MRO consumables often aren’t very glamorous, but they’re essential to plant operations.
What Are MRO Consumables?
MRO is defined as maintenance, repair and operations/operating supplies. What’s included in this category will vary from business to business.
MROs can be grouped into a few categories such as: consumables, equipment, plant upkeep supplies, technology and furniture. MRO consumables include such items as cleaning supplies, safety equipment, lubricants and office supplies. They might also include laboratory supplies like beakers, test tubes and safety glasses.
Understanding the Place of MRO in Business
Considered individually, consumable MROs may seem small and inconsequential but when the absence of one shuts down production, they take on a grave importance.
In an article in Supply Chain Review, this example was cited:
Michael DeCata, president and CEO of Lawson Products, tells the story of one of his company’s largest customers—a $4 million account. A review of what the company bought last year came down to this:
- The average piece price was $0.94.
- The average piece price of the 100 most expensive items was $3.54.
- And, the average piece price of the 100 largest volume products was $0.11.
The article, titled “Maintenance Repair and Operations (MRO) Consumables: Where the web and People Work Together,” goes on to discuss changes in the MRO landscape with regard to ecommerce.
Overall, the MRO consumables market represents about 20% of the entire industrial distribution market, accounting for between $20 billion to $25 billion out of $125 billion-plus annually. Small distributors dominate the industry, with the three largest distributors accounting for only about 15% of the total market. Amazon Business, launched in 2015, is naturally trying to change this.
Since manufacturing companies depend on MRO consumables to stay in production, managing their supply chain is essential to staying productive. Distribution is evolving to ensure optimal inventory levels and continuous supply.
One strategy: the distributor makes regular on-site visits, checks inventory levels and restocks materials as needed.
Another trend: using vending machines to control inventory. A September article in Modern Materials Handling says 24% of companies are using vending machines to track usage of items. This kind of tracking discourages casual over-use and theft, reducing consumption by significant numbers.
“The machines can be set up to require swipe or “code” access to obtain the MRO goods, and they can be configured to restrict access to certain products only accessible to authorized users of the consumables and supplies… An additional 38% of respondents plan to explore the use of vending machines for their cleaning supplies, lightbulbs, nuts, bolts, screws, oils, lubricants and other MRO products over the next two years.”
Know Your MRO Terms
Getting a handle on your MRO supply chain is an important way to stay competitive. As you pursue different strategies, check out this
comprehensive glossary of terms provided by SDI, which offers MRO/indirect integrated supply services.