Just about every company has at least some MRO inventory—that is, inventory that’s dedicated to maintenance, repair, and operations. But if your company wants to avoid costly work stoppages or unnecessary, last-minute spending, top-notch MRO inventory management is essential.
This article will define MRO inventory, dive deeper into MRO inventory management, and touch on five key components to optimal maintenance, repair, and operations inventory management.
What is MRO inventory?
MRO inventory stands for maintenance, repair, and operations inventory. While not “sold” to a customer, this inventory is utilized by a business to conduct preventive and corrective maintenance on an asset or keep day-to-day business activities running efficiently. MRO inventory includes the consumable supplies that enable a business to provide its goods or services.
Examples of MRO inventory
MRO inventory can look very different from business to business and industry to industry. After all, the items a business needs to keep its assets in tip-top shape and production running smoothly vary from sector to sector. Still, these examples of MRO inventory can help you better understand how to classify your own supplies and materials.
- Tools, supplies, and materials used for diagnosing, preventing, and repairing problems
- Machine oil and similar lubricants
- Light bulbs
- Spare parts
- Additional valves and tubes
- Safety equipment, including masks, earplugs, hard hats, and safety goggles
- Janitorial or cleaning supplies
- Office supplies and equipment
Related: What are the four types of inventory?
What is MRO inventory management?
MRO inventory management is the process of ordering, consuming, tracking, and reordering inventory essential to your business’s maintenance, repair, and operations strategy.
Unlike traditional inventory management, some businesses forget to prioritize MRO inventory management because it focuses on items that are “not for sale.” But in reality, most companies are dependent on MRO inventory to turn a profit. After all, without the right MRO inventory, a warehouse’s drone could break down, an auto body shop could run out of flashlights, or a classroom could run out of lightbulbs.
Typically, businesses adopt an MRO inventory management strategy to prevent stockouts and work stoppages. While a company can keep inventory manually using a document or a spreadsheet, inventory software often provides the best results. This is partly because modern inventory apps can notify you when you need to reorder, check on, or replace an item.
Why is MRO inventory management so essential?
MRO inventory is key to maintaining your business’s operational health for many reasons. Here are just three of the many reasons why properly managing your MRO supplies and materials is crucial.
1. Prevent work stoppages
By always having the right amount of MRO inventory on hand, your company needn’t worry about shutting down production until an essential product is back in stock. But if you don’t know how much of a critical item you have in stock, it can be easy to run out of a crucial supply or material accidentally.
Say, for example, you work in manufacturing. You don’t sell lubricant, and it’s not part of a finished good your company will eventually sell. But the employees on your production line still rely on the lubricant to keep manufacturing equipment running smoothly. Run out, and you could face a broken machine—and a seriously costly work stoppage.
No time to read this article now?
Get Supplies & Materials Inventory Management Now!
Get Supplies & Materials Inventory Management Now!
Discover the three methods to track and manage inventory
Learn how to track and maintain an inventory list
Get actionable tips and best practices for inventory tracking
2. Avoid costly overstocks
On the flipside, stocking too much MRO inventory unnecessarily ties up a company’s cash—money that could often be better allocated to other endeavors, like marketing, hiring, or replacing old equipment. The right MRO inventory management strategy relies on tight inventory control protocols, so your business is stocking exactly what it needs, without wasting money on inventory that won’t be used in the near future.
To determine just how much MRO inventory your business needs, you’ll want to review old usage reports and inventory records. You’ll also need to balance past usage with your business’s forecasted growth to continue to place appropriately-sized orders as your company evolves.
3. Keep productivity high
Regardless of what industry you’re in, you likely prioritize productivity at your business. And while there’s nothing glamorous about MRO inventory, these are the very supplies and materials that keep your company’s light on, literally and figuratively.
Of course, you want to avoid work stoppages—that’s for sure. But poor MRO inventory management can also create frustrations that aren’t so obvious. For example, when an employee wastes time tracking down the right lightbulb or can’t perform preventative maintenance because a particular chemical is missing, these “slowdowns” slowly chip away at your company’s productivity and profitability.
Key components of MRO inventory management
These MRO inventory management best practices can help keep your business organized, profitable, and productive—all by ensuring that you have the inventory your business needs to keep things running smoothly.
1. Creating detailed, organized, and specific inventory lists
You’ll need to organize your MRO inventory based on your available space. While there’s no right way to organize a stockroom, storage closet, or even a warehouse, you should pick an organizational system that makes sense to you and your team, then stick with it.
When organizing your MRO inventory, you must record all the essential details of your supplies and materials.
When creating or updating your inventory list, ensure that you note all the attributes of each item you stock, from glass cleaner to generator. Why be so specific? Specificity helps employees select the right item to perform a certain action. Using the right screwdriver, the right valve, the right chemical—it matters. Being hyper-specific also helps technicians identify suitable substitutes when an ideal part is unavailable.
It’s also critical that your team correctly record the location of each item. After all, what good is a robust inventory if your team can’t find anything on it?
You can also add high-resolution photos and attachments like manuals to your inventory list, if you’re using inventory software, which can improve specificity while speeding up inventory counts and audits.
2. Appropriate reordering
As you already know, ordering the “perfect” amount of MRO inventory allows your company to operate optimally without tying up cash on products not currently needed. This, once again, is known as inventory control. When you reorder MRO supplies and materials, you’ll be weighing what your business needs with what it can afford—and how much storage space it has available.
You can also tighten up your reordering process by focusing on your relationship with suppliers, rethinking your supply chain, and calculating key metrics like lead time and safety stock.
Whether you place orders yourself or work with a procurement team, appropriate reordering is key to proper MRO inventory management.
3. Keeping an eye on important dates
Tracking key dates for maintenance, repair, warranty end, and expiration. You can track these dates on a paper calendar, by creating events in a shared virtual calendar, or by creating alerts in an inventory app.
4. Tracking items as they are used, consumed, sold, moved
For genuinely accurate MRO inventory management, your business should track supplies and materials whenever they are received, moved, or consumed. This is also known as perpetual inventory—and it’s much easier to sustain with the help of inventory management software.
While you could technically keep track of every item’s every move manually, barcode and QR code scanning offers more accurate tracking in a fraction of the time.
5. Selecting the right software
Finally, if you decide that MRO inventory management software is right for you, you’ll want to select one that offers the features you need to streamline every day, inventory-related tasks. Look for inventory software that provides the following features:
- Detail-rich profiles for every item
- Barcode and QR code scanning (ideally in-app, with a phone or tablet instead of external scanners)
- Ability to generate barcodes and QR codes for unlabeled stock
- Alerts and reminders for low stock and key dates
- Highly customizable reports to better understand usage, item history
- The ability to track items across multiple locations
Sortly is a top-rated inventory management software solution designed to help you keep track of all kinds of inventory, including MRO supplies and materials.
Ready to get your MRO inventory under control? Start a free trial of Sortly today.