Manufacturing firms in 2016 continued to emphasize better management of their maintenance, repair, and operations, in the quest for greater control, visibility, and efficiency. Three important trends emerged during the year to transform MRO management from a necessary evil to a strategic opportunity in many companies.
More and more firms, intent on devoting their in-house management, labor, and strategic resources to value-adding activities, are outsourcing the MRO tasks. By entrusting third-party experts to manage ordering, tracking, and paying for supplies and parts, companies enjoy the benefits of centralization including:
- Standardizing taxonomies
- Eliminating duplication
- Lowering carrying costs
- Increasing uptime
- Reducing shipping charges
Outsourcing these functions to an experience MRO service provider gives manufacturing companies a system that not only cleanses data and keeps it clean, but also uses that information to drive decisions, reducing costs and keeping machinery humming along. For instance, SDI’s procurement and storeroom solutions harness data to predict and report usage, determine reorder points, and synchronize all supply chain components. These functions help create value all along the way so companies can take advantage of new market opportunities, capitalize on expansion windows, and realize economies of scale. This change in company dynamic also frees up time and resources for employees so they are not bogged down by MRO management tasks and can better focus on the many other areas within their daily responsibilities.
Slow, imprecise, and prone to error, labor-intensive, paper-based ordering and payment systems are notoriously hard to manage. Many transactions are non-contractual, leading to higher and unpredictable prices. They often are decentralized, increasing the potential for over-ordering. Companies that invest in eCommerce solutions or partner with third-party providers that have developed eCommerce expertise can optimize the process, minimizing input errors that take time to reconcile and avoiding late payment costs.
SDI’s customized, out-of-the-box eMarket system comes complete with punch-out capabilities, order tracking, approval confirmation workflow, and searchability by an extensive set of parameters. eMarket gives customers access to millions of items from thousands of suppliers. Our expertise not only streamlines the process, but also ensures our clients receive the most competitive prices and extensive support. We pride ourselves on delivering:
- Efficiencies and economies of scale resulting in cost savings
- Broad knowledge of tail spend with deep expertise in MRO
- Breadth of supplier and vendor knowledge and relationships
- Parts tracking, recordkeeping, and reporting on which to base buying and stocking decisions
While the costs associated with MRO may be minor when compared to direct materials, it plays a major role in a business’s success. It has an impact on how the planners scheduling maintenance to keeping downtime short. A successfully managed MRO supply chain helps ensure critical, long lead-time components are always on hand. In addition to reducing redundant inventory and reducing the associated carrying costs, freeing up working capital, the MRO supply chain can also have an effect on manufacturers’ workflow, marketing activities, scheduling, and other mission-critical operations that rely on effective MRO procurement and warehousing.
Over the past year, companies have continued to integrate their MRO processes into a comprehensive asset-reliability strategy. This holistic approach ensures that MRO receives the attention it deserves, either in-house, or by outsourcing indirect supply chain functions.
SDI’s Reliability-Centered MRO incorporates management of both supply and demand to keep the lines moving. Collecting and analyzing carefully parsed data, we can create an individualized program to promote storeroom and procurement operations.
From there, we implement SDI’s Asset Life Optimization procedure, using proprietary methods developed by our experienced reliability engineers and supply chain professionals to improve communication and logistics between MRO and engineering, maintenance planning, finance, workflow mapping, quality control, and other departments it influences.
CONTINUING THESE TRENDS INTO 2017
In 2016, MRO continued to emerge as an integral component in manufacturing firms’ production efficiency and asset reliability. Our technology and expertise help customers streamline their indirect supply chain operations and stop wasting effort, time, and money. Contact us today to schedule an analysis of your MRO supply chain and advice on how we can help make your operation more efficient.