We have systems in our production areas with electrical panels inside utility rooms. When locking out the system, the operator is required to leave the production area and go into the utility room, which should normally be restricted to maintenance staff only.

We would like to install remote lockouts for these systems so the operators can safely lock out their system without having to leave the production area.

Is the only option to install a disconnect in series with the existing disconnect and run large cables out to the production area, or would it be possible to install an MCR in series and have the lockout kill the control voltage to the MCR? This would be significantly easier and less expensive, but I don't know if code allows it.

Any advice?

You can have a look at the Safety Isolation System from Rockwell (http://www.ab.com/en/epub/catalogs/3377539/5866177/6388287/3377561/Introduction.html).
Maybe it does what you can. Maybe it is compliant with your local H&S regulations. Maybe it meets the size of your pockets

Awesome. I wasn't aware of this product from AB. It looks like it will do exactly what I need.

I'm doing some more research, but it looks promising. Thank you!

Be very careful here with what you are calling a "lockout". A lockout for maintenance requires a mechanical energy isolation device. The lock has to specifically disable the mechanism to transfer energy. Locking out control voltage or push buttons is specifically prohibited. If it is for mechanical service then it falls under Subchapter J unless it is construction in which case it falls under OSHA 1926 where a simple tagout procedure is allowed (but locks are encouraged), or electrical in which case it falls under Subchapter S (utilization equipment) or sometimes Subchapter R (for distribution equipment). Operators are allowed into equipment rooms if there are no exposed conductors for utilization equipment (Subchapter S) but not distribution equipment (Subchapter R).

A lockout for minor machine servicing and adjustment, which s essentially a production function, is NOT a lockout even if it involves using a lock. You must make sure that the lockout locks are distinct from these. You can't use the same locks for these functions. Lockout locks have to be distinct from all others in uses (see Subchapter J). So you can do what you want with these. They fall under Subchapter O. There MUST be a written procedure for performing this type of work, and again, no maintenance is allowed. In fact OSHA has also stated in a letter of interpretation that a lockout lock is ONLY to be used for servicing and maintenance. You can't just a lock to lock a piece of equipment out of service for any other reason such as when it is not currently in production.

OSHA has specifically commented on the Rockwell device. They have made it incredibly clear that it can only be used for servicing functions as per Subchapter O. It is not accepted for general lockouts (Subchapter J) or electrical lockouts (Subchapter R or S).

It sounds like you are on the right track here but please be careful because you need everyone to be crystal clear what each machine function ("lockout point") is for, and don't mix them up.