Points of View

How to Make MRO a Proactive Contributor to Your Enterprise

Nov 19, 2015 Jamie Snowdon

We recently wrote about the challenges surrounding MRO in enterprises today and how this core-enabling, mission-critical integrated business process is unmanaged or at best poorly managed. Many enterprises don’t recognize the value of an integrated process, because the fragmented processes they employ today seem to be good enough. In this Soundbite we are looking at what can be done to make MRO a more proactive, better managed capability so that enterprises can be more effective and adaptable with a well-defined supply chain that addresses outstanding business challenges.

 

We believe that there are three main actions that need to be taken to make MRO a more proactive, collaborative, and value-driven business model:

 

  • Design MRO to fit the needs of the business today and tomorrow, not the business as it was
  • Build a strong inventory management system that operates As-a-Service
  • Run MRO like an end-to-end business with a motivated owner exceeding expectations

 

To get acceptance that MRO can be a part of solving larger business problems; we first have to get beyond the attitude that MRO is a necessary evil.  Instead, it should be seen as a core-enabling business process that delivers simplified, intelligent and nimble operations, even a business in its own right complete with a vision, a strategy, and defined goals/outcomes. In this model MRO staff have defined roles and responsibilities and processes – with ownership and continuous improvement. Having a different, more business-like perspective engages staff and enables MRO to have a much greater influence on driving strategic business outcomes and treating the enterprise more as a customer.

 

By removing complexity from MRO processes, enterprises benefit from greater transparency, predictability and control. Without visibility of the needs of the enterprise, MRO supply chain management is going to be ineffective. The main focus should be on understanding the reasons behind current spending decisions and modelling the on-going parts requirements of the enterprise.  This goes beyond looking at the numbers but understanding the lifecycle of the parts under management. Having an effective and integrated end-to-end business process means controlling the cost levers, knowing why holding stock of certain parts is necessary and understanding why the performance or longevity for certain sub-categories of inventory might impact production. Getting the basics right is a crucial step before thinking about more advanced analytics and stock prediction techniques. However, advanced analytics is important to ensure that the process remains aligned with evolving business needs, and the effectiveness of the process is trackable.

 

Building this understanding and on-going visibility into the business process leads to its long-term success. Building a strong MRO process is no longer just about parts, not even about sourcing the cheapest parts. It’s about moving beyond status quo, accelerating towards process management and aligning organizationally to establish an MRO supply chain that delivers real business outcomes. It’s about process and supply chain management to enable business professionals to impact enterprise goals like reliable production, better management of their asset base, risk mitigation, cost reduction and value creation.

 

To make all of this work, it’s also important to invest in enhancing communication in the enterprise around MRO especially between the process teams and the other stakeholders.  Too often, we have seen MRO sourcing contracts fail because they are viewed within the silo of sourcing and do not address the business needs of key stakeholders across the enterprise. The key to a business process which is as complicated and integrated as MRO, is flexibility, as even the best process won’t deal with every eventuality and some problems require all parties to work as a team. Making sure the relationships and the people are as proactive as the processes will help avoid creating ever-escalating issues.

 

The last in this series of soundbites will look at the MRO business process in the As-a-Service Economy - the analytics platforms and new commercial models fuelled by smart insights and evolving technology and the implications this will have for MRO professionals and commercial models.