The MRO Disconnect

Published January 6, 2015

In our recent MRO supply chain management survey, we asked more than 200 professionals involved in plant operations, particularly the MRO storeroom: The MRO/indirect materials storeroom causes reliability issues or downtime at your plant: Very frequently; Often; Occasionally; Rarely; Never.

60.2% said the storeroom rarely or never causes downtime. Of course, our boots on the ground tell us differently. As do conversations with prospects, client leaders, and industry experts.

George Krauter, in previous blogs, has written about the MRO ‘storm’ room, where, he says, conflicting objectives from the different departments collide:

  • Finance wants to maintain budget controls and lower inventory
  • Engineering wants new equipment and the spare parts to support that equipment
  • Maintenance wants to avoid downtime by stocking more parts
  • Purchasing wants to buy parts at the lowest cost

The results from our question show exactly that scenario coming in to play. It means procurement and operations are not communicating about important issues in the plant. Maintenance, meanwhile, is caught in the middle, storing sub stock for a rainy (re: downtime) day. Or worse, others are avoiding the storeroom and going it alone to get the parts needed to keep production on line.

Beyond that, there is an even more significant reason for such disconnect: Plant management concerned about providing reliable plant operations are generally not aware that the unreliable MRO storeroom is a major cause of extended Mean Time To Repair (MTTR). A reliable, world-class stores operation contributes to plant reliability and corporate net profits.

Companies simply don’t know what materials they have or don’t have. Nor do they know how much this lack of knowledge is costing them. A more profitable course would be to concentrate on their core expertise and recognize that storeroom management should be assigned to the experts who can truly achieve optimum reliability.