FEATURE TEST & MAINTENANCE THE FUTURE OF PROCUREMENT


Peter Malpas, managing director - RS Northern Europe, discusses the impact of the IIoT on Maintenance, Repair and Operations (MRO) procurement. He explains how digital eprocurement systems make searching, ordering and paying for items quicker, simpler and traceable, reduce delivery times, and generate valuable process data


W


e’re all familiar with the fourth industrial revolution, and the fact we


are in an era where digital technology is rapidly disrupting the way manufacturing works. As a result, procurement for Maintenance, Repair and Operations (MRO) is also set to change dramatically. In research conducted by RS Components and the Chartered Institute of Procurement & Supply (CIPS), 46% of procurement and supply professionals said they expect their indirect procurement strategy to change significantly over the next five years. Professionals involved in the


specification or procurement of products and equipment in the manufacturing environment need to keep abreast of the biggest developments impacting the indirect procurement process today, and how will they drive change for MRO procurement.


business to help them achieve cost- cutting in the indirect procurement process. RS’ own independently verified research highlighted that the process costs with indirect procurement can be twice as much as the product itself. Focusing on reducing process costs with the introduction of RS eProcurement system PurchasingManager, RS was able to help the customer streamline buying and overhaul the numerous processes involved in gaining approval and ordering from multiple suppliers. This generated savings of more than £30,000 for the customer. The benefits of a digital system are that


it makes searching, ordering and paying for items quicker, simpler and traceable. Procurement costs will be reduced when the amount of time involved decreases, and this reflects on an organisation’s bottom line. The ordering chain transparency also removes risk from the


‘Next day delivery is a normal expectation, and has paved the way for reduced stock holding on site, as organisations order products when they need them’


So, what will be the impact of IIoT on


MRO? In MRO procurement, there is an enormous opportunity for organisations to move from reactive maintenance to using technology that allows maintenance to be planned and preventative. New machinery or upgraded older


machines often have sensors that inform maintenance teams of upcoming faults. Some sensors can communicate with ordering systems, automating ordering of replacement parts, so engineers are prepared when the repair is needed, avoiding costly downtime. Many organisations have started to


make a switch to an eProcurement purchasing system. However, there are still a lot of manual processes around purchase to pay processes, particularly for MRO supplies. While there is an up-front set-up cost to introducing an eProcurement system, this should be easily offset by the benefits that the system brings in terms of reducing the process costs associated with low-value, high volume purchasing. RS worked with a major confectionery


18 SEPTEMBER 2018 | PROCESS & CONTROL


supply chain, such as occurrence of procuring counterfeit or substandard goods from unapproved suppliers. The beauty of adopting IIoT and


eProcurement systems is the amount of data that will be generated – offering analysis potential from which insights can be created to improve processes. Data can provide insights on everything from the


Using IIoT technology in MRO procurement provides an enormous opportunity for organisations to move from reactive maintenance to using technology that allows maintenance to be planned and preventative


New machinery or upgraded older machines often have sensors that inform maintenance teams of upcoming faults. Some sensors can communicate with ordering systems, automating ordering of replacement parts


types of maintenance required and the parts that need to be purchased, with an end-to-end view on how that process works and can be improved. Working strategically with suppliers, an organisation’s approach to MRO purchasing can be completely overhauled. Being able to identify both short and long-term improvements will create significant efficiencies and make any organisation more competitive. Technology is having a huge impact on


the supply chain for MRO parts as the capability for suppliers to deliver products quickly, and with greater transparency on order status, increases. Next day delivery is a normal


expectation, and has paved the way for reduced stock holding on site, as organisations can easily order products as and when they need them. This approach only fails if unreliable suppliers are used. By working with trusted suppliers, organisations can free up vital storage space and working capital. The recent research conducted by RS and


CIPS highlighted that long lead time on replacement parts was one of the biggest drivers of downtime for maintenance and repair teams. Parts that are crucial to ongoing operations in any organisation require speedy delivery for the avoidance of downtime. Managed inventory services offered by


suppliers could reduce the time and cost linked to controlling inventory. Using these services means an organisation can access storage solutions with regular stock checks managed by the supplier, stock replenished when required and regular reporting around consumption - which ensures that the correct parts are in stock when needed. Working closely with suppliers that offer


a multi-channel approach is the best way to protect an MRO supply chain. Suppliers with digital capabilities, combined with valuable ‘human’ support, offer a true omni-channel approach that benefits customers. This is the future.


RS Components www.rs-connectedthinking.com


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