Insight

Outsourcing the MRO supply chain

Building the business case for vendor managed inventory

Brian Higgins

Brian Higgins

Principal, Supply Chain & Operations Leader, KPMG US

+1 312-665-8363

Yatish Desai

Yatish Desai

Principal, Advisory, Supply Chain & Operations, KPMG US

+1 216-875-8129

The future of the MRO supply chain

Good maintenance, repair and operations (MRO) inventory management is expensive, but bad MRO inventory management is even more expensive. Inconsistent maintenance planning, poor data quality, and loose purchasing controls are some of the main challenges that supply chain leaders face when managing MRO inventory.

How do you ensure that you have the right parts in the right place at the right time—and decrease operating expenses?

It’s a question that MRO supply chain leaders are consistently evaluating to determine if they have the people, processes and technologies to run their operations, and be prepared for the future. Is outsourcing your MRO inventory the right move for your organization? When building a business case for a Vendor Managed Inventory (VMI) partnership, you must consider three other value-add services offered by your MRO supply chain, such as:

  • advanced forecasting
  • predictive analytics
  • enhanced reporting capabilities.

VMI is not just inventory management as-a-service, a VMI partnership is an investment in the capabilities of your supplier to drive a competitive advantage for your MRO supply chain. The VMI insures you have the right parts, in the right place, at the right time. Explore in our paper the total cost of managing your MRO inventory including:

  • direct and indirect labor benefits
  • working capital optimization
  • shrinkage and obsolescence avoidance
  • reduced equipment downtime
  • increased purchasing power
  • decreased mortgage or lease cost.
Outsourcing the MRO supply chain
Building the business case for vendor managed inventory

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