Even a skeptic can see that artificial intelligence (AI) has the potential to transform the manufacturing industry. This advanced technology provides substantial benefits for factories, such as significant efficiency gains, lower capital expenditures, a reduced risk profile, increased productivity, and even tangible ROI.

But we must look beyond the hype and use AI thoughtfully. That means focusing on high-impact applications that are available today, not years in the future. 

In this overview, we’ll explain everything you need to know about using AI for MRO so you can get tangible ROI from your investment in your factory's future.

We will explore:

• Why you should focus on using AI in MRO
• Four high-impact applications for AI in MRO
  • Improving spare parts data
  • Optimizing spare parts inventory
  • Optimizing spare parts spend
  • Enabling better decisions and increasing productivity
• Summing it up: How to get ROI from AI

Why use AI to solve MRO challenges?

With all the potential applications of AI, you won't be surprised to learn that using it for MRO can have a high impact. But there’s one very good reason to focus your AI strategy here, says SPARETECH CCO and Co-Founder Dr. Lukas Biedermann.

“When you think about innovation or technology, you need to put yourself in the shoes of your frontline workers,” he says. “Whatever process you touch, there are people who deal with that process in the real world, in their daily lives. When you think of the future, you must focus on the human on the floor.”

To illustrate this point, let’s think—what do we see when we focus on the humans on the floor? Committed professionals facing big barriers to performing their jobs effectively.

Let’s say a machine in your production line fails. The MRO professional responds quickly by turning to spare parts records, the first step to getting the parts they need to make the repair.

Unfortunately, spare parts data at most factories is poor quality, making it difficult for the MRO professional to find the right part.

Instead of doing their jobs, they waste time looking for spare parts. This reduces their efficiency, increases downtime, and harms the factory's overall productivity.

This lack of good spare parts data prevents the MRO professional from performing repairs, as well as many other job functions. Without this data, they can’t:

• Know which spare parts they have in inventory, how many, and where to find them
• Determine the optimal number of each spare part to keep in inventory
• Pick the best time to re-order each spare part
• Decide which suppliers to order which parts from
• Optimize procurement spend
• Know which parts are obsolete (have been discontinued) and where to purchase successor parts
• Communicate effectively across maintenance and procurement

When MRO professionals lack the necessary tools to perform their jobs, it leads to bigger problems for your factory and a tangible hit to the bottom line.

Four high-impact applications for AI in MRO

With that in mind, let’s get to specifics. How do you use AI to solve problems for MRO teams, give them a force multiplier that helps them do their best work, and achieve tangible ROI for your factory and organization?

AI for better MRO data

The problem

MRO professionals lack good data on their spare parts inventory. Thus, finding spare parts for repairs or performing more advanced tasks such as optimization or predictive maintenance is challenging.

The cause

Most data problems at the factory can be traced back to simple human error in the data entry process. Another common problem is parts in inventory that are not in the ERP system and cannot be added because they are indistinguishable to the human eye.

Real-world statistic

SPARETECH’s average customer manages over 100,000 parts in their system using manual data processes.¹ At this scale, errors are virtually impossible to avoid.

AI can help by

• Checking the work of MRO professionals to ensure they enter good parts data
• Cleaning up and enriching existing records by checking them against a reference data set
• Identifying parts in inventory that have no record. (We believe this will come with advancements in image and text-based recognition)

“AI can check the human’s work. It can check that it’s not a duplicate record. It can scan the record to ensure there are no typos or other errors. It can ensure good governance and check that every record aligns with industry standards. And that’s the first step toward better data.”

Jack Reinke, Senior Account Executive at SPARETECH 

The benefits for your factory

You get an ERP system that works as intended, so that MRO professionals have complete, correct, and comprehensive on their spare parts inventory. With this, MRO professionals can quickly find the spare parts they need and keep the production line running, maximizing uptime and minimizing lost productivity in the factory.

Read an in-depth post about using AI to improve MRO data.

AI for optimizing spare parts inventory

The problem

MRO teams must choose the right number of spare parts to keep in inventory. If they keep too few, they risk not having the parts they need to perform a critical repair. If they keep too many, they create capital waste, require a larger factory footprint for storage, and create ecological problems when extra inventory is scrapped.

In today’s factory, choosing the right number of spare parts is virtually impossible.

The cause

The current method for determining the “best” amount of each part to store is a process called “min/max optimization.” This process is perfect in theory, but in the real world of the factory, it doesn’t work because MRO teams lack access to the reliable data they need to make calculations.

Real-world statistic

40% of any MRO inventory will go unused over a five-year period due to ineffective optimization workflows.¹

AI can help by

• Improving MRO data so that MRO teams can min/max effectively
• Training on historical data to make predictions about the future
• Advising MRO professionals about the optimal number of each spare part to order
• Suggesting effective strategies for “pooling” spare parts across factories

Our take

"With AI, you can optimize your inventory or adopt a strategy where you don't even need to have the part on hand; instead, you can get it when yo want. You don't need to worry about where it comes from—whether it's a factory within your corporation or a supplier."

