4 Ways Optimized MRO Helps Manufacturers Overcome Labor Shortage

Sixty-three percent of manufacturers are struggling to fill critical labor gaps, according to a study from the Workforce Institute at UKG. And shift work volume remains 10% below pre-pandemic levels, according to the report. Reasons for the gap include:

• High turnover
• Attendance infractions
• Recruiting challenges
• Competition for skilled workers
• Negative industry perceptions
• Less workers entering the field

This shortage results in decreased production output and missed deadlines, which affected manufacturers prior to the pandemic. Many companies have attempted to overcome these production challenges by giving more hours to existing employees. However, those employees are now experiencing higher levels of burnout, injury and illness, resulting in increased turnover.

Overtime expenses incurred from these decisions are hurting manufacturers’ bottom lines. Aside from a talent shortage, ongoing disruptions in the supply chain create additional challenges for manufacturers in both procuring supplies and producing goods, leading to company-wide bottlenecks.

Curious if there are solutions that will strengthen your operations amid these challenges? Optimizing your maintenance, repair and operating (MRO) inventory management program may be an ideal place to start.

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How Better MRO Management Can Mitigate Labor Shortage Concerns

MRO generally accounts for 80% of transactional activity in the supply chain and material management processes. From a labor perspective, the time spent managing purchase orders, receipts, inventory put-away and paying invoices often add up to a major time and resource investment. What’s more, MRO is often neglected and viewed as a necessary evil or simply the cost of doing business and the activity is baked into the business cost structure. These hidden inefficiencies show up in operations, maintenance and finance departments and drive unnecessary churn within the business.

Does this sound familiar? “I spend about 50% of my day sourcing suppliers, ordering parts, approving orders and searching for existing inventory on the shelf.”

By optimizing your MRO supply, your business is better equipped to forecast spend, manage downtime, and reduce burden rate in key departments including procurement, operations, maintenance and finance.

Martin Integrated Supply Solutions can improve your MRO procurement and manufacturing operations in four ways:

Consolidate Purchasing Activity

With each MRO transaction, your personnel spend time setting up a purchase order (PO), managing invoices (cycle time) and negotiating pay terms. Those activities take time and resources and each interaction comes at a price — the transactional costs involved in producing a PO for an organization can range from $35 to $1000. One way to reduce logistical costs, while reducing labor investment is to consolidate your purchasing activity through vendor-managed inventory programs.

By consolidating vendors and transactional processes, you can reduce workloads, decrease administrative tasks, negotiate better pricing and drive savings to your business.

Optimize Storeroom Inventory

MRO inventory is often neglected or left as a secondary job for someone to manage within a manufacturing facility. Without a dedicated resource or effective technology that manages the routine task of issue, receipt, cycle counts and adjustments to inventory, manufacturers run the risk of stockouts and costly shutdowns.

An effective storeroom inventory management program can streamline the control of products and goods throughout your facility and enterprise. A comprehensive storeroom management program would assess the current state of inventory, analyze cost and implement better ordering controls to create leaner inventory based on actual and forecasted usage trends, eliminating the guesswork.

Not only are material and freight costs reduced, but your operations and maintenance teams will spend less time searching for the parts they need and more time focusing on their core functions.

Improve Maintenance and Reliability Effectiveness

The reliability of a manufacturer’s assets and the efficiency of their maintenance teams to keep these assets running optimally is essential to the success of their organization. Unplanned downtime can occur for a variety of reasons, and may include low-quality parts, reactive maintenance or pushing the equipment beyond its performance expectations. Being prepared for these unplanned events is critical to help manufacturers ensure their assets return to operations as quickly as possible to meet production demands.

Lean maintenance and reliability organizations require dependable inventories and easy access to the spare parts that support the assets.

A robust spare part management program can identify and catalog the parts necessary to maintain the machine, stock critical spare parts and develop strategies to share those assets across an enterprise ensuring the technicians have the right part, in the right quantity, at the right time. Improved MRO inventory can improve three key metrics:

• Improved Mean Time to Repair (MTTR)
• Improved Mean Time Between Failures (MTBF)
• Improved Mean Time to Failure (MTTF)

Improve Asset Management

In today’s lean manufacturing world, manually tracking maintenance cost and MRO inventory needs has become a relic of the past. Companies have automated the work-order and asset management process to allow maintenance and reliability technicians to track and plan maintenance activity and inventory usage through Computerized Maintenance Management Systems (CMMS). CMMS programs are available in larger ERP systems or as bolt-on software packages that feed information seamlessly back to the customer’s financial and procurement systems.

This central hub for collecting, tracking and analyzing data for maintenance operations and work orders allows the reliability team to forecast and plan for asset maintenance through preventative and predictive strategies that result in increased reliability, reduced repair cost and right-sized inventory. Your CMMS asset management system will strategically organize your assets with their appropriate spare parts, making it easy to generate work orders, assign maintenance tasks or sell the spares when you remove the asset.

By strategically tracking maintenance data, companies can calculate performance metrics such as labor hours spent on maintenance, number of equipment breakdowns, frequency of repairs and Overall Equipment Effectiveness.

Optimize your workforce and supply chain with Martin Supply’s Integrated Solutions

If you’re looking to fill the gap from today’s tight labor market, effective MRO management through Martin Integrated Supply can help. We work with you to develop custom-tailored solutions that help you operate better. Take the burden of these tasks off your staff and optimize your workforce with the capabilities Martin Supply offers:

• Storeroom Reset
• Storeroom Management
• Supply Chain Management
• Order Control Analysis
• Maintenance and Reliability Services
• Reporting and Analytics

Learn more about Martin Supply’s integrated supply solutions.

At Martin Supply, we understand your operation depends on reliable access to the right parts at the right time. Let our experts assess your current state of operations and create a tailored solution to start saving money on your supply costs.