In the Maintenance, Repair & Operations (MRO) space, three departments typically work together: procurement, engineering/maintenance and inventory. If these three teams work together, things work well.
But what if they don’t work together? Let’s say they begin to ignore inventory. Engineers will be forced to order lots of things. If procurement is left out, then engineers have all the spare parts they want, but the company’s broke because they’ve spent all their money. But if engineers are ignored, we’ll have the wrong parts sourced from the wrong place—albeit at a great price!
Getting the MRO supply chain right is a collaborative effort, but once it’s right, Operational Excellence is delivered in the form of the right part at the right time at the right price.
So how does that play into Operational Risk Management?
Research suggests engineers spend 30% of their time looking for spare parts. Delays in getting hold of a spare part can impact the return to service of a critical system. Or, it could be that a lot of money is spent on spare parts that are not needed.
Perhaps worst of all would be fitting the wrong spare part that resulted in an unexpected, potentially very expensive critical machine failure—or even a major safety concern.
The emergence of Integrated Risk Management (IRM) as a result of Industry 4.0 is enabling teams to work together. And it’s paying off. By integrating departmental technologies, teams can pool information to support more effective Maintenance, Repair & Operations, improve the supply chain overall and quickly find spare parts in case of an emergency.
Manufacturers are changing their models as a result of the digital revolution to focus more on services than the supply of spares. The Internet of Things (IoT) can enable a service-driven, just-in-time spare parts model. In fact, according to McKinsey & Co., IoT alone could result in a 40% reduction in inventory.
But to take advantage of these benefits and the potential savings, manufacturers and end users need to make sure they can interact with each other. Standards are key, and, in particular, the ISO 8000 standard allows for the exchange of structured spare parts data. Now, the manufacturer can make the part, provide the data and supply it to all the people who use that spare part without end users or distributors needing to manually key in the data. Saudi Arabia, for example, is demanding ISO 8000 data to be supplied anytime something is sold to its government.
Realize that strong materials master data management enables the delivery of more efficient business processes and yields a competitive advantage. Just like any other Digital Transformation, however, this is a journey. It requires bringing in the right teams, agreeing to the right processes, developing the right program to manage change effectively and efficiently across all business units. For organizations looking to develop digital strategies to optimize MRO, Industry 4.0 technology can enable far more efficient processes that reduce the time needed to search for spare parts while maintaining accurate, accessible and reliable spare parts data.
Want to learn more? Meet Stroud at ProcureCon, which takes place Oct. 28-29, 2019, in Atlanta, Georgia.