Martin Weber, CEO of SPARETECH

The benefits for your factory

MRO teams will be able to perform min/max properly and even go beyond this simple process to optimize spare parts inventory in response to changes in the factory and the supply chain. This will ensure that every MRO team has all the parts they need when they need them, but they don’t waste capital on stockpiling extra parts to reduce risk.

Read an in-depth post about using AI to help MRO teams optimize spare parts inventory.

AI for optimizing spare parts spend

The problem
MRO procurement can account for a significant portion of a factory’s overall spend, but MRO teams are severely handicapped in their spend decisions.

The cause

First, the lack of spare parts data makes it impossible for MRO professionals to optimize their inventories. That means they spend extra on stockpiling parts that take up space and may never be used.

The second reason is the lack of transparency in the supply chain. Factory spare parts are highly variable, and MRO teams don’t have the information to know which suppliers have which parts. This data gap forces them to buy spare parts from line builders at a significant markup. 

Real-world statistic

The average factory faces a 10% increase in MRO spend year over year,¹ making it crucial to limit unnecessary expenses.

AI can help by

• Improving spare parts data so MRO teams can optimize inventory and limit spending
• Providing supply-chain transparency so MRO teams can choose where to procure which parts
• Training on MRO data to advise MRO teams on the best way to limit expenses without increasing risk of downtime

Our take

“AI will be very helpful to the human who need to decide whether to purchase one part, two, or ten. It’s a huge decision for the company, putting much pressure on the person making the final decision. AI can assist them in making the right choice based on their priorities.”

Martin Weber, CEO of SPARETECH

"In the past, spare parts purchasing was a safety net against machine downtime, leading to overstocked warehouses. With the help of AI, inventories can be connected so that MRO procurement teams buy only what's truly needed based on real-world demand."

Felix Dosch, Senior Account Executive at SPARETECH

The benefits for your factory

With better data and AI-generated advice, MRO professionals can better control their spending and ensure that the factory gets the most ROI from each dollar it allocates.

Read an in-depth post about using AI to help MRO teams optimize spare parts spend.

AI for better decisions and productivity in MRO

The problem
Today’s MRO professionals face significant challenges as they try to make good decisions and work efficiently.

The cause
As we explored above, MRO teams lack access to reliable spare parts data. This means they can’t make sound decisions about optimizing spare parts inventory or spending.

Similarly, today’s MRO processes and workflows limit their productivity. For example, the factory received tens of thousands of spare parts, which the MRO professional must enter into the ERP system using a slow, fully manual process.

MRO professionals also contend with a serious disconnect between maintenance and procurement teams, creating communication issues that slow work unnecessarily.

AI can help by

• Improving spare parts data so MRO teams can make data-driven inventory and spend decisions
• Consuming historical data to predict future outcomes
• Advising MRO professionals on the best possible options for inventory and spend
• Highlighting which parts are obsolete (have been discontinued) and where to purchase successor parts
• Improving data entry processes to eliminate human error
• Breaking down the barrier between maintenance and procurement

 Our take

“By providing better data, AI will make ERP systems work how they were always meant to. Now, MRO professionals can make better decisions and be faster, more confident, and more productive in their work.”

Martin Weber, CEO of SPARETECH

The benefits for your factory

Any factory that uses AI for these applications will solve several problems for its MRO teams. This means, in effect, offering them a force multiplier and boosting the factory’s overall efficiency.

Read an in-depth post about using AI to help MRO teams make better decisions and improve productivity.

Summing it up: How to get ROI from AI

AI is a crucial tool for building the factory of the future, but we must look beyond the hype and utilize it to assist MRO teams—and other humans on the floor—with their daily tasks.

The quality of MRO data is the best place to start with AI. This will enable MRO teams to make repairs faster and more efficiently. It will also set the stage for more advanced applications, like optimizing spare parts inventory and spending, better decision-making, and higher productivity.

And that’s not all that’s possible with AI once factories have used it to improve their MRO data. This opens the possibility of training AI to make predictions, offer analysis, and even advise MRO professionals on the best choices for inventory and spending.

Using AI as a force multiplier for MRO teams can yield significant gains for the factory, such as improved efficiency, reductions in capital expenditure, reduced risk profile, increased productivity, and tangible ROI. 

But AI won’t do all the work for you.

“AI is going to usher in a huge boost in efficiency for everyone. But how are you going to use it? To spend the least amount on inventory that you possibly can, or are you going to optimize for uptime while minimizing your inventory? You still need to decide what to do.”

Jack Reinke, Senior Account Executive at SPARETECH

¹ SPARETECH internal analysis