Just-in-time supply chains put huge pressure on all of the industries at the best of times. During the COVID-19 pandemic, these pressures intensified to an unprecedented degree. So, the importance of collaborating with trusted suppliers with the expertise and knowledge to support business operations cannot be overstated.
In manufacturing, steels and metals, maintenance budgets are under pressure, which means Maintenance, Repair, Operations (MRO) professionals must maximize their budgets. Fast delivery and availability of spare parts are of critical importance.
Several plants had to close due to COVID-19 lockdowns, and social distancing rules have changed how people work everywhere. Personal Protective Equipment (PPE) has become an integral part of every company’s needs.
Indirect Procurement Report 2020 – The evolution of MRO procurement, compiled by RS Components 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.
Two-fifths of respondents identified the need to improve asset performance as a key business pressure. It is especially true in manufacturing, where unplanned downtime can have a detrimental effect on the company.
“Uncertainty in the economy continues to put pressure on companies to reduce costs everywhere.”
Due to continued economic uncertainty, companies are under pressure to cut costs across all areas, which has increased the use of external maintenance contractors. External contractors are also becoming more popular due to skill shortages in the maintenance workforce, which makes it even more essential to have a knowledgeable and responsive MRO supplier.
Who is responsible for your purchasing?
Although a vast majority of companies use vendor-managed inventory for fast-moving, low-value MRO parts, external contractors can result in higher costs for ad hoc purchases. This is why a supplier’s local relationships with customers are becoming more and more vital. The customer needs to know that, whoever is doing the maintenance, the right parts will be available when needed.
It is especially important when there is a breakdown. In order to prevent prolonged downtime, the supplier’s local branch team can source and deliver components promptly. Unplanned downtime can be a problem for some manufacturers due to a lack of data about their assets. By providing advanced warning of component failures, condition monitoring would prevent significant loss of production.
Using cloud-based devices within the Industrial Internet of Things (IIoT) to monitor assets allows companies to capture performance data, which can be used to improve the scheduling of planned maintenance and avoid emergency shutdowns.
In particular, the steel industry is facing unique challenges due to deferred investment in new plants as well as intense foreign competition. Due to shrinking MRO budgets and the growing importance of maintaining existing plants, MRO teams need all the support they can get.
It’s all about data
The pandemic and a tough financial environment present major challenges for manufacturers. With eProcurement, engineers can order the exact parts they need while purchasing teams gain visibility into expenditures.
The steel industry is not the only one facing intense global competition. Even a large corporate facilities management company can find it hard to drive compliance with procurement policies as engineers at the coalface can tend to buy where they see fit without regard for agreed policies.
This ad hoc purchasing also risks causing maintenance overruns if engineers travel to collect parts from suppliers in congested cities and towns. A minor price reduction will be cancelled out by the much higher costs associated with extended downtime.
A good solution to this problem is to deploy eProcurement solutions, which ensure quality and cost compliance while ensuring fast delivery. With eProcurement, engineers can order the parts they need, while purchasing teams can track expenditures at a high level.
To be a value-added supplier for manufacturing, steel, and metals requires a high level of technical expertise, as well as an understanding of the customer’s business requirements.
Additionally, it is about sharing data about their procurement patterns to assist them in making informed commercial decisions. Only then can a supplier guarantee that its customers’ MRO purchasing is managed effectively.
Shiv Bhambri, Country Manager, RS India
Launched in 1937, RS is a global omnichannel provider of product and service solutions for designers, builders, and maintainers of industrial equipment and operations. RS Components is a trading brand of RS Group plc. RS recorded a global turnover of £2.5 Billion in the FY ending March’22 and Supporting Engineers with over 6.5L products from 2500 Global leading brands. The company offers 5k NPI (New product introductions) each month and RS India supports over 10k customers across India and ships to over 20k PIN Codes across India.