Improving MRO Supply Chain with Better Communication

Original Post Source

Improvements in monitoring equipment and processes have made collecting data on supply and consumption levels easier than ever. Fiber optics, digital and virtual technology allow information to be transferred at the push of a button. Yet most maintenance, repair, and operations supply chains operate at suboptimal levels largely as a result of poor communications and information management.

The culprit is often a silo mentality in which divisions operate within functional and operational compartments. Failure to communicate – collect, share, analyze and act appropriately on  information costs manufacturing companies in at least three ways:

  • It prevents complete capture of market opportunities.
  • It restricts productivity, efficiency, and return on assets.
  • It drives up costs and reduces profit margins.

Strengthening communications among procurement, warehousing, inventory management, accounting, plant management, maintenance, and other related activities helps align departmental processes with organization-wide goals.

Planning

Breakdowns in communication prevent decision makers from viewing and analyzing the data that inform strong decisions. This lack of visibility across the MRO supply chain results in logistical nightmares. For instance, the maintenance department schedules routine maintenance on a key piece of equipment. But a rush order or delays earlier in the week has pushed production behind schedule, spurring the plant management team to balk at shutting down. Meanwhile, the central warehouse has already staged the replacement parts and ordered more inventory in anticipation of the scheduled repairs.

Open communication could have minimized this scenario’s negative effects. The additional demand and the need for work on the machines are at odds, making it impossible to satisfy both the sales and maintenance departments. With a “big picture” view, some maintenance could have been performed during the earlier production delays.

Productivity

The storeroom is often the scapegoat for missing critical parts, oppressive carrying costs, and excess obsolete inventory. These MRO errors may well be the result of insufficient communication from operations, maintenance, finance, or other departments.

Warehouse managers may feel management’s wrath when stockouts of blades, bits, or pumps occur when the real culprit could just as easily have been a management decision. A more intensive production process, for example, may result in parts wearing out more quickly than in the past. If procurement is not aware that inventory will be depleted more rapidly, it may not adjust min/max levels that trigger automatic orders and the next shipment may not arrive on time.

Profitability

Communicating and collaborating with MRO suppliers, distributors, and in-house stakeholders are keys to discovering and eliminating service gaps that siphon profits. Mapping the MRO supply chain can highlight inefficiencies. Often, a simple, step-saving change in one department can make ordering, tracking, receiving, and distributing supplies in another area more efficient. On the other hand, the alteration of an upstream process that would save $1 million annually may ultimately result in bottlenecks downstream that would cost the company $10 million.

Either way, interdepartmental communications can forecast results and coordinate conflicting agendas.

Similarly, lack of clear instructions or requests from one department can cause cost-driving decisions and responses in another – over-ordering, misplaced inventory, micromanagement, duplication of effort, equipment failure, compromised worker safety, and more.

SDI Solutions

SDI’s Reliability-Centered MRO includes a communications audit that ensures the right data is collected, delivered to the right decision makers, and analyzed correctly. This proprietary communications and logistics procedure connects, engineering, planning, finance, quality control, and other MRO-influencers to facilitate end-to-end supply chain functionality and maximize equipment production time.

For a demonstration on how SDI can tear down your organization’s silos and establish efficient communications links that saved money, increases profits, and optimizes asset life, contact our supply chain experts today.

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