Impact of Digital Supply Chain on MRO Spares Management

Impact of Digital Supply Chain on MRO Spares Management

Maintenance Repair Overhaul (MRO) spares management has struggled due to high level of inefficiencies and typically is characterized by fragmented decisions made by multiple individuals who represent multiple sites and business units. None of the parties involved has a full view of the MRO value chain, resulting in management practices that are well intended, but sub-optimal. They manage MRO independently, with little communication among them, and rely on data collected and stored in independent legacy systems, without the benefits of any strategies for process governance or unified data maintenance.Also, MRO spares management is traditionally viewed as part of the overall indirect spend category—which includes items such as critical spares, personal protective equipment and consumables. Hence, this is looked as just a spend category and not as a well-defined supply chain process which drives critical business

These inefficiencies are directly impacting :

1) Uptime of machines leading to productivity of plant and labour
2) Procurement costs relating to emergency buys at non-negotiated rates
3) Customer satisfaction arising from delayed deliveries

Importantly, MRO spare parts can represent up to 20% of the total enterprise spend and account for more than half of all indirect purchasing transactions.

If addressed as an integrated business process, MRO spares management represents a significant opportunity for companies of all sizes. With the value of supply chain management undeniably proven in direct materials and finished goods arena, MRO spares management is going through the transformation. “Sourcensave is the new mantra for procurement leads – right sourcing, supply chain practices enabled by technology.

Over the last few years, there has been a significant shift in mindset.Companies have been focused on improving effectiveness and efficiency. Enterprises have undergone initiatives in Business Process Re-Engineering, Lean Six Sigma focused on eliminating waste and creating value through process transformation.  For MRO spares management, it’s about transforming a fragmented, decentralized set of activities and processes into a single, integrated mission-critical, core enabling business process.

Market leading digital technologies and newer digital disruptions are fuelling the speed of this transformation journey for companies. E procurement, B2B Marketplace, Connected Devices, Auto-Replenishment, Predictive Maintenance, 3D Printing are a few digital disruptions companies are leveraging today.

Research across industries has proven that savings generated and efficiency achieved is significant for companies leveraging this new age digital solutions.

3D printing or additive printing was technology traditionally used for prototyping. However this technology is transforming the way spares parts, one time buys, MRO items are printed on-site reducing a lot of inventory and carrying costs, repair times, service levels. Using a 3D image pattern, layers of metal fusing are built together by laser to manufacture a finished part. GE, Siemens are leading this space with 3D printing of aerospace MROs. Hi-Tech, Auto companies are following suit to gain benefits.

2. Predictive Maintenance and proactive management of spares requirement is another leading practice employed by small and big enterprises. Use of data from machines, connected devices combined with the power of analytical techniques can generate alerts on potential machine/equipment failures in advance to take necessary preventive maintenance activities. Advance analytical techniques like Machine Learning, Artificial Intelligence is making predictions more accurate. Spares demand is generated ahead of requirement which ensures right part, right place and right cost.

3. B2B eCommerce Marketplace is enabling companies to focus on core practices and leverage sourcing partners to unlock the potential of large vendor base and shared inventory concepts. Traditional practices of large inventory, big sourcing team, vendor management challenges is the thing of the past with B2B Marketplace players. E-procurement with B2B Marketplace provides huge advantage of large vendor base, best costs, highest quality of spares and delivery at door step.

Procurement executives and business leaders are constantly seeking a catalyst to propel their operations into this changing digital world by partnering with service providers who have end-to-end capabilities. Viewing Digital MRO Spares Management as a core enabling business process, rather than a cost of doing business, will empower leaders to drive the necessary change to reduce cost, balance risk and increase value. MRO is part of the supply chain ecosystem that provides a collaborative learning environment, allowing enterprises to plug into the latest thinking and emerging technology to transform the conversation from cost to value. Progressive companies will not hesitate to become a part of this type of collaboration to integrate this business process into their operations and transform their cost-focused businesses into value-driven businesses.

Sourcensave”, is a B2B e-Commerce company, based out of Bengaluru, catering to the manufacturing and process industries. We are the one stop online shop for all MRO (Maintenance, Repair & Operations) and branded Industrial Products. Our focus is to simplify the procurement and supply chain processes for indirect material, yet, at the same time assist our customers to realize the benefits of best price and outstanding service and quality