Top 5 Reasons Manufacturers Struggle with MRO Optimization
A NewEraIn MRO
Maintenance, Repair, and Operations (MRO) is a critical part of manufacturering procurement and MRO inventory management, but most manufacturers have way less visibility into strategy than they’re willing to admit. They often leave the management of these crucial materials to the individual plants instead of adopting a network optimization initiative. The sheer amount of risk a manufacturer places upon their production operations by not optimizing their MRO materials can have a devastating impact on meeting production goals and customer orders. Furthermore, the abundance of wasted working capital lying around as duplicate parts stack up results in costly write-offs year over year.
Here are the top 5 reasons companies overlook the opportunity to invest in an operations optimization solution designed to optimize their MRO materials.
Here are the top 5 reasons companies overlook the opportunity to invest in a solution designed to optimize their MRO materials.
Reason #1
“MRO is not a focus for us right now.”
With MRO inventory often making up a double digit percentage of their manufacturing spend, it’s surprising so many organizations don’t make it a larger priority. Manufacturers constantly look for ways to balance budgets and reduce waste, but the focus always tends to be on direct materials. Prioritizing your MRO materials management allows you to discover opportunities to reduce procurement requirements and wasted working capital while significantly reducing the chances of an unplanned production outage.
Reason #2
“Our ERP solution should handle this for us.”
Many companies believe their ERP alone is enough to manage their materials strategy. While ERPs are critical, they aren’t built to handle the nuanced processes of your maintenance and repair requirements because they will always be designed as a broad finance tool.
As a system of record, ERPs are great at storing historical data regarding transactions, inventory, and several other basic tasks, but can be problematic if your organization still has certain business units using legacy systems built up from decades of merger and acquisition activity.
When it comes to MRO optimization, adopting a purpose-built intelligence solution allows you to get more from your ERP solution by harmonizing the data across multiple facilities or instances to keep your operations running smoothly.
Reason #3
“We have experts in house that can do this for us.”
While your team is talented and experienced with data management, there’s simply way too much data for them to be effective without a tool to help them comb and capture the critical insights needed for improvement opportunities. And if MRO is not a focus for them, capturing those metrics will never be a priority.
Many companies opt for an annual data cleanse project as a way to bridge the gap. Unfortunately, traditional data cleanse projects are time consuming, costly, and often irrelevant by the time the project is done. That’s why opting for a technology solution that delivers probability-based outcomes through natural language query and processing to apply a contextual understanding of actual challenges is a better fit for most manufacturers.
Reason #4
“We can’t take on another lengthy technology implementation.”
Many enterprise solutions take way too long to implement, require heavy IT involvement, multiple “go-live” phases, and a long runway before any realized ROI. The costs are high.
A key differentiator and value driver of a purpose-built manufacturing solution is the functional expertise of the challenge area it seeks to address. Unlike large scale enterprise technology implementations, these solutions operate as a single cloud-based platform that can be introduced quickly and provide a faster time to value.
Users gain near-immediate insights into MRO supply levels to deliver decision support within weeks, instead of months or years often required of ERP implementations and other broad enterprise solutions. Eliminating the need for customization, large scale implementation, and complex training not only gives platform users faster access and faster results, but also requires very little resources from your IT department..
Reason #5
“We don’t have the budget for this right now.”
With all the uncertainty and disruption hovering over supply chains right now, companies need to find innovative ways to offset the higher costs of running their manufacturing operations while mitigating the growing threat of inflation and economic slowdown. Achieving true visibility into your MRO supply levels allows you to realize immediate opportunities for reducing wasted working capital, avoiding the risk of unplanned production downtime, and strategically aggregating MRO spend across your enterprise network.
Play the long game for manufacturing resiliency
Supporting your organizations’ digital transformation with a purpose-built MRO materials management solution allows you to adopt innovative, resource friendly technology with significantly less risk than one focused solely on direct materials. An intelligence driven MRO optimization solution allows you to improve your manufacturing strategy, infuse advanced decision support, and reduce overall risk while simultaneously fueling your supply chain maturity journey.
Download the ebook to learn more about optimizing your MRO strategy today.