4 Ways You Could Be Obstructing Your MRO Process
Organizations tend to focus their procurement optimization efforts on direct materials required for finished good inventory production or cash flow. This means that areas like MRO often go unnoticed, eating away at your profit and leaving your supply chain operations open to risk.
Maintenance, Repair, and Operations (MRO) costs are regularly viewed as a necessary function for maintaining asset production, despite their potential for driving real savings opportunities while protecting manufacturers from common interruptions like machine downtime.
Optimizing MRO processes can be difficult and seemingly hyper-complex as obtaining the day-to-day items and spare parts can mean relying on several suppliers. However, recent advancements in technology present effective solutions to these commonly held problems.
Purpose-built MRO management solutions powered by AI-enabled software have been shown to cut MRO costs, reduce suppliers, free up capital, and mitigate risks. Common standard practices will often obstruct MRO optimization in favor of need-based procurement, which will hinder cost savings down the line.
Not tracking MRO procurement and use
The absence of standard performance measures will prohibit MRO optimization as there is no measurement by which to compare improvement. Indicators like production rate, downtime reduction, or MRO cost savings must be tracked if you are to make evidence-based improvements to MRO processes.
Harmonizing inventory data is the backbone of an efficient MRO process. Not only can it help anticipate periods of downtime or stockouts, but in conjunction with AI-driven technology, it can help companies plan inventory needs accordingly to prevent unscheduled production stoppages.
Access to real-time data also makes the administrative side of MRO procurement significantly simpler. While standard procedures like accurate item labeling and efficient item search capabilities are benefits of tracking MRO acquisition and use, disparate systems and outdated manual processes often makes this difficult to achieve.
Luckily, tools using natural langugage processing models to glean insights from your data can identify duplicate materials, insufficient min/max levels, usage patterns and more to assist in predicting future MRO inventory needs. Though demand is often irregular, analytics can find variations in pricing and miscalculated lead times, as well as provide resources for the comparison of purchasing metrics to optimize costs.
To ensure supply chain efficiency, manufacturers should embrace an MRO inventory strategy that combines purpose-built MRO technology with the seasoned expertise of their internal team members.
Lacking an MRO-optimized environment
With more information on hand, it is critical to impart this knowledge to your employees. Regular training that enforces new and improved operating procedures will allow them to make the most informed decisions.
This attitude should remain the same when setting up the storeroom. The physical layout of product upkeep can facilitate a streamlined MRO process.
Neat, well-organized spaces significantly reduce the amount of time and effort that goes into everyday MRO processes. When the amount of spare part SKUs increases with growth, an advanced search capability for item locale and retrieval can make all the difference.
Research has shown that 6-10% of a company’s overall spend flows through the MRO storeroom. Moreover, the administrative aspects of tracking purchase orders, invoicing, and vendor discounts can account for a large majority of organization transaction activity; thus, wasting resources and time which could be better spent on direct consumer-facing services.
It should be noted that manual human-led errors – such as dropping items, breaking machines, or inaccurate counting – account for a large portion of wasted MRO spend. Competently organized storerooms can prevent these simple mistakes from occurring.
Missing critical MRO technologies
Taking the time to build a high-performance and data-driven MRO procurement strategy will streamline previously sluggish and purely responsive policies. To help you with this renovation, your company needs the technology and tools that a next generation MRO inventory management software provides.
Purpose-built tools for MRO are available to help inventory managers optimize both procurement and management processes. Integrating machine learning into your company’s tech stack can catalyze improved and prompt decision-making so you aren’t wasting your time with unnecessary purchases and unplanned system failures.
The use of AI for MRO inventory optimization gives your organization an easy way to manage costs, ensure asset uptime, collaborate with suppliers, and a variety of other metrics while removing the manual processes of tracking inventory. Purpose-built MRO inventory solutions help you to understand the flaws in your MRO data management so you can unlock the hidden value that MRO provides.
These novel systems are designed to analyze, manage, and track maintenance and operations activity so that you can reduce excess costs while improving overall productivity.
Lacking MRO supplier insights
The establishment of a few, trusted suppliers is critical to maintaining MRO inventory improvements. A mistake of many companies is spreading their MRO procurement across too many suppliers; this overcomplicates MRO processes and can lead to rogues spending, contract leakage, and lost cost savings.
Dissemination across so many suppliers weakens your buying power and removes potential bulk discounts. By working with a select group of suppliers you can help to motivate critical suppliers to work together to form a comprehensive MRO management solution.
Optimize your MRO management today
The integration of purpose-built digital solutions into the MRO management process has allowed leading manufacturers the opportunity to address some of the challenges caused by MRO procurement. AI and machine-learning-enabled software is becoming smarter, faster, and more trusted, allowing organizations to hramonize MRO data and distribute insights widely with the click of a button.
Not only will these upgrades perform system processes more efficiently and across large enterprises/vendors, but they will mitigate risks to protect your company against unseen dangers and interruptions.
By following these steps to optimize your MRO spend, you put yourself on an excellent path to a more strategic and efficient approach.
