One of the main things that companies are consistently judged on is their ROI, or return on investment. When companies have a large return on investment they are said to be a highly profitable company. The opposite is true for companies that have a low return on investment. While there are many things that affect a company’s return on investment, it can be difficult to pinpoint the exact things that have the greatest impact on it. Because of this, it can be difficult to understand where the company is failing if they have a low return on investment for one quarter.
To help ensure that you are doing everything you can within your facility it is important to understand the impact that MRO optimization has on your companies return on investment. Here are some of the main ways that the optimization of MRO can affect your ROI.
#1) Reducing Cost of Duplicates in Inventory
The more money that you have laying in inventory the less money you have on hand to claim as profits. If you are constantly putting money into your inventory that is less money that you have to claim as a return on investment. Each facility only needs one of everything in their inventory. If you have duplicates in your inventory, this results in needing to spend more money on your inventory. Therefore, you have less money that you can say is a profit.
Reducing the cost of duplicates within your inventory can significantly help to increase your return on investment. This is the main strategy that many companies may use to help boost profit margins in a specific quarter. If you are a small business, the need to have an accurate inventory is more important than ever.
#2) Reducing Costs of Bad Data
If you are able to have an accurate way to control for all MRO practices you can significantly increase your return on investment. Bad data has many consequences and one of those negative consequences is reduced profits, which directly affects your company’s return on investment. Bad data takes time and money to fix. It can trickle its way down into other areas of the business and have many consequences in all areas of the business. To help reduce costs of bad data you need to ensure that your MRO is efficiently and accurately optimized. If you are unable to do this in house you should highly consider a third party company to help you.
#3) Reducing the Need To Fix Data
If you have bad data within your digital platform, you will need to correct this data. The cost to fix the bad data from your MRO processes takes a great deal of time and money. You must hire a person to help fix the errors, which can significantly reduce your ROI. Managing your MRO processes and not needing to fix data can help increase your ROI.
#4) Increasing Productivity Within A Facility
An optimal MRO strategy can significantly affect a company’s ROI. If your MRO operations are working as efficiently as possible you will naturally see greater productivity within a facility. You will notice people working more efficiently, less time being wasted, less time fixing errors on a digital platform, and less time on repairs. All of these factors can significantly affect the productivity within a facility and help to increase your return on investment.
#5) Reducing Wait Time for Repairs
Another main factor of MRO optimization that can significantly affect your ROI is the time needed to make repairs to your machinery when it is not operational. Your mechanics are a great asset to your company, however, their time is not always efficiently managed. If your storeroom is disorganized or if your inventory is not properly tracked you may be increasing the time it takes to make repairs on your equipment.
If you are looking to increase your return on investment it is crucial that you reduce the time it takes to make repairs. This means that you need to have an organized store room with all material on hand. If your mechanics are easily able to locate the necessary parts they can get to work quicker. The faster they make repairs the more productive your plant will be. This ultimately results in a larger ROI.
If you are in control of a facility it is crucial that you understand how an optimal MRO process can affect your ROI. The greater your ROI the better your facility will be rated and the more likely you are to get promoted