At the ARC Industry Leadership Forum in February, I had the opportunity to sit down with John Delligatti, Director of Digital Supply Chain Transformation at SDI, to discuss the pandemic, Maintenance, Repair and Operations (MRO), and the future of supply chain management.
I asked John to give some deeper insights on a few key points. First, give me some insight on how the pandemic affected the MRO space. Second, as supply chain disruptions become more commonplace, what are the major trends SDI is seeing? Third, what is the impact of real-time data on supply chains? Fourth, how does all of this affect the labor force? And finally, how do you recommend a company start this journey, and what advice can you give for the future?
Here are some of the key points from our discussion. You can watch the full interview below.
The Pandemic and MRO
First and foremost, what is MRO? MRO is an umbrella term covering all maintenance parts used for repairs or to support production operations. Whilst they are classed as indirect purchases, this procurement category plays an essential role in day-to-day operations.
The pandemic shined a light on something that supply chain executives will tell you is second nature. The supply chain is a chain, and it is only as strong as its weakest link. So, when geopolitical events and the pandemic struck, things that you were expecting to happen, didn’t happen. For example, for parts that would typically arrive in five days, you might get a lead time of five weeks. That’s enough to shine a light on things from senior management and make supply chain mission critical for these organizations.
Supply Chain Disruption Trends
There has been a mindset shift especially from technicians and ground floor folks from just in time to just in case. Organizations do not want to have a lot of working capital tied up in inventory, but if you have an asset go down because of a part that you are missing, you’re probably going to order two, so it doesn’t happen again. So, then it becomes a balancing act of how to prepare for future disruptions without upending the day-to-day operations.
Real-Time Data in the Supply Chain
You have to think about the impact of real-time data from the B2C experience that we all know. When you order a part online, we see it go through the process, and then it shows up at our door when we expect it. However, that’s not the case in MRO or the indirect supply chain. If you need a part, and you only buy it from one supplier, the information is only as good as they will provide you.
Real-time data allows you to understand if a part is running late, why it’s running late, and how to plan around that. You do not want your team of engineers to show up for work on a Monday but have nothing to do because the part has not arrived.
Supply Chain Labor
The pandemic exacerbated the skilled labor gap, as people that have been doing these jobs for decades are leaving, whether that is due to layoffs or retirement. Younger people are not picking up those jobs at the same rate that they have in the past. This means that the industry is losing a sense of expertise,
The Future of MRO and Supply Chain
Organizations that were on this journey before the pandemic are much better prepared to deal with disruptions. Companies need to truly understand what they’re buying to leverage the power of their data. Starting with a database project for cleansing existing data will provide the ability for subject matter experts to explore and ask the right questions. As the program matures, the impact will be exponential and wide reaching.
SDI is a Digital Supply Chain Services and Solutions firm with a focused practice in MRO, FM parts, site essentials/GNFR, and PPE – the parts, materials, equipment, and consumables necessary to keep plants and facilities operating safely and productively. Its solutions are purposefully designed to drive outcomes and improve the performance of facilities and plant maintenance teams.