4 Ways to Achieve MRO Reliability

Asset management strategies often do not recognize the importance of work

processes that include maintenance, repair and operations (MRO) stores
management. The operating costs of a typical MRO storeroom represent a drain on
profits and a diverse effect on plant reliability. In most organizations, these
expenses are viewed as a cost of doing business. However, recovering the incurred
costs offers an opportunity to contribute to plant reliability and ultimately to the
organization's profits. MRO operations should be viewed as a plant function just like
any other activity that is utilized to support a reliable plant.

In a manufacturing environment, any function that loses money, detracts from

reliability or is a hindrance to production would be changed, substituted or
eliminated. So why is the MRO function allowed to exist when it loses money,
increases mean time to repair (MTTR) and lessens reliability? To optimize the
investment in an organization's internal MRO supply chain and to make MRO
operations a profit contributor, it frequently is necessary to change from the
existing MRO mode of operation to a reliable MRO status. Following are four
functions that must be implemented, operated and sustained to achieve greater
MRO reliability:

Master Data Leadership

It all begins with master data leadership (MDL), which means there must be a
standard that properly describes each part on a consistent basis while eliminating
SKU duplication. This will lower inventory, increase inventory accuracy, increase fill
rates and reduce downtime. Just as important, it also ensures the correct part and
quantity are on hand when needed.

For instance, a multi-national pharmaceutical company maintained eight facilities in

North America. A total of 260,000 MRO SKUs were listed among the plants. An MDL
program was initiated to identify each SKU, establish a consistent description
protocol, determine duplications (the same part under different names) and
consolidate with sustainability. Among the duplications discovered were six
separate SKUs for AA batteries. The proper description should have been:
"Batteries, AA, Energizer #E96." Instead, they had batteries, flashlight batteries,
penlight batteries, batteries for lube checks, AA batteries and Energizer batteries. If
requisitioners only recognized one SKU number that was out of stock, they wouldn't
know that many were in stock under a different name and SKU number.
Consolidation reduced the inventory by 85 percent with zero stockouts, and this
was just for AA batteries. Imagine what it did for the other 260,000 SKUs.

An Asset Reliability Strategy

Organizations must have an asset reliability strategy to take advantage of the
technology that can connect the MRO strategy to plant reliability goals. For
example, a billion-dollar food processer had an excellent maintenance team that
was adept at correcting maintenance problems as they occurred in the plant. They
were proud that they could restore a down asset quickly, but they did not improve
plant reliability. Management invested in an asset management system, which
failed because of resistance from the plant disciplines. A third-party company was
then engaged. It set objectives and key performance indicators (KPIs) that included
the MRO storeroom as part of the solution. Plant maintenance soon evolved into a
world-class operation, optimizing MTTR, worker efficiency and plant reliability.

A Customized CMMS
A computerized maintenance management system (CMMS) can connect the
benefits of MDL and asset reliability into usable data to support maintenance
reliability programs. A CMMS must be more than processing work orders,
controlling budgets, etc. It must be capable of "connecting the dots" of all principles
of preventive maintenance procedures to optimize MTTR.

For instance, a heavy manufacturer in the Detroit area maintained an enterprise

computer system to control its activities. The system offered a CMMS system for
maintenance use, but it was difficult to use and did not provide the necessary
controls and information to support reliable maintenance efforts. When a separate
CMMS system was employed, it connected MRO operations to maintenance
programs, putting both parties in sync while still integrating with the company's
enterprise system.

Supply Chain Management

The overall management of the MRO supply chain, from the manufacturer through
to the consumer in the plant, must be directed by experts. Unless the storeroom
management has the knowledge and authority to operate at a world-class level, the
benefits obtained from master data leadership, asset reliability and a customized
CMMS program will not deliver a return on investment (ROI) or be sustained.

Going from an existing process to a reliable MRO storeroom requires change, which
in turn requires management support. To gain this support, the potential benefits,
both financial and non-financial, must be calculated and documented. These
benefits can accrue to all plant disciplines, including procurement, finance,
engineering and maintenance.

To calculate the potential, it may be necessary to select a provider that can

implement and manage the MRO supply chain. By evaluating all the factors that
comprise the current total cost of MRO distribution, a provider can show the
benefits that are accruable to all, i.e., an ROI document. The ROI should be
accompanied by a proposed statement of work supported by measurable KPIs that
ensure performance supporting the goals of the procedure change.

In conclusion, the MRO supply chain is replete with duplicated tasks and
unnecessary costs. In addition, the strategy used to manage the MRO storeroom is
often not in sync with the asset management approach employed by plant
maintenance. By employing the four functions outlined above, you can achieve
MRO coordination with asset reliability as well as optimize the total cost of
ownership.