Whether it’s the on-time delivery of vehicles or defence of the realm, downtime can be anything from hugely expensive to a matter of life and death. The COVID-19 pandemic has only increased the pressure.
These should be exciting times for Original Equipment Manufacturers (OEM), automotive, transport and defence. Innovations such as electric autonomous vehicles, trains where the signals are in the cab not on the trackside, and a new generation of defence systems offer huge opportunities.
Unfortunately the COVID-19 has applied the brakes to some projects, disrupting global supply chains and causing a slump in demand for cars. Despite this, production automation and robotics are still driving the high-tech revolution in this sector, transforming working practices. And as the pace of change accelerates and the value of the finished product increases, downtime becomes ever more expensive.
Condition monitoring is one way to make predictive maintenance a reality. By tracking the performance of components in real time, condition monitoring can flag up potential failures before they occur.
Better still, when linked by the Industrial Internet of things (IIoT) to cloud-based data analytics, information about the real-life performance of components can be used to schedule planned maintenance to avoid failures altogether.
The power of eProcurement
Technology is making the MRO function more efficient, with ePprocurement tools such as RS PurchasingManager™ allowing decisions to be placed in the hands of individual engineers, working within pre-set spending limits.
It is also making MRO faster: at Glasgow Airport, components are held in a landside facility, managed by RS Scanstock™. However, getting to the facility to order components wasted precious time for maintenance engineers working airside, who needed to go through security for each order.
As well as empowering engineers and speeding up delivery, eProcurement ensures compliance with procurement policies and reduces the need for ad hoc purchases. The overall result is improved efficiency and adherence to cost controls.
“The MRO function in OEM, automotive, transport and defence is becoming as technologically advanced as the products its companies are making"
Put another way, the MRO function in OEM, automotive, transport and defence is becoming as technologically advanced as the products its companies are making.
This sector has a large and diverse supply chain. Take aviation, for example. Building an airliner requires a host of specialist manufacturers making everything from the pitot tubes that measure an aircraft’s airspeed to entire wings, like those produced at Airbus’ factory in North Wales.
The same is true in automotive, where parts come from across the globe to assemble cars and vans. And every company in the chain needs strong MRO to avoid downtime which might cost them the right to supply a major customer.
Defence companies are required to guarantee the operational availability of their products. Meeting strict performance criteria is part of the DNA of this sector. But without a high-quality MRO supply chain these targets will be missed.
Throughout these complex supply chains, companies of all sizes are upping their game in terms of production technology. As a result, they all need agile and knowledgeable MRO partners to support their transition to high-tech manufacturing.
Relentless cost pressures
As if these levels of supply-chain complexity were not enough of a challenge, just like every other area of business, pressure to control costs is mounting.
The Indirect Procurement Report 2020 – The evolution of MRO procurement, compiled by RS with the support of the Chartered Institute of Procurement and Supply (CIPS), found that 59% of MRO professionals said they faced pressure to reduce operational budgets.
The same study showed that almost three quarters of UK companies already use some form of vendor-managed inventory for MRO supplies and 17% said the pandemic had prompted them to rationalise the number of suppliers they were using in order to improve procurement efficiency.
The need to improve management of ad hoc purchasing was illustrated by the report’s finding that companies in the UK have an average of 88 different MRO suppliers. Almost half of companies said they needed to ensure better procurement contract compliance.
Ad hoc purchases made outside validated supplier contracts incur hidden costs per item, when activities from setting up new vendors, raising purchase orders and processing invoices and payments are taken into consideration.
RS have the digital tools, the inventory and the industry expertise to take the pain out of MRO procurement to help these sectors and their suppliers manage their operations more efficiently, productively and profitably.
RS has expert advisers on hand to talk through any MRO challenges you may have and can give you examples of how we’ve helped organisations overcome them. If you would like to speak with one of them, please contact us here