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6 Things to Look for in an MRO Service Provider

In today’s competitive markets, the optimization of MRO supply chains has become a highly discussed issue in regards to process efficiencies. MRO supply chain challenges are by no means a new issue, but with major technological advancements made in the past few years, the industry has taken enormous leaps forward. However, with the newest technological advances in supply chain optimization, there are a number of factors that have been brought into the picture that should be addressed by all MRO service providers.

mro logistics service provider

Integrating all valuable resources, and allowing them all to benefit from each other is a supply chain idea of old that has recently gotten much harder. With data coming in from so many different sources, and with stakeholder groups all wanting to benefit in their own way, the root problems of the MRO supply chain grows in both scale and complexity. These factors have companies big and small turning to MRO service providers to optimize their process.

At SDI, we’ve compiled a list of the 6 things to look for in an MRO service provider to give decision makers insight into what proficiency in the supply chain management industry should encompass.

1. Effective Data Standardization & Management Strategies

Clean data is the cornerstone of any modern business and a critical part of any successful MRO solution. The effective management of accurate, reliable information provides visibility and empowers better decisions that translate into a competitive advantage. It all starts with a baseline. Once you measure your baseline, you can launch continuous improvement measures. Processes are streamlined, workflow improves and productivity increases. Redundant practices are eliminated and the entire organization saves time and money.

2. Beneficial Sourcing and Supplier Relationship Building Tactics

After completely cleansing the data and achieving a clear understanding of the unique targets and goals of an organization, an integrated supplier should establish productive relationships with your existing supply base and seek mutually beneficial relationships with new suppliers. The goal is to source the right product from the right supplier based on client requirements -   including fit, form and function, delivery and price.

An effective MRO service provider should provide strategic sourcing recommendations including right sourcing, supplier consolidation, re-sourcing, product standardization as well as performance management, risk assessment and continuity of supply—all to deliver the lowest total cost of ownership.

3. Efficient, Centralized P2P Transaction Services

Business Process Outsourcers (BPOs) should manage all MRO transaction services from requisition through supplier payment including order processing, order confirmation, order expediting, receiving, returns, supplier invoice reconciliation, three-way match and supplier payment for goods and services. By implementing a BPO solution, manufacturers benefit from streamlined processes, compliance to negotiated contracts and leveraged category knowledge as well as improved efficiency and accuracy of the transactions that flow through the organization. That translates to controls and compliance resulting in increased savings for both clients as well as suppliers. 

4. Best-In-Class Storeroom Operations Resources

BPO’s should provide qualified, experienced on-site staff to operate storeroom activities, manage inventory and deliver premier customer service to the manufacturer’s stakeholders. More than just knowledgeable staff, storeroom operations should be driven by proven processes that are customized to meet the clients’ unique business requirements. These processes and resources need to be supported by state-of-the-art, MRO purpose-built technology to deliver efficient storeroom management and long-term, continuous improvement.

5. Inventory Optimization Techniques

Traditionally, inventory has been managed with a min/max or over/under approach. Specialized systems customized for MRO by BPO service providers should look to improve upon that greatly by analyzing data, recognizing patterns, and utilizing demand planning to predict specifically for each part and process. This leads to optimized inventories as well as reduced excess overhead and freight costs in the process.

6. State of the Art Technology and a Focus on Continuous Improvement

Third party organizations have the advantage of being focused exclusively on, and investing specifically in, the purpose-built custom systems and technology required to support MRO process and operations, optimize the entire MRO supply chain and provide sustained value through continuous improvement efforts. Traditional ERP systems are not designed specifically with MRO in mind to help organizations truly achieve best-in-class performance. While the efficient management of MRO may be consistent across businesses, a knowledgeable integrated solution provider should have custom technology that they use to support their process - which in turn optimizes the benefits to their clients.

And while many MRO distributors have technology built to support their clients, the difference in technology for an integrated MRO process is that the platform manages the process, rather than just for the specific function of purchasing. Additionally, MRO service providers that truly focus on continuous improvement will also have reliability engineers to help you enable sustainable production by eliminating unexpected equipment downtime and improving MRO process reliability - all while still reducing the total cost of your MRO. 

When choosing an MRO company partner with, these 6 key points should be the basis of what is addressed first and foremost. If an MRO service provider can only provide a few of these services, the work that is done will have diminishing returns, and the supply chain will continue to show significant flaws. When you decide on an MRO service provider, use this checklist to make sure your provider has what it takes to compete in the fast-paced, continually evolving industry of supply chain management.

Contact us today to learn more about SDI’s approach to supply chain management. 

Success Story

Our former solution provider was not independent; they were a supplier of parts. It's not the best thing to have a supplier be your MRO outsourcing provider. With SDI, we have a truly independent sourcing agent looking after our best interests.

SDI at Work

In the third post in this series on MRO As-a-Service by Spend Matters, Pierre Mitchell and Michael Lamoureux talk about how managing MRO as a process delivers benefits from efficiency to effectiveness and beyond to an evolutionary phase. The next generation of value, MRO-as-a-Service, helps organizations build intelligent, agile, scalable and integrated supply chains (direct and indirect).

The project team has worked its way through Define, Measure, Analyze, and Improve. It’s time to begin the Control phase. The key stakeholders gather to evaluate the solution as implemented and create a plan to sustain the improvements. The goal is to standardize the improved processes, establish an audit schedule and schedule periodic follow-up to identify additional opportunities for improvement.