Though MRO inventory takes generally a very big slice,
say 35-40% , from the annual budget, it is not given its due attention and
planning, experts say.
We have to consider now the fourth type of inventory: MRO Goods.
MRO stands for Maintenance, Repair and Operations. This inventory is
dealing those items that cannot be discussed under the other types of
inventory: Raw Materials,
Work-in-Process and Finished Goods. MRO deals with goods that are used in the
production but they are not part of the finished goods, finished product.
Let us take Maintenance.
Everything connected with the workplace as well as the work must be
maintained lest ill-maintained workplace and machineries required for the
process of production will doom the enterprise to final loss and failure in
business. And to maintain the company has to spend continuously and sometimes
considerably depending on the kind of business.
You need mops at least to keep the place clean and, remember, the mops
are never part of the finished product of the company.
All the tools used in repair also do not form parts of the finished
product. For example; repair tools like
screw drivers and wrenches, hammers so on.
Of course, at present with digitalization being a universal phenomenon,
your company must have smart gadgets like smart phones, computers, laptops and
necessary furniture. Again all these things cost some real money to the
company. We therefore understand that under Maintenance some fundamental
categories like consumables, equipments and technology-related tools do find
MRO also has its inventory. The very goal of any inventory is storing
things your company needs for the process of production, to put it very
simply. Over-storing or under-storing
affects the business financially. Buying in excess eats into your finance
making it scarce when you most need it; buying less affects ultimately the
supply of your product to the customer exposing you to the threat of a customer
You may remember we are discussing the drivers of supply chain which
are generally five: production, inventory, location, transportation and
information. We have spent some time on the first two and now in our next
session, we shall go to the next driver: Location.