Disruptive innovation, compressed product life cycles and changing consumer expectations are driving companies to become more efficient. With this comes an increased focus on enterprise asset management and reliability. This has caused a shift in industry from a segmented, functional department perspective towards a fully integrated end-to-end model.
SDI is the first to develop a true end-to-end supply chain management platform that takes into consideration how MRO (maintenance, repair and operations) impacts the rest of the supply chain and the enterprise overall.
Traditional integrated supply simplifies purchasing and inventory practices by consolidating a company’s supply base through a single source, allowing the company to focus on core business activities and produce more efficient results.
While traditional integrated supply eliminates several steps in the segmented supply model, there are still missing links in the supply chain — links that enable manufacturers to identify and correct redundancies.
Much like the supply chain for direct materials, the MRO supply chain includes the design, planning, execution and control (or maintain) components, as well as monitoring the supply chain activities. The MRO supply chain most often interacts with the direct supply chain between the planning and execution stages, with the objectives of mitigating risk, reducing costs and creating measurable value. This strategic, collaborative approach in the supply-chain-as-a-service model delivers harmony between MRO supply and demand, supporting reliable production.
A holistic approach
“We provide end-to-end supply chain management as a service, focused on MRO for large multisite clients that are capital intensive,” says Jim Owens, Senior Vice President of Business Development for SDI. But one key differentiator for SDI is that it does not just focus on certain elements of the supply chain.
“It’s a platform of people, technology, and processes that we provide to our clients as a service to manage the MRO supply chain holistically,” Owens continues. “It helps them achieve greater visibility and overall equipment effectiveness in a more sustainable way, whereas solutions that are designed just for one particular element in the MRO supply chain might only offer short-term savings and no long-term value.”
MRO in the hands of professionals
According to a 2008 study by Frank Lynn and Associates, U.S. manufacturers spend approximately $125 billion a year on MRO purchases. The high demand mix of parts required for increasingly complex production lines leads to a high incidence of obsolete inventory. This, combined with a highly transactional market for low value, high volume spending makes for a fragmented, increasingly globally distributed supply base.
“For many large multi-site clients, often times MRO is a neglected, underfunded and under-resourced area of the business,” Owens says, adding that in situations like this the MRO process can become fragmented and decentralized—and processes like this are often not operating at their best or most efficient.
“We strip all that out and focus on delivering value from an end-to-end perspective,” he explains. “The value comes from eliminating waste and defects in supply chains, reducing costs substantially, and enabling reliable production by making sure the right parts are there when they’re needed and in the right condition,” Owens says.
Working with the client’s best interests at heart
How does SDI set itself apart from the competition? One of the most important factors is its 40-plus years in business, which have given the company expertise in a number of key industries. Another is its deep commitment to working alongside clients as true partners.
“We have a dedicated staff of reliability engineers that work directly with our clients in a collaborative fashion, helping clients enable sustainable production by eliminating unexpected equipment downtime and improving MRO process reliability — all while reducing the total cost of MRO,” says Owens.
If a part is failing and needs maintenance, SDI is able to undertake a root cause analysis and tackle the issue from multiple angles, whether it’s finding an alternative or re-engineering an existing part.
SDI serves its clients through a pure play relationship: This means they are supplier neutral and are not a distributor, but rather an extension of their clients’ businesses. They sit side-by-side with clients to understand their business process to better assess and meet their MRO needs, without bias or any internal conflict. SDI’s goal is to lower the total cost of ownership of their production assets, improve overall equipment effectiveness and lower parts consumption.
This differs greatly from other integrated MRO providers whose primary business and revenue models are focused on making money by selling specific lines of products to clients, regardless of need or expanding inventory levels.
“Our business model today is a supply-chain-as-a-service platform — we’re not selling parts, we’re not selling supplies, and we don’t make money off transactions,” says Owens. “We like to think we sit on same side of the table as our client, driving continuous improvement and creating value year after year and decade after decade.”
Looking toward the future, SDI sees plenty of potential in its capacity to create value for an ever-expanding clientele.
The industrial internet of things, 3D printing, cloud computing, machine learning and predictive analytics are driving changes in manufacturing processes and technologies that are leading to an even more complex and dynamic MRO supply chain.
“Manufacturing is going through an evolution, and our clients and prospects are looking for more than just service: they want us to be able to impact their business outcomes directly,” says Owens, noting that its operations must become more predictive to anticipate where problems could arise within their clients’ supply chain systems. Added efficiency measures like remote monitoring, 3D scanning and 3D printing on site are already going a long way toward improving productivity while cutting down on costs, saving time and money for SDI and its partners.
As the market continues to evolve and grow, SDI is committed to observing trends in manufacturing in order to anticipate and meet the future needs of its clients.