• Rapid globalization is very alluring however it creates enormous pressures on the various constituents of the supply chain. The activities that are fuelling this pressure build up may be summarized as, increasing business complexity, cost cutting and rising quality standards. This is having a major impact on how direct materials are purchased and their suppliers managed. Business pressures and supply chain management are causing firms to focus and evaluate the procurement cycle of their indirect materials and particularly M RO (maintenance, repair and operations). This underlines the need of sourcing for MRO purchases. As is understood, the MRO supply chain is there to support plant operations.
Controlling total cost of ownership for MRO items requires that the following three supply chain dimensions to be addressed:
1. Strategic Sourcing/Procurement
2. Physical Supply Chain
3. Technology Tools and Integrations.
Strategic sourcing/procurement –
A rigorous strategic sourcing process is the essential first step in MRO integrated supply management. This process involves the following steps:
• To begin with all data must be compiled to determine where M RO purchasing dollars are being spent. From this analysis, commodity groupings and classifications are to be made.
• Involve key stakeholders in the process, who are a functional team of subject-matter experts focused on one or more commodity groups.
• Understand total cost of ownership for the MRO item/family.
• Map the business requirements for the item/family
• Evaluate supplier/strategy options for the commodity
• Implement the sourcing decision
• Manage relations with suppliers using a supplier performance management process. This collaborative approach builds a foundation and future total cost reductions can be realized through customer - supplier integration.
Physical Supply Chain –
The physical supply chain is the lifeline of the MRO plant support effort. The MRO supply chain is quite complex and in order to bring about improvement first an analysis of the inbound distribution system is to be made including the key origin points, intermediate points and final destinations. Then follow a defined strategy for the inbound supply chain.
Technology Tools and Integrations –
After putting in place a strategic sourcing and M RO operating strategy the managers in the organization should focus attention to the selection, deployment and utilization of the right technology tools. The primary objective is to use technology to support and enhance business operations. After the right technology tool has been put to use, pilot projects are a good way to make improvements in a relatively short time.
Controlling total cost of ownership for MRO items requires that the following three supply chain dimensions to be addressed:
1. Strategic Sourcing/Procurement
2. Physical Supply Chain
3. Technology Tools and Integrations.
Strategic sourcing/procurement –
A rigorous strategic sourcing process is the essential first step in MRO integrated supply management. This process involves the following steps:
• To begin with all data must be compiled to determine where M RO purchasing dollars are being spent. From this analysis, commodity groupings and classifications are to be made.
• Involve key stakeholders in the process, who are a functional team of subject-matter experts focused on one or more commodity groups.
• Understand total cost of ownership for the MRO item/family.
• Map the business requirements for the item/family
• Evaluate supplier/strategy options for the commodity
• Implement the sourcing decision
• Manage relations with suppliers using a supplier performance management process. This collaborative approach builds a foundation and future total cost reductions can be realized through customer - supplier integration.
Physical Supply Chain –
The physical supply chain is the lifeline of the MRO plant support effort. The MRO supply chain is quite complex and in order to bring about improvement first an analysis of the inbound distribution system is to be made including the key origin points, intermediate points and final destinations. Then follow a defined strategy for the inbound supply chain.
Technology Tools and Integrations –
After putting in place a strategic sourcing and M RO operating strategy the managers in the organization should focus attention to the selection, deployment and utilization of the right technology tools. The primary objective is to use technology to support and enhance business operations. After the right technology tool has been put to use, pilot projects are a good way to make improvements in a relatively short time.
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