Supply Chain Mro

“Integrated MRO Supply Management”

A Three Dimensional View By Thomas Terfehr

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The pressures on suppliers to help their c ustomers i mprove bus iness perfor mance are enor mous in this global economy. Business complexit y, cost pressures and e ver increasing quality standards are at the root of these pressures. The ‘extended enterprise’ supply chain model, with a focus on rapid product desi gn, lean manufacturing, a nd J IT inventories, has proven its effectiveness a s a competiti ve weapon. This is having a maj or impa ct on how direct materials (those materials and c omponents that ulti matel y become part of the pr oduct which is sold), are purchased a nd the ir suppliers mana ged. Inventories ha ve bee n slashed, ti me required for product design has been reduce d, quality has i mprove d, and suppliers and customers find the msel ves in ne w and unprecedented roles. Business pressures and suppl y chain ma na ge ment are causing firms to also e valuate the world of indirect mat erials and particularly M RO ( maintenance , repair and operating supplies). The path to i mproved perfor mance in this arena is not, howe ver , s o straightforward as wit h direct materials. At the core, the M RO supply chain exists to support plant operations. The supply s yste m is complex with ma ny, often thousands or tens of thousands , of parts, pieces, supplier s and inventor y stoc kpiles. The a mount of annual “spend” for a typical c ompa ny is significant (15%, or more of total spe nd). Finally, there are ma ny decision-ma kers with different agendas who are often not in close communication with each other. The net result of this c omplexit y and lac k of coordination is hi gher cost and ser vice gaps . Achie ving lower total cost of ownership for MRO ite ms requires t hat the following thre e supply chain di mensions be addressed. Complete success invol ves integrating all three. Strategic...