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Strategies for Managing MRO Supply Chain

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MRO supply chain

It cannot be easy to manage MRO (maintenance, repair, and operations) supply chain. Many people don’t realize that the process can be complicated because of all the departments involved. Those departments, including finance, maintenance, engineering, and purchasing, have competing interests. That’s the reason bridging the gap is an acceptable and necessary strategy to manage your MRO process.

All of the departments mentioned above are working towards the common goal: to sustain a profitable company. Stress can be caused by how these departments manage this process and their individual goals often tied to performance.

Think about the impact that a single department’s decision can have on the supply chain. Let’s say the purchasing department decides that a lower-priced part is best. This will impact MRO maintenance as the less expensive part will need to be replaced more often. This increases maintenance costs, but it can also decrease purchasing costs.

Cross-departmental coordination will be required for an MRO supply chain to be effective and produces the best results. Efficiency cannot be achieved without effective collaboration between all departments. This includes maintenance planning and scheduling and procurement activities, inventory management, and field maintenance execution. 

Inventory Management.

The warehouse is often seen as a ‘holding area’ that must react quickly to any problems upstream or downstream. The inventory management department plays a crucial role in streamlining the MRO process. The department can identify and eliminate waste that results from poor coordination among departments. They can have regular audits of inventory levels and feedback loops when items are not used for work orders.

Define Critical Operations.

First, a company must understand the components and maintenance that are essential for smooth production. It must then prepare a list listing the most critical items and their frequency of use. It must then prepare a replenishment schedule to ensure that there are never shortages of critical components.

Keep Up with Compliance.

MRO upgrades improve customer service stability, increase safety for operators and technicians, and prevent costly violations by regulatory bodies. A recent survey found that half of all businesses have shifted their focus to MRO to at least some extent to comply with current standards and prepare for the next.

Streamlining The Distribution of MRO Supply Chains.

These businesses can simplify procurement by consolidating suppliers that supply raw materials to process industries and prefabricated parts to manufacturers for assembly. MRO could also be simplified, especially if you consider the special equipment and spare parts required for advanced maintenance. Although it might not be as simple to reform MRO sourcing supplier-by-supplier as standard supply procurement, businesses may be able to benefit from dividing their budgets more evenly.

Buy Strategically.

Different departments may use the same MRO item. This could be because they are not communicating with each other. Therefore, they should order the parts separately. A company should have an inventory management system that allows MRO to help them check the availability of all items. The system will also help companies know their total demand for items and negotiate better with suppliers. This will make it possible to avoid frequent ordering.

Maintenance Planning and Scheduling.

This process begins upstream in the scheduling and planning department. Inefficiencies can easily compromise the entire MRO supply chain. It is important to have a reliable preventative maintenance plan in place. Proper planning and execution can reduce the amount of material and labor required for PM-related work. 

The corrective maintenance program should be managed by the planning and scheduling department. This department should create a consistent schedule that is communicated to all departments in advance. They should also provide live updates about work orders delays and emergency work orders submissions. For root cause analysis and continuous improvement, strong oversight of schedule deviations is essential. KPI visibility should be provided on schedule attainment.

Maintenance Execution.

Poor planning can lead to low productivity in MRO supply chains. Management must set up recurring KPI reviews and manual trackers to record and get data points, such as the incorrect supply rate for high-priority work orders or incomplete preparations. To understand the MRO supply chain gaps, it is crucial to accurately track the inefficiencies that resulted in the end.

MRO Procurement.

This is where the focus is on reducing overall spending while improving vendor responsiveness, product supply, and vendor responsiveness. Many companies are too dependent on many vendors, instead of focusing their attention on key suppliers that can offer quick and accurate lead time at the lowest price with optimal contract terms such as longer payment terms, warranty terms, etc. 

A proper replenishment process is essential for stock items. Many companies rely heavily on their inventory management systems to manage their data, but they do not have an ongoing audit process to verify accuracy. Incorrect lead times, safety stock levels, or re-order points can result in inaccurate replenishment volumes. This will cause an increase in inventory that is slow to move, stock-outs of critical items, and an increase in direct purchases.

Final Words.

A key part of maintaining a competitive advantage in an asset-intensive sector is streamlining the MRO supply chain. It involves ensuring that company assets perform at their best by managing spare parts, materials, and chemicals. Improvements in the MRO supply chain can have many benefits, including lower procurement costs, reduced inventory levels, increased material availability, and decreased asset downtime.

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