What‌ ‌Is‌ ‌MRO,‌ ‌and‌ ‌How Is AR Transforming MRO?

  • 10/7/2020
  • Read Time : ~4 min
what is MRO

MRO (Maintenance, Repair, and Overhaul) includes all the components—goods, services, tests, repairs, supplies, and equipment—required for the daily operation of a business, but are not part of the final product. While most companies have a good handle on traditional production inventory, MRO inventory and applications don’t get the same level of attention—and that can be an expensive oversight. For example, obsolete and/or excess inventory can tie up money that could be used in other areas of the organization. Conversely, not having the right inventory on hand means having to wait for it to arrive before being able to proceed with maintenance tasks; this additional downtime adds up over time and can be a costly expense.

Companies today rely on numerous organizations as part of their overall MRO requirements. The service industry is involved in any number of specialized services—often complex processes that require specialized equipment and expertise—to provide maintenance, repair, and overhaul services relating to specific types of components. Because MRO isn’t included in direct production costs, it is often overlooked in strategic and supply chain planning. However, it is an integral part of maintaining smooth operations—and one that manufacturers would benefit from giving greater consideration.

What is MRO’s impact on manufacturers?

MRO has a major impact on productivity in two ways. A disproportionate amount of time is spent on administering MRO; time which could be put to better, higher-value use elsewhere. Additionally, immediate and consistent availability of MRO supplies is essential for maintaining full capacity. Lack of proper safety equipment, delays on spare parts in the event of equipment failure, shortages in maintenance supplies—gaps in MRO like these can result in costly downtime and delays. Reliable availability of MRO resources contributes to uninterrupted operation. You don’t notice MRO when it’s working. You do when it isn’t.

An analysis by Manchester Business School found that although MRO accounts for around 20% of spending on materials, it “consumes about 80% of the process expenses.” MBS estimates MRO purchases account for 47% of the average business’ total procurement costs. Why? Because MRO procurement can be highly complex, involving multiple suppliers for multiple sites for a multitude of small value—but critical—items; often purchased ad-hoc.

According to the Manchester Business School, “while it takes a 10% increase in revenues to achieve a 20% increase in earnings per share, a 1% decrease in operating costs gains the same result.” Because MRO doesn’t appear on product invoices or Bills of Material (BOM), it often isn’t subject to the same level of strategic planning as direct production resources. But taking a strategic approach to MRO is becoming significantly easier thanks to technologies such as AR, and can yield a significant boost to cost efficiency and productivity. So, what steps can you take to optimize MRO?

Optimize MRO using AR

Augmented reality offers a number of critical advantages for MRO—including being able to streamline inspections, access remote expert assistance, and upskill on demand. Although there may be resistance to change at first, manufacturers that empower employees with AR training will stand to reap long-term benefits that far outweigh initial challenges, especially when faced with an impending skills gap in manufacturing.

Optimizing factory performance requires performing routine machine inspections and maintenance. In the past, workers have done this by hand using a checklist. Digital step-by-step instructions superimposed directly on employees’ field of view through AR headsets enable workers to complete inspections faster and more effectively. Coupled with voice-based instructions, employees will be able to access the most up-to-date information, resulting in greater accuracy and ensuring that important parts won’t get overlooked.

Service organizations will also benefit from using AR for MRO. When technicians are dispatched to remote worksites, they are often faced with having to use printed service manuals to figure out unfamiliar product configurations. Service organizations that deploy AR-enabled remote expert support can provide workers the ability to navigate unfamiliar and/or complex maintenance and repair tasks knowing they can get real-time guidance from experts, alleviating the need to send seasoned technicians on site visits. At a time when the manufacturing industry is faced with a looming skills gap, AR would allow for a single expert to service multiple sites by providing their expertise to employees in multiple field offices without having to travel to remote worksites.

AR allows employees to access relevant, up-to-date information on-site when they need it, which means employees would be able to upskill on-demand. Employees would no longer be plagued with having to try to remember too many complex procedures at once which could cause unwanted errors and delays. Student technicians would have the opportunity to train and work with detailed 3D models of systems, reducing on-site risk exposure as well. This would also help reduce training time while increasing first-time fix rates.

Another advantage of AR-based training aside from proven increases in employee engagement is that it would reduce wear and tear on actual machinery In real-word case study after case study, it has been shown that equipping service technicians with AR capabilities (thus enabling them to identify issues prior to arriving at a job site) allowed them to perform their duties up to four times faster than through traditional methods. AR has also helped reduce the length of service calls by a factor of 4.

As the cost of AR hardware continues to decrease, more manufacturers are seeing AR for MRO as a wise investment. What at first will appear to be a competitive advantage will soon turn into a necessity.

To learn more about how to use AR for MRO read PTC’s report: AR for Maintenance, Repair, and Overhaul

  • Augmented Reality

About the Author

Prema Srinivasan, Digital Content Marketing Manager

As a Digital Content Marketing Manager, I bring the latest technology stories to the forefront. I'm passionate about engaging readers and empowering decision makers with relevant, up-to-date content.