Maintenance, Repair and Operations has historically been considered non-core – a way to control piece-price costs in the realm of high-volume, low-value purchases. While the meaning of MRO hasn’t changed, its scope and impact on the supply chains that support facilities and plants is becoming a distinguishing factor of competitive advantage, even survival. There’s a much bigger picture at stake here and it may be the missing link needed to create flexibility and resiliency in your indirect supply chain in what some analysts are calling the “age of disruption”.
Disruption and market unpredictability have become front of mind and the economic supply chain effects resulting from the pandemic may ripple through this decade being the defining stigma recorded in the anals of history. Isn’t it shocking that everyone, everywhere, in nearly every industrial sector was so unprepared? Most organizations experienced their own unique challenges but now facility leaders are struggling with more common and controllable issues including:
- Uncontrolled growth of spend and supply base
- Maverick spend and non-compliance
- Unplanned equipment downtime
- Working capital tied up in obsolete or unnecessary inventory
- Stock-out of mission-critical parts
- Lack of actionable data and spend visibility
- High freight costs
- Loss of maintenance labor productivity
- Frustrated stakeholders
- Employee burnout
THEN WHY COULDN’T MANUFACTURERS AND INDUSTRIAL ORGANIZATIONS KEEP UP, ANTICIPATE, OR PIVOT STRATEGY TO MINIMIZE DAMAGE, CONTROL COSTS AND ENSURE CRITICAL SUPPLY?
You can’t fix, improve or enhance what you can’t see. Overwhelmed by the crises and frustrated by a series of disruptions; strategic leaders were paralyzed not knowing what to prioritize and were backed into a corner to fire fight challenges one day at a time. They had data but the quality was poor, unactionable, and buried in a few dozen spreadsheets in a best case scenario. They were left to guess what parts and materials they needed and in the cases when they knew the what and where; there was still the issue of from which supplier and for how much, with no real clarity on when it would actually arrive. Facility managers, maintenance supervisors and procurement leaders have always understood in theory why good data is important but the pandemic gave us all a reality check that showed how far away in practice the industrial side actually is. The need for industrial MRO services and technology has never been greater as organizations determine where they stand on supply chain resilience and flexibility in preparations for the next great disruption. At SDI we have identified three benefits that MRO services and technology that can help support and even fix supply chain related issues, providing immediate relief by improving processes to enhance efficiency while still providing a return on investment.
#1 – Improve the quality of the data that you collect and act on
Uncertainty will always be hiding within the supply chain … there’s no doubt about it. Invest in technology that can collect data on usage and condition monitoring. Know what you have and catalog where it is. Compile, spend data on parts and supplies and leverage your buying power. Once you have good data, that is formatted well and simple to interpret, the action items and top priorities crystalize before your eyes.
How does SDI help you do it?
No one can remain competitive at producing goods and services if the facility isn’t in top condition and/or production lines fail unexpectedly. For this reason SDI’s Data Capture and Master Data Management is a MRO service that can kick start any supply chain enhancement program. We began with the industrial manufacturer in mind but the service has grown to be used by educational institutions, multi site retailers, energy companies, and manufacturers of all kinds. Every year we expand the service to new industries because the value of quality MRO data has a cross functional benefit to your entire organization.
Here’s how it works: A team of SDI experts collects your data and establishes a baseline on all SKUs in the storeroom, enabling visibility into usage and purchase trends and allowing you to more effectively leverage your MRO spend. After that, we establish processes for new adds, so your data stays clean. When you’re ready to use the data to inform strategy; initiate ZEUS Data Analytics for full visibility into spend data to quickly identify low-hanging fruit, for quick wins. The technology also helps you build a WAVE strategy for long-term, sustainable savings. Data analytics and inventory forecasting helps drive strategies and priorities in procurement, while ensuring continuity of supply, with an average savings of 10-15%. Our SME’s even bring to light those “aha moments” and show you where the biggest risks are in your supply base and what you can do to immediate reduce costs while enhancing overall flexibility.
