• Repair & Refurbishment is an effective MRO tactic to reduce the spend on parts which can be effectively repaired or refurbished instead of buying new ones. In general, the cost to repair/refurbish a part is 50% of the cost of a new part. 

• Current ERP systems do not allow for easy tracking of repair spend.
• Need supplier to provide actual repair spend. 

• Since this MRO tactic generates significant savings and we are counting it in NA, how can we ensure that it is accounted for in the productivity of all sectors?

Cost reduction per unit due to Repair & Refurbishment counts as P&L Productivity if we can determine a sound baseline, there is a YoY rate reduction, and the process is of recurring nature. 

Governance:

• Establish a process & policy to account for repaired parts. Leverage the supplier to keep track of repaired parts. 
• Record productivity based on cost of a new part vs. cost of repair. 
• Use the TCO approach and consider impact on life of repaired part, additional expenses i.e. freight, supplier spend/margins, etc.