MRO as a Steward of the Supply Chain

Source: https://unsplash.com/photos/sczNLg6rrhQ

COVID-19 created supply chain challenges that few foresaw. Across the globe, supply chains have been disrupted, suppliers have gone out of business, and stocks of critical parts have been limited due to the pandemic's impact.

Nonetheless, continuity planning has barely increased in importance from last year.

Thankfully, companies can find solutions by empowering their procurement and supply chain departments. Through the right investments, leaders in these areas can ensure business continuity, even in the face of disruptions.

Here's why maintenance, repair, and operations (MRO) procurement must become the new steward of the supply chain.

Lack of Action Leads to Operational Shutdowns

Companies that don't have what they need to keep their operations running will risk will risk equipment shutdowns for a longer period than expected. Typically, what they need are spare parts and materials, the availability of maintenance crews, and predictive diagnostic capabilities that can help them plan for machine repairs in advance.

The auto industry is one area that has seen significant disruption to operations due to parts and repair shortages.

According to Cars.com, COVID-19-related challenges led to a domino effect that impacted the availability of new and used cars on the market. The next domino to fall was in the vehicle maintenance due to the scarcity of parts.

"Repair facilities — whether dealerships or independently owned — have struggled in acquiring parts," said David Bennett, repair systems manager at AAA. "Due to the shortage of new and used vehicles, many consumers are opting to keep their vehicles longer, and as a result, repair facilities are seeing an increase in business."

Although the disruptions caused by the pandemic weren't foreseeable, they revealed long-standing issues in industries' supply chains. Even brief inventory shortages can lead to pent-up demand. This causes procurement and supply chain professionals to spend valuable time playing catch-up went they could be implementing new strategies to predict failure and secure their supply networks.

MRO's Role in Supply Chain Stability

This is precisely why MRO procurement must act as a steward of the supply chain. MRO procurement can identify critical parts, ensure the organization has the right spares, and even predict breakdowns and maintenance requirements before they occur.

Businesses can no longer afford to run their machines for long periods while relying on lean maintenance teams and manual processes. To secure operations and maintenance in the face of disruptions, companies must make strategic investments into MRO, including in new technologies.

AI and Predictive Analytics Reduce Supply Chain Risk

By utilizing AI and predictive analytics, MRO procurement professionals can anticipate when the company will need spare parts, components, and materials. The function can then order these assets in advance, so they are readily available when maintenance is required. When implemented across the company, this can help operations avoid any prolonged shutdowns.

MRO's predictive capabilities can even prevent supply chain crunches when parts and materials are needed most. Because parts and materials are being ordered in advance, there are more opportunities for the procurement department to function if they can't acquire what they need from a given supplier.

Scaling this type of process can be challenging, but many companies are already adopting AI and predictive maintenance as core parts of their procurement processes.

"Even before the pandemic, inventory overstock and understock contributed to millions of lost dollars every year—a lack of real-time inventory visibility played a pivotal role in these issues," says Forbes. "When you sync real-time data with AI, you can optimize your inventory management beyond simple reordering."

Don't Miss the ProcureCon MRO Conference

MRO procurement must act as a steward of the supply chain to secure operations and maintenance during times of disruptions. By utilizing AI and predictive analytics, MRO professionals can anticipate when the company will need spare parts, components, and materials.

The function can then order these assets in advance, so they are readily available when maintenance is required.

To learn more about MRO's role in the supply chain, don't miss ProcureCon MRO 2022, happening from October 17th to 18th at the Hyatt Regency in Atlanta, Georgia.

Download the agenda today.