Preparing for MRO Shortages in Electronics Manufacturing During the Coronavirus

With coronavirus cases on the rise worldwide, electronics manufacturers need to consider their maintenance, repair, and operations (MRO) supplies and existing supply chains. Procurement intelligence firm Beroe recently reported that the global health crisis had a significant negative impact on MRO providers’ productivity and M&A activity. Consequently, OEMs and CMs could face a dearth of critical production equipment like protective eyewear, face coverings, gloves, and hard hats in the near future.

Such a shortage would inevitably result in production lines slowing or stopping altogether. However, there are steps electronics manufacturing can take to prepare for a coronavirus related MRO shortage.

Expand the Supply Chain Ecosystem to Include MRO

One of the first things OEMs and CMs should consider in maintaining MRO supplies is building a geographically diffuse and technologically enhanced supply chain. This will help maximize organizational resiliency. Operating within a digitally connected cross-industry partner network cuts costs, reduces risk, and improves profitability for all participants. Procurement specialists should understand supply chain ecosystems are incomplete if they lack adequate MRO sourcing.

If an electronics manufacturer unexpectedly runs out of masks or protective eyewear, they cannot commence work as scheduled. As a result, the firm’s outgoing shipments might be delayed, which could upend their clients or retailers’ product launches. In fact, MRO supply chain inefficiencies reportedly cause 42 percent of unscheduled downtime occurrences.

For that reason, companies must include regular and alternate MRO suppliers in their ecosystems to ensure holistic stability. SCMs should also integrate an electronic components e-commerce marketplace into their enterprise resource management platforms (ERM) to increase their resilience. Platforms such as Sourcengine give firms the ability to browse and order parts and safety gear for a variety of providers from within their ERMs.

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Related: Maintenance, Repair and Operations (MRO) Equipment Procurement

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Lower MRO Reorder Thresholds

One of the best ways to prepare for a forthcoming scarcity period is to accumulate a surplus of MRO equipment. When it comes to MRO, companies can get a sense of their future supply needs by analyzing their old ordering patterns. By doing so, firms can stockpile their most used spare components and personal protective equipment (PPE).

Electronics manufacturers should also lower their automatic reorder thresholds for important but not critical MRO supplies to avoid future chokepoints.

Having endured the first wave of the coronavirus pandemic, companies are understandably wary of making large near-term purchases. However, with the holiday quarter drawing closer, OEMs and CMs cannot afford to stop production because they ran out of crucial replacement parts or pieces of disposable gear.

Perform Thorough and Regular Preventative Maintenance

Electronic manufacturers can also protect themselves from the negative impact of an MRO shortage by performing thorough and regular preventative maintenance. Adhering to a rigid equipment inspection and repair program can prevent expensive machinery breakdowns and optimize usage lifespans. Such initiatives also indicate what kind of spare parts will be needed in the near, medium, and long-term.

In the current economic environment, firms might defer scheduled equipment maintenance to save on expenses. But Supply Chain Management Review notes that delayed repairs can cost up to 30 times more than regular restorations. As well as the direct cost of replacing broken parts, companies also lose money by temporarily suspending manufacturing to perform repairs.

There is never a good time for a manufacturer to give customers reason to doubt the ability to meet production deadlines. However, the pandemic and global recession make incurring reputational damage especially perilous right now.

Despite the modest near-term financial impact, preventative maintenance is necessary for proper MRO management.

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The sudden onset and rapid spread of the coronavirus pandemic caught the entire planet off-guard. But electronics manufacturers can prepare for its seemingly imminent second wave by shoring up their MRO supplies and procurement methodologies today.

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