbM): Uses real-time equipment data collected by sensors to trigger work orders when assets are approaching failure.
• Predictive maintenance (PdM): Similar to preventive maintenance, but uses real-time and historical equipment data to trigger jobs.

Lifecycle of a Maintenance Work Order

A maintenance work order is a “living document” that goes through multiple stages throughout its life.

1. Creation: A maintenance work order identifies the work and resources necessary to complete the job. The job is then scheduled and assigned to a technician, setting a deadline for completion. Maintenance work orders may be created in a number of ways:

• Customers or non-maintenance employees submit maintenance requests to the maintenance team when assets are not performing correctly. These requests are reviewed and turned into work orders.
• A maintenance manager creates work orders for planned maintenance work or in response to issues that have been reported.
• Maintenance technicians request or create work orders for issues noticed during their daily work.
• Work order software automatically generates work orders for regularly occurring preventive maintenance activities.

2. Performance: As the work is being performed (or shortly after it is complete), technicians document the resources (i.e., labor, materials, time) actually used to complete the work, and include any special notes about what was done.

3. Closure: Once the job is complete, the work order is approved, if required, and closed. The closed work order becomes a permanent record of what was done and what resources were used. Upon closure, the work order is filed away.

4. Analysis: An asset’s maintenance history is comprised of the contents of all its associated closed work orders. The history is available to assist with future troubleshooting, fine tune procedures, prepare for audits, and evaluate the performance of assets and maintenance employees.

Information Included on a Maintenance Work Order

The information contained on a maintenance work order varies, but typically includes the following:

• The name of the requesting party
• A way to track the work order, such as a work order number
• An explanation of the problem
• The name and location of the asset(s) in need of service
• Instructions for carrying out the work
• The required parts
• Who is assigned to the job
• The desired completion date and time or recurrence schedule (for preventive maintenance work orders)
• Cost estimates
• Attachments such as documentation, images, etc.

Managing Work Orders

As crucial as work orders are to your maintenance operations, they are almost useless if not managed properly. Surprisingly, many organizations still use manual work order management systems, such as pen and paper, whiteboards and bulletin boards, or spreadsheets. These systems lack many important capabilities, such as comprehensive scheduling, automatic work order generation, automated notifications, and reporting. Computerized maintenance management system (CMMS) software is a much better option.

A CMMS provides a work order management system that helps you effectively track work orders through their lifecycle. Using a CMMS, anyone in maintenance can create, manage, track, complete, and analyze work orders. The software stores all maintenance information in one place, allowing you to quickly build work orders.

When work orders are assigned or due, the CMMS can automatically notify the appropriate employees. Maintenance managers can access the system to see a work order’s status and see who is working on what. When completed and closed, the CMMS stores work orders in history where they can be analyzed using maintenance reports.

FTMaintenance Work Order Management Software

Choosing the right work order management system is just as important as the work orders themselves. FTMaintenance ensures that no work orders fall through the cracks by automating work order generation, activation, assignment, and distribution. Mobile accessibility expands FTMaintenance work order management to technicians on the go. Discover all the capabilities of FTMaintenance work order software.