From afterthought to advantage: The case for MRO optimization

Manufacturers are investing heavily in digital transformation, automation, and new production technologies. According to Deloitte¹, 98% of manufacturers have begun their digital journeys, and technology-related spending has risen to 30% of operating budgets, up from 23% the previous year. These initiatives dominate strategic roadmaps, promising future-ready operations and competitive advantage.

Yet amid this push toward innovation, maintenance, repair, and operations (MRO) optimization often receives less attention. Despite its essential role in keeping plants running, ensuring critical spare parts are available when needed, preventing unplanned downtime, and enabling timely repairs, MRO lacks the visibility and perceived impact of more headline-grabbing programs.

MRO holds a low place on the priority list

New research shows that MRO ranks well behind other enterprise priorities. Enhancing supply chain resilience (49%), driving digital transformation and innovation (44%), and implementing new manufacturing technologies (40%) all outpace MRO optimization, which just 34% of manufacturers treat as a strategic priority.

Figure 7: Organizational priorities among strategic initiatives

This misalignment is rarely intentional. Instead, it is a byproduct of how MRO is structured, measured, and resourced. In many organizations, MRO is distributed across procurement, operations, and maintenance teams, each with its own systems, budgets, and objectives. As a result, its value is fragmented, and its performance is difficult to measure in a way that resonates with executive decision makers.

At first glance, deprioritizing MRO might seem harmless compared to the urgency of other transformation programs. Production lines are running, parts are being ordered, and the storerooms are stocked. But under the surface, the financial and operational costs are significant and compounding, including:

• Higher carrying costs: Excess or duplicate stock ties up capital and drives up storage, insurance, and handling expenses.
• Longer downtime: Critical spare parts take longer to locate or source, extending maintenance windows and risking missed production targets.
• Inefficient procurement: Teams repurchase parts already in stock and rely on emergency purchases at higher cost. Managing multiple suppliers increases the administrative burden while weakening leverage in negotiations.
• Inconsistent data quality: Disparate systems, human error, and a lack of standardization undermine downstream activities like demand forecasting and stock planning.

These are not isolated operational nuisances; they have a direct impact on P&L.

MRO: the overlooked margin lever

This is where the disconnect becomes costly. Our research shows that 74% of executives who have invested in MRO optimization report moderate to significant margin improvements. For many large manufacturers, even a 2% margin gain equates to millions in value, which can be reinvested in capacity expansion, innovation, or resilience measures.

In other words, the very function most often treated as a background activity is in fact one of the most reliable and repeatable levers for improving profitability.

MRO optimization delivers this value in three ways:

• Cost efficiency: By rationalizing inventory and eliminating duplicate purchases, companies can reduce working capital requirements and procurement spend.
• Operational uptime: Reliable part availability reduces downtime risk, enabling higher asset utilization and production stability.
• Decision quality: Accurate, enterprise-wide data supports better forecasting and procurement strategies, reducing reactive purchasing.

In an environment of persistent supply chain volatility and inflationary pressure, these benefits are competitive necessities.

Executive discussion points for consideration

To close the recognition–action gap, leadership teams should focus discussions on three critical areas:

Who owns MRO performance across the enterprise? Without clear accountability, optimization efforts stall. Cross-functional ownership spanning procurement, operations, and maintenance ensures that decisions reflect both cost and availability priorities.

How can we achieve a single, accurate view of inventory across all sites? Standardized, enriched material master data, integrated across systems, prevents duplicate purchases, enables reliable demand forecasting, and supports better procurement decisions.

How can MRO optimization compete for investment alongside other enterprise priorities? Embedding it within transformation programs positions it as a core enabler of cost control, uptime, and resilience rather than a background maintenance activity.

By tackling these areas, manufacturers can free up working capital, reduce downtime risk, and gain a reliable lever to improve margins. The opportunity is not abstract: it is immediate, measurable, and well within reach for companies that act decisively.

Our latest report, The MRO strategy gap: The overlooked lever for margin growth, is a powerful starting point for this urgent discussion, and uncovers the full scale of the MRO opportunity, including:

• The operational and procurement challenges executives are facing across the industry
• Where dedicated MRO software is already delivering measurable impact
• The extent of unused inventory tying up capital year after year, and how much it really costs.

Download the full report to see how your organization stacks up, and where untapped value could be unlocked. 

Sources

¹Deloitte, Digital maturity index, 2025