Market Review
burden of implementing robust business continuity planning. It’s clear to see from this that close collaborative and supportive partnerships from suppliers is key for MRO procurement professionals, so it is a goal distributors and service providers should keep high on the agenda, and a real priority for us at RS. It’s a positive picture in this area too, as more than a third (36 per cent) of those surveyed said collaboration with suppliers is increasing and opportunities for agility have been created.
Business conditions in the UK are improving, but with countries across the world moving in and out of lockdown restrictions, it’s still very much a fluctuating situation that reinforces the importance of business continuity planning.
Managing stakeholder relationships is business critical
Challenges with stakeholder relationships is something that has been a highlighted issue for MRO procurement professionals since the inception of our surveys, and while there has been a decrease in numbers reporting difficulty in getting stakeholders on board with changes that need implementing, it is minor, down from 42 per cent to 38 per cent. Meanwhile, the number of internal stakeholder relationships has doubled for professionals, and the types of stakeholders they have to engage with has broadened to include areas such as education and training. This makes the task harder – getting stakeholders together to agree on decisions, or understand the processes and differing priorities, is a real challenge – especially across multi-site operations.
A key tactic in improving
stakeholder relationships is for MRO procurement professionals to ensure they have an understanding of the end-to-end process, moving away from a focus on an individual component to understand the whole lifecycle impact. For instance, selecting a cheap product alternative to save on cost, without considering product lifespan, maintenance cost or obsolescence risk, is inefficient. By engaging with stakeholders across the business to get a greater understanding of how to effect value, a more successful approach to meeting KPIs of both procurement and MRO is facilitated.
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Improving efficiencies with digital solutions
COVID-19 has accelerated digitisation and new technology, through now commonplace practices such as remote working, and this is anticipated to continue for the next six to 12 months. Digital solutions are improving efficiencies – automating order-to-pay processes
and deliver value.
The investment in the use of digital tools will continue to grow as many organisations aim for total digitalisation of all procurement processes – particularly with employees adopting a combination of office, hybrid or remote working. It was also encouraging that many respondents thought the logical
42 per cent in 2020 for cyber security services. Furthermore, 28 per cent of organisations surveyed are employing energy monitoring for specific assets, while 18 per cent use condition monitoring to avoid unplanned breakdowns – which can have a devastating effect on operations, incurring production downtime.
Managing COVID-19 recovery pressures
The pressures of the COVID-19 recovery highlighted in our survey included disrupted supply chains due to firms going out of business, furloughed staff and decreased MRO spend. This has impacted supplier rationalisation in the UK, which has seen a decrease year on year, and over the last year, will likely have been driven by supply chain issues, companies failing and reduced headcounts/ furlough. We’d always advocate supplier rationalisation as the right strategy, but with the supply chain challenges of the last year, it certainly hasn’t been the best time to execute it.
and reducing back-office costs around invoice processing. According to our survey, a third of UK organisations are using eProcurement to automate transactional tasks, with more than half of the stakeholders using eProcurement channels for purchasing and a quarter actively training end users on these systems to increase MRO procurement efficiencies. It’s clear to see that when faced with a situation like a pandemic, focusing on automating tasks that don’t need to be done via human intervention can help the organisation achieve efficiencies
extension of digitalisation included increased use of vendor-managed inventory (VMI), which not only reduce costs, but also physical interaction – a growing priority for many organisations in the fight against the spread of COVID-19.
Further evidence of an uptake in digital solutions was provided in the survey results, with big increases year on year in the UK in industrial cloud computing and cyber security services: 21 per cent vs 14 per cent in 2020 for industrial cloud computing and 49 per cent vs
The positives to come out of the pressures, it seems, were that “stronger partnerships” and “deeper engagement” were built – imperative to meet the most significant KPI for 85 per cent of UK organisations of ‘on time delivery’. The pandemic spurred a focus on agility for almost half of respondents, who said the status of MRO procurement within their organisation had been enhanced. Another day-to-day challenge for the profession is the ongoing ‘war on talent’. Almost a third of respondents cite difficulties in finding people that understand best practice procurement. Our survey has shown that the pandemic has certainly provided some positive progression for MRO professionals. Along with growing technology adoption was more of a realisation of the importance of looking at the whole process costs, including cost of buying and storing the goods, rather than simply the price paid. There’s also a growing recognition of the additional value suppliers can add that help with risk mitigation, efficiencies and continuity planning. The pandemic has certainly highlighted how we should evaluate new suppliers, and as an omni-channel product and service solutions provider for industrial customers and suppliers, RS will continue to support the procurement profession in navigating the COVID-19 recovery and embracing digitalisation.
https://uk.rs-online.com Components in Electronics December/January 2022 45
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