What is MRO (maintenance, repair and overhaul)?
Updated · Reviewed by Israel Margulies, founder and CEO of High Point GPS
MRO stands for maintenance, repair and overhaul: all the work that keeps a machine in service, from routine servicing through fixing failures to rebuilding major components. In purchasing, the same letters often mean maintenance, repair and operations, the supplies a business buys to keep equipment and buildings running. An equipment fleet deals with both, and both end up on the same work orders.
Maintenance, repair and overhaul: where the term comes from
The overhaul meaning comes from aviation, where MRO shops and MRO providers maintain airframes, engines and components. The FAA’s definitions in 14 CFR 1.1 show how the pieces fit: maintenance means "inspection, overhaul, repair, preservation, and the replacement of parts," and preventive maintenance is defined separately as simple or minor preservation and the replacement of small standard parts.
Heavy equipment, trucking and industrial plants borrowed the term. In a fleet shop, MRO maintenance covers scheduled services and inspections, repair covers fixing what broke, and overhaul covers taking a major component apart and restoring it before it fails.
MRO as maintenance, repair and operations
Purchasing departments use MRO for the indirect supplies a business consumes while it operates: filters, grease, fasteners, hand tools, hoses, safety supplies, shop rags and cleaning products. These items don’t go into a product you sell, which is why they get their own category. The US General Services Administration ran a Maintenance, Repair and Operations purchasing channel for federal agencies and in July 2019 announced the Maintenance Repair Facility Supplies (MRFS) channel, which combines the MRO and janitorial and sanitation channels into one program.
For a fleet, the line between the two meanings is thin. The filter kit on a PM work order is an MRO supply; the PM service is MRO work. Track them together and you get a true maintenance cost per machine.
Repair, overhaul and rebuild: the difference
A repair returns a failed part or system to working order. It fixes the problem in front of you and nothing more. An overhaul goes further. The FAA’s rule on records of overhaul and rebuilding (14 CFR 43.2) lets an item be called overhauled only when it has been disassembled, cleaned, inspected, repaired as necessary, reassembled and tested to approved standards. A rebuild must also be tested to the same tolerances and limits as a new item, using new parts or used parts that meet new-part tolerances.
Those definitions are legal terms for aircraft, but they are a good test for any shop invoice. When a vendor quotes an "engine overhaul" on a loader, ask what gets disassembled, which parts are replaced as a rule, what tests are run afterwards and what warranty applies. Caterpillar’s Certified Rebuild program, for example, describes more than 350 tests and inspections, automatic replacement of parts that don’t meet reusability guidelines, engineering updates released after the machine was built, and reconditioning work it says an overhaul doesn’t normally include, with a new product identification number at the end.
What MRO looks like in an equipment fleet
Each piece needs a different kind of planning. Maintenance runs on a schedule. Repairs need a fast path from report to work order and parts on the shelf. Overhauls need a budget and a slot in the slow season, because a machine can be out of service for a long stretch while a major component is done.
- Maintenance: oil and filter services, greasing, inspections and adjustments on a schedule set by hours, miles or the calendar.
- Repair: a hydraulic hose that burst, a starter that died, a cracked bucket tooth adapter. Some of this you plan once an inspection finds it; some arrives as a breakdown.
- Overhaul or rebuild: engines, transmissions, torque converters, final drives, hydraulic pumps and undercarriage, done once a component reaches the end of its expected life or its oil analysis and performance start to slide.
- Operations supplies: the consumables and shop stock that all of the above draws on.
Planning overhauls before they plan you
Overhauls are the most expensive line in MRO and the easiest to see coming. Record the meter reading when each major component was installed or last rebuilt, so you can see component hours instead of machine hours. In a hypothetical case, a dozer with 14,000 hours on the meter could have a transmission with 3,000 hours on it, and the history should tell you that without a phone call to the person who remembers.
