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How Covid Digitalised the Industrial MRO procurement ecosystem
Posted on Mar 8, 2021 |
Posted in News |
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COVID-19 has created a remarkable impact upon the world of business, as supply networks for industrial processing and multinational manufacturing have been seriously affected. Maintenance, Repair and Operations (MRO) are strictly important for the seamless running of companies, any breakdown in the MRO supply chain can lead to massive operating costs due to interim suspension. But with the worldwide disruption, industries are striving to maintain as much conti-nuity as possible in their machine-parts and maintenance material supply. This is having an ex-ponential effect on the whole MRO supply chain.
COVID-19 has created a remarkable impact upon the world of business, as supply networks for industrial processing and multinational manufacturing have been seriously affected. Maintenance, Repair and Operations (MRO) are strictly important for the seamless running of companies, any breakdown in the MRO supply chain can lead to massive operating costs due to interim suspension. But with the worldwide disruption, industries are striving to maintain as much conti-nuity as possible in their machine-parts and maintenance material supply. This is having an ex-ponential effect on the whole MRO supply chain.
As per the global survey, the MRO industry expects to grow at a CAGR of 2.23% during the forecast period 2019 – 2025. The Department for Promotion of Industry and Internal Trade (In-dia) reported that India's annual growth in the manufacturing industry in 2019 accounted for 3.9%, from 2.8% in 2016. With the increasing growth in the manufacturing sector, the require-ment for maintenance is growing to keep equipment and process running smoothly, thereby driv-ing the growth of the MRO market in the country.
Maintenance, repair and operation (MRO) is an incredibly difficult category to handle. Products are typically cheap and not mission-critical, leading to substantial inconsistency in requirements, cost, contract terms and other variables. But, to counter these difficulties, MRO requirements are now heavily impacted by e-commerce. Industrial goods and services are now readily available. You can buy anything like electronics products, hardware or machinery tools online. With in-creasingly global and diverse supply chains, the supply options are expanding and becoming eas-ily accessible.
New digital technologies help procurement functions better understand, assess and improve their MRO expenditures. The three key areas delivering the greatest mix of quick deployment and op-timum influence are: automated text processing to eliminate redundant sourcing; computer emu-lation to minimize inventory, and optical character recognition to digitize contract management. The implications of these solutions can be substantial: they can lead to improved contract im-plementation, inventory reductions of up to 30% and cost savings of between 15% and 20%.
More specifically, the creative technologies will give companies a huge edge over the difficulty of MRO procurement and turning the industry into a value-generating category that sets a new standard for coordination between procurement and operations.