#2 – Reexamine your inventory optimization and asset management strategy. Automate whenever possible to reduce time and cost, while safely increasing operational cash flow by extending the life of the parts you already have.
We used to live in a world where just in time was just right. Every situation and organization is different and supply partners are unique. It’s true that there are benefits to being lean when it comes to storing and housing materials. However, it comes at the risk of being caught “out of position” when disruption does occur. What makes today’s supply chain crises so unique is that completely different industries (which never affected each other before) are now competing for raw goods and materials, causing demand to fluctuate in an unprecedented and unpredictable manner. Operational leaders must prioritize the right safety stock and critical spares on revenue generating assets and may even need to consider sourcing alternatives and unconventional methods like 3D printing and component refurbishment for extreme situations when the OEM fails to deliver.
How does SDI help you do it?
We make sure you have the right part, at the right time, in the right place, at the right price by using SDI’s Intelligent Inventory. This service leverages technology, automated processes and inventory management best practices to optimize MRO spares and consumables, increasing your production reliability and decreasing downtime. Every inventory strategy is subject to market conditions and that’s why we developed RPM, for when the stock outs and shortages are unavoidable. RPM Repair/Reliability/Reusability Process Management is a specialty asset (component-level refurbishment) program that moves beyond simply managing the repair logistics of your production parts to integrating a process into your overall reliability program. All in an effort to increase uptime, improve asset reliability, reduce costs, and decrease carbon footprints through the repair and reuse of asset components. This makes you far less dependant of OEM’s and suppliers in your supply chain network.
#3 – Consider your employees as a critical component of your supply chain. By making their work easier you become stronger and more resilient.
The great resignation at its core shows us that the way we work isn’t working. At work people are employees but when off the clock they are consumers. Why does the experience of using technology at work not match the ease and comfort of the experience at home? Organizations must embrace the digital revolution and make the workplace match the times that we live in. Incorporate mobile app technology into the work flow and open the door numerous benefits for your employees so they can work smarter and faster and not harder.
How does SDI help you do it?
Leverage SDI’s buying power to get the best prices with ZEUS eProcurement, an online marketplace of hundreds of thousands of tail-spend and MRO items. Your field and plant technicians can directly contact our North American headquarters location if you prefer a more personal touch. Whether through the online system, via text or phone call; manage it all, with a single point of contact from an app in the palm of your hand. With SDI Sourcing As-a-Service we build customly sourced catalogs and use API’s to integrate with your current systems so our category experts, market intelligence and strong supply chain partnerships unlock more spend and increase savings potential. This takes the guesswork away from your procurement professionals so they are given trustworthy and approved sources in one place. By leveraging our buying power we can ensure continual supply even in times of crises, insulating you from the risk and taking the pressure off of your workers to check for availability. With 50+ years of MRO procurement and SDI P2P As-a-Service, SDI’s structure and compliance model ensures the strategy set up by sourcing is the one implemented throughout the source-to-pay process. Managers can rest easy knowing that purchases are being made from the right provider at the contracted price. By strategically managing tail spend through a more seamless and connected process, clients can realize savings of 15% or more and say goodbye to rogue spending.
TIMES HAVE CHANGED AND THE INDUSTRIAL SECTOR IS MORE VULNERABLE TO SUPPLY CHAIN RISKS, BUT SDI IS HERE TO HELP.
SDI is The Digital Supply Chain Company and exclusively offers services and technology built to enhance the performance of an organization’s maintenance, repair and operations activities. We are a solutions and services company. We don’t sell parts and materials, rather we help our customers manage and optimize their supply chains so they buy smarter and get better outcomes with regard to their maintenance perspective. The current supply chain crises and continuous disruptions have created an alarm and we are seeing more organizations trying to get a handle on their parts, and the systems that manage them seeking for a way that mitigate risk before disruption happens.
Our approach is less about the parts themselves as it focuses on the connectivity of an organization’s supply chain. What amazes people is that by adding value adding practices and technology to the MRO Supply Chain, other things fall into place and as a result the cost of parts drops dramatically.
Give us a call and let us know what your challenges are. We are here for you!