Optimizing “hidden” maintenance, repair, and operations (MRO) supply chains has the potential to deliver far-reaching benefits for manufacturing companies, from reduced inventory and lower operational costs to increased production capacity and efficiency.


To maximize productivity, manufacturing equipment must be effectively maintained. In many manufacturing companies, however, responsibility for MRO is split between multiple functions, with limited central planning and with individual sites or maintenance teams responsible for the supply of tools, and parts. The result of this poor coordination can be significant hidden waste. Research by management consultancy McKinsey, for example, showed that thefront-line technicians at one defense contractor spent more than 20% of their time waiting for parts, tools and equipment. Combined with other sources of waste, from a heavy administrative burden to bad coordination between functions, these technicians were only able to spend around two hours of a typical nine-hour shift actually fixing equipment.

Bad use of technician time is only the tip of the iceberg, however. Companies with poorly managed MRO functions suffer a host of other extra costs and inefficiencies too.  Parts inventories can be excessively high, unnecessarily duplicated, or even obsolete. And poorly maintained equipment can result in increased energy consumption, quality issues, or loss of production, driving up capital and operating costs.