Watch the signals that move the date: oil analysis trends, blow-by, slower cycle times, rising fuel use, more repair work orders on the same system. Then compare the quoted overhaul with what the machine will earn afterwards. An overhaul on a machine you plan to sell next year has little time to pay back; on a machine you plan to keep for five more years it has much longer. Your own lifecycle cost per hour is the number to weigh it against.
Keeping MRO inventory under control
MRO stock is cheap per item and endless in count, which is why it leaks money. The costs show up as emergency buys at retail prices, duplicate stock of the same part under three descriptions, and supplies nobody can tie to a machine.
- Separate stocked parts (filters, belts, wear parts for your machines) from shop consumables you expense in bulk
- Give every stocked part one record with its part number, vendor and shelf location
- Issue parts to work orders so each machine carries its own parts cost
- Set reorder points from real usage and supplier lead time
- Buy filters and service parts for the next month’s PM before the work orders open
Managing MRO work and parts in FleetZap
FleetZap keeps the maintenance and repair side of MRO in one work order list. Preventive maintenance schedules open work orders by engine hours, miles or the calendar with the right procedure attached; operators report repairs by scanning a machine’s QR label; and outside jobs such as a dealer overhaul go to a vendor with their reference number and charge, so the vendor cost lands on the job and the machine. Repairs carry problem, cause and remedy codes, and the failure analysis report shows repeat offenders.
On the supply side, parts carry quantity on hand, a reorder point, a shelf location and a weighted-average cost. Each machine lists the spare parts it uses, parts issued to a work order come off stock, and low stock turns into purchase orders grouped by vendor. Every asset shows lifetime and 12-month maintenance cost, cost per hour and a keep, watch or replace verdict to set beside an overhaul quote.
Key takeaways
- Give each major component its own hour count from the day it was installed or rebuilt, and plan its overhaul against that number.
- If an overhaul quote doesn't say which parts are replaced as a rule, get that in writing before you compare it with a rebuild or a replacement machine.
- Book the overhauls you can see coming into the slow season a year ahead, and order long-lead parts when you book.
- Count any MRO purchase made outside your parts records as a sign the stock list or the reorder points need work.
Sources
Frequently asked questions
What does MRO stand for in maintenance?
MRO most often means maintenance, repair and overhaul: the full range of work that keeps equipment in service, from routine servicing to rebuilding major components. In purchasing and supply chains, MRO usually means maintenance, repair and operations, the indirect supplies such as filters, fasteners, lubricants and tools. Which meaning applies depends on whether someone is talking about work or about buying.
What is an MRO company?
An MRO company performs maintenance, repair and overhaul work for equipment owners. The term is most common in aviation, where MRO providers service aircraft, engines and components under FAA rules. In heavy equipment, dealers and component rebuild shops play the same role. MRO distributors, a different kind of company, sell maintenance supplies such as tools, fasteners and lubricants.
What is the difference between maintenance, repair and overhaul?
Maintenance is the routine work that keeps a machine running, such as servicing and inspections. Repair fixes a specific failure and returns the item to working order. Overhaul means disassembling a component, cleaning, inspecting and repairing it as necessary, then reassembling and testing it. The FAA’s 14 CFR 43.2 uses that definition for aircraft overhaul records.
What are examples of MRO supplies?
MRO supplies are items a business consumes to keep equipment and buildings running without becoming part of a product. Examples include oil and fuel filters, grease and lubricants, belts and hoses, fasteners, hand and power tools, welding supplies, safety gear, shop towels and cleaning products. In a fleet shop most of them are issued to work orders or charged to shop overhead.
Is MRO software the same as a CMMS?
Largely, for an equipment fleet. A CMMS manages the maintenance and repair work, its schedule, the parts it uses and the history per machine. Aviation MRO systems also have to meet the FAA’s maintenance record rules in 14 CFR Part 43, which trucks and loaders don’t face. For trucks and heavy equipment, a CMMS with parts and purchasing covers what most shops mean by MRO.