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The Evolution of MRO: From Integrated Supply to Supply-Chain-as-a-Service.

MRO Integrated Supply is not some strange, new age idea. In fact, this concept has existed for over forty years. Despite some initial criticisms, Integrated Supply has been hailed as the “next best thing”. But it is truly an evolution, and the future is moving beyond integrated supply to a more flexible, adaptive and progressive supply-chain-as-a-service model. To understand why companies are finding diminishing returns from the old lift-and-shift labor arbitrage model and looking for new and innovative ways to manage their supply chain, perhaps it is best to explain the evolution of Integrated Supply, compare it to the supply-chain-as-a-service model and then explore where this concept will take businesses in the future.
 

Traditional Definition of Integrated Supply (distributor and non-distributor): 

Traditionally speaking, Integrated Supply simplifies purchasing and inventory practices by consolidating a company’s supply base through a single source solution. This allows a company to spend more time focusing on core business activities and produce more efficient results.
 
One particularly effective method of doing this involves outsourcing non-core business activities, such as:

  • Procurement
  • Receiving and Issuing
  • Inventory Management

 
While, traditional Integrated Supply eliminated several of the steps that the segmented supply model included in its chain of distribution, there were still missing links in the supply chain that would enable manufacturers to identify and correct redundancies.
 

A Modern Perspective: MRO Supply-Chain-as-a-Service

Disruptive innovation, compressed product life cycles, intense global competition and changing consumer expectations are forcing manufacturers to focus on enterprise asset management and reliability more closely. As manufacturers and their business practices evolve, the concept of MRO Integrated Supply has evolved so manufacturers can focus intensely on their core competencies and rely on third parties to manage their non-core functions.  Similar to business process outsourcing models that have proven to be highly effective over the years, MRO has evolved into supply-chain-as-a-service or Enterprise MRO©, which takes the needs of the entire organization into account and provides an end-to-end solution. With rapid changes in technology and business development, it is easy for companies to get caught in a myriad of outdated systems that need to be simplified and corrected to function successfully. This is where Enterprise MRO© comes into play.
 
Now, Enterprise MRO© encompasses the end-to-end MRO supply chain to improve business productivity that can benefit asset-intensive manufacturers that are focused on driving productivity and efficiency through reliability. These components include:

  • Master data management
  • Simplifying the Procure to Pay process for MRO supplies
  • Streamlining and improving inventory practices
  • Upgrading talent to include skilled warehousing and supply chain professionals
  • Introducing engineering initiatives to improve the reliability of production assets
  • Continuing to drive advancements in technology from on-premise systems to platform as a service (PaaS) and software as a service solutions (SaaS) 

 

The Future starts today:

One question still remains: what role will the MRO supply chain play in the future of manufacturing? Industry is already rapidly moving towards the as-a-service model, a plug-and-play model where enterprises can augment their business with a service experience that delivers consistent value. What’s enabling this as-a-service model? It’s advances in cloud-based, specialized supply chain technology. It’s service providers prioritizing their investments in the people, processes and technologies to make supply chain as-a-service a reality. It’s change leaders working to remove complexities, improve processes and automate for more predictive and proactive production domains. 
 
Future developments will provide more opportunities to increase efficiency in manufacturing and speed to value, such as:

  • 3D scanning and printing for prototyping of re-engineered OEM parts and on-demand printing of critical spares or tooling
  • The industrial internet of things and further innovations in RFID-enabled tool cribs and point-of-use vending
  • Advances in machine learning applied to condition monitoring for more intelligent operations
  • Robotic process automation to boost capabilities and save time in highly-transactional process functions

 
With the future of MRO Integrated Supply and MRO Supply Chain as-a-Service, it is clear that supply chain providers will only become more efficient, save more time and money, and become a cutting-edge presence in manufacturing. By continuing provide transformative performance through MRO supply-chain-as-a-service, turning data into useful information, and introducing a variety of innovations, Enterprise MRO© is indeed the supply chain management model of the future and will carry supply chain management through the rest of the 21st Century and beyond.
 
Covering multiple industries with an established presence and masterful knowledge in MRO Integrated Supply, SDI will carry your company into the future. To find out how to get started with an Enterprise MRO solution, contact us today!

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.