E-commerce has brought great advancements to management of the maintenance, repair, and operations supply chain. From cost control and spend management to aggregation of strategic insights and workflow transparency, the ability to procure spare parts, maintenance materials, and consumables through online platforms has streamlined and optimized many purchasing functions. The other components of MRO logistics, however, have experienced a few growing pains as e-commerce companies struggle to replicate many of the services that brick-and-mortar locations performed so well. Among these are the “last yard” supply services. E-commerce firms are great at getting shipments from their distribution center to your shipping dock, but that’s where their commitment ends.
The last yard is all about what happens from the MRO supplies and spare parts being delivered to their actual use. This includes:
- Receiving and inventorying
- Warehousing and staging
- Kitting and issuing
- Delivering and more
Addressing the gap
Gaps in the performance of these duties have given rise to third-party logistics (3PL) services and supply chain-as-a-service providers. Serving as conduits between MRO wholesalers and their manufacturing firm customers, these vendors work at the local level, adding value by getting products where they need to be when then need to get there. With MRO logistics often incorporating hundreds of suppliers and thousands of SKUs, 3PL firms act as much more than traffic cops. They can:
- Break bulk shipments
- Kit out and pre-assemble machine components
- Eliminate shrinkage
- Exercise control and visibility of critical spares and other inventory
The newest MRO logistics trends
As 2020 dawns, it is shaping up as a watershed year in MRO logistics, with service providers helping suppliers and manufacturers get fill and manage more orders than ever. We are seeing 3PL vendors’ service scopes expanding to a variety of offerings:
- Picking and Packing – Some MRO logistics providers have carved a niche at the head of the supply chain, working on-site in supplier warehouses to handle order fulfillment. As sellers adopt multi-channel distribution, they need partner firms that can pick items from warehouse shelves, pack orders, document quantities, and direct shipments to customer sites quickly, accurately, and damage-free.
- Receiving – If you are like many, your receiving dock resembles Grand Central Station during rush hour. The volume of deliveries is massive, and confusion can reign without proper controls and workflow. Local MRO logistics partners can work on-site at central parts repositories to ensure each delivery is properly inspected and documented. From there, these professionals can take responsibility for informing maintenance and production managers that replacements have been received and transporting lots to warehousing and scheduled maintenance staging areas.
- Inventory Management – Opting to work with a dedicated team of material managers at your warehouse allows you to focus management attention and labor on more strategic tasks. Third-party inventory management providers have access to pre-built software and procedural infrastructure that they can leverage for your firm. Their productivity and ability to expedite inventory processes can often create savings and increased revenue that more than covers their fees. Experts in this field will be able to evaluate your current spare parts needs, usage, and inventory churn to determine which SKUs are critical enough to be kept on hand, which are obsolete and can be discarded, and which can be obtained easily and painlessly enough without clogging the storeroom with surpluses.
- Kitting – Putting all the parts, wires, tools, lubricants, nuts, and bolts needed to perform a specific repair or replacement can increase machine uptime exponentially. Building these repair and maintenance kits can be done at the supplier’s, distributor’s or customer’s facility. Outsourcing the kitting of all the pieces and even preassembling components to an MRO logistics partner not only saves your maintenance team the time it takes to pick the parts they need, but also saves time during the repair process itself. Kitting also puts extra sets of eyes on inventory to guard against stockouts. Manufacturers should choose a provider that guarantees quality by including everything a technician needs to complete the maintenance or repair project and nothing more. Top kitting teams will incorporate your company’s taxonomy, labeling, and logging parts as they are incorporated into kits and as the kits themselves are used.
- Vending – The ultimate in last yard fulfillment, vending machines ensure line workers and maintenance techs can access the consumables, protective equipment, and supplies they need near their work locations. Vending machines offer the added benefit of tracking material use by individual, department, and project, lending important insights into productivity and efficiency and inventory control. Vending machine vendors may offer to manage inventory for you, monitoring machine inventory and restocking as necessary. Or you can buy or rent the machines and fill them with the materials from suppliers of your choice, using staff resources or outsourcing to an MRO logistics provider to keep them stocked with the items you need daily.
SDI has the technology and experience to overhaul your entire MRO logistics program
SDI has developed a full suite of services to help deliver over the last yard. Our integrated software platforms and industry insiders combine to interface with your overall MRO logistics and supply chain. Our ZEUS platform puts you in control of your entire MRO workflow. It not only simplifies last yard activities with storeroom and inventory management technologies, it manages your entire e-procurement universe, bringing maverick spend under control and delivering actionable insights that generate significant cost savings. Contact us, and let’s discuss our holistic approach to MRO, from assessing your needs to streamlining receiving inventory and last yard deliveries.