MRO may only be three letters, but it can have an enormous impact on your business
How would you describe MRO? Beyond the actual words maintenance, repair and operations, you'd probably talk about inventory, supplies, looking after equipment and machinery. You might even give another definition, such as indirect procurement. But would you mention how Maintenance, Repair and Operations supports your business?
MRO is about consumables, but it's about so much more too. How indirect procurement is managed can help a business to meet its goals – or the opposite. In this article, we explore two different ways that MRO can affect a company and a simple strategy for ensuring that MRO in your organisation is a force for good.
Disruption and inefficiency
Scenario one: a vital piece of machinery breaks down in the middle of the workday. You don’t have the right spares on site. Maybe you can source the item within an hour or two. Maybe you can arrange next-day delivery. Hopefully it’s not a bespoke piece of kit with a lead time of several weeks.
Scenario two: an engineer gets in touch. They are scheduled to work on an essential piece of equipment at a remote site but when they checked the central stores, the products they needed were missing. Nobody is sure where they are. Maybe they can visit an approved supplier to pick up a suitable alternative on route to location. Maybe they can visit a non-approved supplier for the same. Hopefully they’re not after essential PPE in the early days of a pandemic.
Whether the cause is machinery breakdown, issues with supply or poor inventory management, problems with MRO mean problems for the whole business. Downtime, especially when its unplanned, can be costly (according to one study, it costs UK manufacturers £180 billion per annum).
For public sector organisations, it can mean additional fines. For all businesses, it can be harmful if you develop a reputation for unreliability among end-users who become aware of delays and disruption.
Slavery and sustainability
Scenario one: the radio news programme is on in the background and your ears prick up when you catch the name of a big supplier being mentioned. Have they won an award? Is a spokesperson discussing record profits? No, an investigative journalist is sharing details of the widespread human rights abuses, including modern-day slavery, they’ve uncovered at this company.
Scenario two: same situation, only this time the journalist has uncovered gross violations of environmental legislation at the firm, including illegal disposal of toxic waste.
Whether it’s humanitarian issues or environmental ones, the actions of your suppliers – and, in turn, their suppliers – can have consequences for your business too. Finances, reputation and moral integrity are all at stake.
Work with trusted suppliers
One simple way to avoid the scenarios above, and more, is to work with a small number of trusted suppliers.
Why? You can feel confident that they have robust oversight of their supply chain and own working practices. You can put in place agreements to leverage scale and get better prices on products. You can collaborate with them and use their knowledge and expertise to develop solutions that will minimise disruption and increase efficiency, from procurement solutions to help your organisation take control of ordering and provide visibility of spend data to inventory solutions to help you manage fast moving, low value items that your team rely on day in, day out.
Such solutions provide easy access to supplies, ensure the right level of supplies are available and increase visibility of spend. And with benefits such as consolidated invoices, they can reduce business processing costs too.
RS Components has experts on hand to understand your challenges and give you examples of how we’ve helped organisations like yours manage the Indirect category for MRO.
If you would like to have a conversation with one of our MRO experts, please get in contact here: [email protected]