What is MRO inventory?

MRO inventory keeps track of these operational items. MRO items could include:

• Gloves, masks and other safety equipment
• Cleaning or janitorial supplies
• Valves, compressors and other industrial equipment
• Repair tools
• Office supplies
• Laboratory equipment
• Computers and laptops

Many companies fail to realise the importance of having good MRO inventory processes in place because MRO inventory is removed from product inventory and does not generate revenue. MRO inventory is usually replenished on a regular basis because these are supplies that keep the engine of your operations well oiled.

How to manage MRO inventory?

MRO inventory usually accounts for 5-10% of a company’s Cost of Goods Sold (COGS). While this might not seem like a lot, in the long term, the cost adds up. What’s more, the operational inefficiencies caused by improper MRO inventory management will compound over time. Here are 4 tips to keep MRO inventory under control;

Define critical operations

Understanding what maintenance, repair and operational processes are critical for business continuity helps you to determine what MRO items your business must always have in stock. Based on the frequency these items are used and the quantities they are used in, you can create a regulated replenishment cycle without having too many items in storage.

Cut the fat

As a business grows, more and more operational processes are created to maximize efficiency. Sometimes this backfires and you end up with multiple systems working to achieve the same goals. Do an audit of your equipment and processes to determine which items are not being used and which processes are outdated or are taking up too much resources. Remove those items from your MRO inventory.

Ease off during slow seasons

By using demand forecasting solutions, you can determine your high and low seasons. This will affect the scale of your production cycles. During low seasons, lower the resources allocated to MRO inventory if items are not being used.

Purchase strategically

One of the key contributors to inefficiency is when teams fail to communicate cross-functionally. The same MRO items may be needed across multiple teams for a range of purposes. Use an inventory management system where managers can look at purchase orders before they go out, add to and edit orders based on what their team needs and benefit from discounts and cost-saving that arrive from bulk orders.

MRO inventory is essential and unavoidable to the operations of any commerce business. Small businesses often overlook MRO inventory management until it's too late and they have unaccounted overhead costs.

Taking the time to implement the right inventory management solutions, infrastructure and replenishment strategy is the key to successful MRO inventory management and overall business growth.