Everything you need to know about Maintenance, Repair & Operations procurement and how to do it better

If you are in the manufacturing or construction industry or any other industrial sector in India, you may have faced the challenge of acquiring the appropriate tools, equipment, or spare parts, or any other required resources at the appropriate time. This is what MRO procurement is all about, and it is an aspect that makes a real difference to any business’s bottom line. In this blog, we will try to explain what MRO procurement is, its importance for industries in India, and how it can be managed strategically.

What is MRO Procurement?

MRO is an acronym for Maintenance, Repair, and Operations. MRO procurement is the process of acquiring or purchasing everything that is required for the smooth running of an industry or business, but is not included in the final product itself. To simplify this further, if an industry is in the business of making car parts, it will need raw materials such as steel or rubber for making those car parts. But it will also need lubricants for its machinery, safety gloves for its workers, electrical cables for its machinery, cleaning agents for its factory floor, spare parts for its motors, and many other things simply to keep the factory running. All of that is included under MRO.

Common MRO Categories Include:

Maintenance supplies – Lubricants, greases, cleaning agents, filters

Repair components – Bearings, belts, seals, fasteners, motor parts

Operations essentials – Safety equipment, PPE, electrical fittings, lighting

Facility management – Single Core House Wires, FRLS Cables , janitorial supplies

Tools and equipment – Hand tools, power tools, measurement equipment

MRO vs. Direct Procurement: What's the Difference?

Direct Procurement refers to the buying of materials that are used directly in the final product. For instance, a furniture company buys wood and screws to make chairs. It is planned, budgeted, and expected.

MRO Procurement refers to the buying of everything else that allows your business to run but does not go into the final product. For instance, the same furniture company buys lubricants for their machines, safety gloves for the workers, or a motor for the machine when it breaks down. It is unplanned and unexpected.

The One Line Difference:

MRO = you're buying to keep running

Direct – You are buying something because you are making something.

Why MRO Procurement Matters for Indian Industries?

India is among the world's fastest-growing industrial nations. Industries such as the automobile sector, pharmaceutical industry, textile industry, food processing industry, and construction industry are booming. The demand for industrial MRO supplies is enormous and growing. The demand for MRO supplies is increasing in the Indian industry. MRO procurement in India is in a disorganized and fragmented state. Most companies in the Indian industry depend on local vendors and hardware stores for MRO supplies. This has resulted in:

Unexpected Downtime

The Indian industry faces unexpected downtime. Downtime in the Indian industry may cost anything between ₹50,000 and several lakhs per hour, depending on the industry. One of the major hidden causes of unexpected downtime in the Indian industry is the poor MRO procurement strategy.

Overspending and Inventory Bloat

Most companies in the Indian industry tend to spend more on MRO supplies due to the lack of a proper MRO procurement strategy.

Supplier Fragmentation

A medium-sized factory in India may typically have around 50-100 different MRO suppliers. Managing such a high number of relationships creates administrative issues and inefficiencies in quality and pricing.

Lack of Price Transparency

Unlike direct materials, MRO products do not have a standard market price. This allows businesses to unwittingly overpay for MRO services.

How Indian Businesses Can Improve MRO Procurement?

Consolidate Your Vendor Base

Dealing with a single MRO platform instead of multiple local vendors can simplify things, as well as often provide better pricing due to volume discounts.

Go Digital

Several online B2B platforms are catering to industrial MRO needs, such as IndustryMRO, which allows MRO procurement teams to compare products, check specifications, and verify prices before ordering products.

Classify Your MRO Items

Not all MRO items are of equal importance to a company. For example, an MRO item can be classified as an A item, which means it is high-value, or a B item, which means it is low-value.

Track Consumption Patterns

Tracking how frequently MRO items are consumed can help MRO procurement teams make better purchasing decisions, which can also help them negotiate better prices with their suppliers.

Standardize Specifications

Dealing with a variety of specifications of a particular item can become complicated if each department in an organization purchases a particular item from a different vendor, with a different specification each time.

The Rise of Online MRO Procurement in India

The B2B e-commerce market in India is experiencing a robust growth curve, with the industrial procurement market being one of the key contributors. Today, there is a growing need for:

Verified product catalogues with accurate specifications

GST-compliant invoicing for easy accounting

One-stop shop for a variety of products

Timely delivery of products to industrial locations across India

IndustryMRO (www.industrymro.com) is a platform created to cater to the needs of the industrial procurement market, with a specific focus on the B2B segment, offering a variety of industrial MRO products across categories such as electrical, mechanical, safety, and facility management, amongst others.

Conclusion

While MRO procurement may not be as glamorous as other forms of sourcing, it is essential for the proper running of industries. A well-managed MRO strategy is a must-have for any industry.

As India's industrial sector continues to grow, companies that can better manage their MRO procurement strategy will be at a competitive advantage. Whether you're a small industry in Pune or a large industry in Gujarat, the time for MRO is now.

Looking for a trusted MRO procurement partner? Browse through our catalogue at industrymro.com, India's growing B2B online platform for industrial MRO supplies.