Asset Intensive & Maintenance Repair Overhaul (MRO) supply chains have some commonality with traditional manufacturing and consumer supply chains but present a unique set of challenges
A mature asset intensive / MRO supply chain is likely to be highly integrated and managed with the common goal of assuring availability and reliability at an acceptable cost, whilst delivering enhancements reliably and cost effectively. Many asset owning organisations, however, still have some way to go before achieving this goal and asset supply chains are relatively immature compared to those in FMCG and other manufacturing industries
Typically, asset-intensive and MRO supply chains contain high-cost rotable equipment with long life cycles. The supporting supply chains need to be designed to support asset construction, enhancement and maintenance — not manufactured product sales. Demand originates from a number of channels including operations, project based construction and enhancement, planned and reactive maintenance. There is typically a significant material portfolio often with slow moving, sporadic demand patterns and material obsolescence issues. Assets typically rely on extremely complex and often poorly maintained asset and material data landscape. Facilities are often remote and therefore suffer from exponentially costly last-mile logistics. The cost of failure to supply is often disproportionate to the cost of the material involved given the skilled resources and expensive equipment that is reliant on material availability. Return supply chains are often neglected despite the significant contingency material supply that is generally built into material planning.
The priorities of asset operators are evolving. Effective maintenance planning and delivery, which historically played second fiddle to the more exciting project construction activity, is now recognised as being a key driver of business value. Data, which was historically little understood and even less appreciated, is now recognised as a key enabler of the opportunities presented by analytics and the connected asset. Equipment is even more sophisticated, asset owners are therefore more reliant on partners and therefore collaborative relationships and information sharing across the supply chain are increasing more important.
To successfully transform an asset-intensive supply chain there needs to be: a deep understanding of assets/parts supply chains, structures and processes; experience and ability to build a business case and identify risks and opportunities; ability to model costs, constraints and volumes in a complex environment for inventory, transport and warehousing; strong communication and change management experience.
The best ways of gaining advantage in an asset-based environment is about being prepared, agile and aligning yourself with partners who can get you where you need to be.
GRA has extensive experience with asset-driven clients in the following sectors:
View GRA’s Asset-Driven Supply Chain presentation.
See who we have worked with in Asset Intensive & Maintenance Repair Overhaul
"After undertaking a broad diagnostic, GRA identified some great opportunities for our business. The GRA team worked effectively with management to prioritise the key areas of focus in terms of inventory reduction, freight cost optimisation, distribution network structure and broader organisational processes such as S&OP."
– Andrew Coventry, Catalyst Investment Managers Pty Ltd