Putting Together an Effective MRO and OEM Supply Chain
Maintenance, Repair, and Operations (MRO) and Original Equipment Manufacturers (OEMs) management are two critical components of any supply chain. While MRO focuses on the optimal performance of complex machinery and equipment, OEMs are responsible for the design and production of these assets.
However, with disruptive events on the rise coupled with evolving customer demands, market leaders need to adapt accordingly and put together effective MRO and OEM strategies to stay ahead of the market.
In this article, we will explore a few tried-and-true methods that manufacturers can implement to improve their company’s bottom line and better manage their materials.
Start with what you know
It’s important to assess where the business is now before moving forward. By augmenting existing knowledge and experience with new technology, managers can identify areas for improvement and develop strategies that are tailored to their organization’s specific needs.
Harmonizing data across the whole of an operation is the most accurate way to make sense of current needs based on existing trends. Based on this information, manufacturers can define success metrics and make informed business decisions to fine-tune performance. Common metrics include:
- Production and maintenance costs
- Rates and frequency of production downtime
- Asset and MRO inventory management
- Spare part sourcing and procurement
Compare spending on a micro and macro level
By analyzing spending at a micro level, organizations can gain insight into which parts and components are most frequently replaced, how much is spent on each replacement, and how frequently replacements occur. This information can be used to identify areas where costs can be optimized by identifying opportunities for preventive maintenance, network sharing of materials, or exploring alternative parts suppliers.
By gaining insight into spending patterns over time, organizations can make more informed decisions about which parts to stock and how to strategically schedule purchases. This can help minimize inventory costs from overages while also reducing the risk of stockouts.
Make strategic maintenance decisions
Making strategic maintenance decisions based on historical data can also help to elevate or transform existing MRO strategies by allowing organizations to move from reactive maintenance to a more proactive and predictive approach.
By leveraging data analytics and machine learning, organizations can identify patterns and trends in asset performance, predict when maintenance is needed, and schedule maintenance proactively.
Rather than waiting for an asset to fail before taking action, organizations can schedule maintenance well ahead of time based on historical data, allowing them to identify potential issues before they become critical. This allows organizations to avoid unplanned downtime and minimize the risk of asset failure, ultimately improving asset reliability and performance.
Create resilient operations through optimization
Negotiate strategic procurement contracts
Setting criteria for your procurement partnerships based on what you know is very important because it can help business owners work with spare part and MRO suppliers who are aligned with their organization’s values and objectives. This can help foster long-term partnerships that are built on trust and collaboration, ultimately leading to improved service levels, lower costs, and reduced risk.
It’s also important to establish and track Key Performance Indicators (KPIs) to ensure that a company’s procurement partnerships are delivering expected results, and make adjustments as necessary to optimize performance. However, this can be difficult to do with archaic, legacy systems because of how slow and error-prone they are. As supply chains become more complex, it can be easy for data to be lost in these systems which can result in data silos and data redundancies.
Investing in an intelligent material management software makes it easy to gather all the MRO and indirect materials data in a company’s database and consolidate it into one location for data-backed insights. As a result, stakeholders can access important information, like on-hand value of materials , price history, lead times, scorecard rankings, and other KPIs that are accurate and up-to-date at any given time.
This can be useful when it comes to gauging information about purchasing compliance. Managers can check whether purchases are made in accordance with established policies and procedures, helping organizations minimize the risk of fraud, errors, and compliance violations.
If necessary, managers can also consolidate vendors according to their performance and compliance rates. This can help improve procurement efficiency and reduce costs by streamlining processes and minimizing administrative overhead.
Optimize as you go
Building on top of what works involves identifying the best practices and processes within your organization and building on them to drive continuous improvement. This approach allows organizations to leverage their existing strengths and capabilities to drive incremental performance improvements, rather than starting from scratch each time.
Harnessing the power of tools like artificial intelligence and machine learning can streamline this process since, as this technology is designed to learn and improve based on user interactions.
For instance, it’s proven that scheduled maintenance of assets improves their lifespan. By focusing on network optimization opportunities, manufacturers can develop targeted maintenance and spare part management strategies that help to minimize downtime and reduce costs.
Measuring and tracking success is another critical component of a resilient MRO strategy. By tracking progress against success metrics, organizations can gain insight into their performance, identify areas for improvement, and make data-driven decisions. Additionally, by regularly measuring and tracking success, organizations can ensure that their MRO and asset management strategies remain aligned with their broader business objectives, and make adjustments as necessary to optimize performance.
The right technology can help you build a stronger, more reliable supply chain
The supply chain landscape today is rapidly evolving. To survive in a competitive, global, market, business owners should evolve with it. Although this may seem daunting, the right technology can help you build a resilient supply chain that’s able to face new challenges.
Learn how organizations can improve their MRO strategies through intelligent materials management.