Even today, the aftershocks of the Covid-19 pandemic ripple across the global economy, and among the hardest hit was the MRO supply ecosystem.
The pandemic exposed vulnerabilities and inefficiencies in the global supply chain which has pushed MRO managers to adopt new manufacturing strategies that no longer allow for just-in-time inventory control to cope with disruptive events.
However, as MRO managers are finally finding their footing in a post-pandemic world, the threat of other significant disruptors is starting to loom over the horizon.
Here’s how you can strategize and stay ahead of three of the biggest challenges for MRO managers in 2023.
MRO curveballs to stay ahead of this year
The bread and butter of MRO is having the right products in the right amounts at the right time.
Having too much inventory means you not only run the risk of holding idle stock, but you’re also tying up capital in something that isn’t giving a return on investment. At the same time, having too little inventory means you’ll more likely face bottlenecks in your supply chain that can lead to a production outage. It’s the common tale of not having spare replacement parts on hand during unplanned production downtime.
Traditional inventory management strategies no longer cut it in a fast-paced, dynamic, global market. What you need is a intelligent solution that gives real-time, end-to-end visibility regarding your inventory so you know exactly:
- How much stock is available
- Where stock is being kept
- Duplicate materials that can be shared between facilities
- Which procurement strategies are being used to update inventory
Reporting and data collection
A big mistake that MRO managers make is that they’re still relying on legacy systems to collect, analyze, and report data. These systems are slow, rife with errors, and aren’t flexible enough to adapt to an era of digitization.
Important data regarding your inventory may be buried in piles and piles of siloed purchase orders or disorganized email threads. It makes it difficult to generate anything meaningful from what’s collected and nearly impossible to share it across your organization.
Working with outdated data collection systems makes it difficult to keep information current and accurate. Not only does this amplify inefficiencies, but unreliable data can have devastating effects on the decisions you make in your MRO strategy.
An excellent solution to this problem is to use a centralized system for reporting and data analysis. With a global overview of your MRO inventory, you can easily identify any vulnerabilities on both a micro and macro level. As a result, you’ll be able to set corrective actions in motion before problems snowball into something bigger.
Unreliable supply chains
If there was a word to describe today’s supply chains it’s this: fragile.
Global circumstances have shown many organizations that their MRO supply efficiency crumbles at the slightest disruption, smallest delay, and the faintest inconvenience. It’s left operations with long roads to recovery that have resulted in lost opportunities, capital, and even partnerships.
Now more than ever, it’s an absolute necessity for procurement leaders to use reliable systems that are responsive to external events. These strategies should be informed by historical data that simulates accurate models regarding future disruptions, insulting their operation from problems that lie ahead.
Embracing a digital transformation can help you leverage powerful tools with predictive analysis capabilities, safeguarding operations from disruptive events. This not only minimizes the potential damage that these events can have, but it can also help you reduce the costs that are associated with them. For instance, you can get actionable insight regarding:
- When to order replacement parts before a production downtime occurs.
- Whether to switch suppliers with consistent shipping delays to prevent downtime.
- Alternative routes to take for transport during an extreme weather event to prevent delivery issues.
Managing challenges in 2023
Intelligent solutions require intelligent systems
There’s little room for old processes that prove to be inefficient in today’s digital world. Investing in the right material management solution means leveraging harmonized data from across your entire MRO supply network and integrating it into a single, personalized dashboard.
This prevents data from being fragmented and duplicated and eliminates data silos. With access to real-time, accurate, and reliable data, you’ll be able to make informed business decisions and optimize existing strategies.
These tools also give insight into procurement decisions, as increased visibility gives procurement teams a way to maintain a digital paper trail for cashflow. What’s more, you’ll gain access to micro and macro-level reporting to give you a comprehensive breakdown of cost distribution.
For instance, the reason you’re seeing lower profit margins may be because of overspending on replacement parts. You can immediately introduce policies to curb such malpractices and eliminate rogue spending from your organization to minimize unnecessary expenses.
Let’s face it—we’re prone to making the wrong decision every once in a while. Biases and past experiences can cloud judgment, sometimes translating into some pretty expensive mistakes in the world of MRO.
But what if you could incorporate human intelligence with more processing power, increased accuracy, and the ability to work around the clock?
Harnessing the power of artificial intelligence and machine learning can uncover hidden gems in your MRO optimization strategy. These tools crunch large datasets into meaningful reports so you can make informed decisions backed by numbers.
It’s not just a matter of reporting either. Intelligent systems are helping organizations elevate their MRO strategies by recommending action items that build on top of existing improvements. It makes it possible for you to keep taking one step forward, without having to take one step back. Optimization shouldn’t require trade-offs.
Leverage new technology to face this year’s MRO challenges
Modern problems require modern solutions. It no longer makes sense to stagnate with old processes that continue to prove to be inefficient, unreliable, and obsolete. As the world heads into 2023, it’s high time for MRO distributors to leverage new technologies that can help build their first line of defense against the challenges ahead.
The right cloud-based MRO strategy should increase visibility and come with predictive analysis capabilities that help you see a return on investment in a matter of weeks. This will help you navigate an uncertain market and stay ahead of the competition at all times.