Posted by Jerome Blanc on Wed, 01/31/2018
While AmazonBusiness is changing the game for procurement with Business Prime, the supply chain extends beyond your loading dock door to the plant floor…and everything in between. The reliability of your production lines, facilities and schools is only as good as the supply chain that supports it. When I asked my team of MRO Technical Services professionals and engineers what they thought of AmazonBusiness in the industrial supply space, I received the same reactions across the board. Amazon is huge. They provide excellent supply chain reliability up to the loading dock door, but what about once the materials get inside? Yes. Amazon could definitely benefit from having an inside partner to provide technical support and ensure the reliability of the MRO supply chain.
First, there was concern about providing technical support and engineers. Being purely an online marketplace, could Amazon provide the resources to go out to your facility or production plant to troubleshoot any issues that you may be having with an item that you already put into your production lines? They would benefit from having full details on the materials they supply. Having a partner inside, who has relationships with product representatives and OEMs (original equipment manufacturers) can help supplement knowledge and provide instant expert advice. This helps ensure that the correct equipment arrives with no issues to slow down the supply chain.
For example, our MRO Technical Service professionals routinely use 3-D modeling to help redesign equipment to better work within the realities of a customer’s production line. Additionally, if parts needed have not previously been ordered (and thus not identified previously), there could also be delays in the delivery and receiving of the materials needed. Having a partner inside, helping you to:
- update and maintain your Bill of Materials
- identify critical assets
- maintain an asset register
would help minimize those types of delays. An inventory of critical parts really should be managed on site. Even a few hours of difference can have a tremendous impact on downtime costs.
Additionally, some of these facilities are using the same equipment from when the plants were built 60+ years ago. But with technology shifting so rapidly, some of the parts they need to keep their plants running are obsolete. MRO technical service professionals can reverse engineer these parts so they can be manufactured.
Another thought was around the industrial supplies themselves. Amazon may be able to provide top tier MRO items like bearings, motors, belts, roller chains, etc. And while the materials may match your specifications, what if you need to know how old they are? How have they been stored? Some items require special storage that only professional power transmission suppliers could provide, for example. If bearings are warehoused improperly, they could be dead on arrival. Having an inside partner to maintain the reliability of this part of the supply chain could help alleviate some of these concerns.
What about parts that can be repaired? Typically, high-cost industrial parts are repaired 2-5 times before they are retired. And most maintenance shops send out these repairs to specialized repair houses. The reliability of this component of the supply chain depends on a repair tracking system to ensure that parts that have gone beyond their life expectancy are properly retired and items that can still be used get back into inventory after being repaired.
Of course, Amazon could perform reliability checks to help keep their customers’ supply chains running smoothly. They would simply need data about:
- what their customers typically purchase
- what is standardly available
- what is made to order
- what has slight modifications made to them after receipt
It would be easy enough for a giant like Amazon to make sure that those items were categorized as such and tracked to ensure that inventories of the higher moving parts were always available on Prime. They could very easily perform quality checks on items ordered to ensure that they are the right materials. And they could work with repair houses to provide repairs as a service, although it may not fit in the Prime business model.
AmazonBusiness is one point in the supply chain – a major point even if not the whole picture…yet. While they may make the procurement process quicker and easier, the procurement process is only one part of a reliable supply chain. As Amazon expands beyond its traditional model, it will be interesting to see if they partner closer with companies that are specifically geared towards industrial solutions, top tier equipment suppliers, and technical service providers.