Outside track: Millions "written off" due to maintenance supply issues
15 Mar 2024
ERJ’s 'Outside track' reports cover developments across the wider manufacturing and process industries
London – The main causes of downtime in UK manufacturing businesses in 2023 involved issues around spares-availability and lead-times, according to a report by Eriks.
Industrial services provider carried out the study into the maintenance, repair and operational (MRO) supply-chain in association with the London-based Institute of Engineering & Technology.
Based on an extensive survey, the analysis of MRO procurement, the engineering stores function, and the MRO supply-chain, provided new insights crucial for operational efficiency, said Eriks.
Among the revelations the report makes, for the first time a direct link is made between unscheduled downtime and the operation of the engineering stores, the supply chain, and the MRO procurement function.
A further revelation covered in the report is that UK manufacturers businesses are collectively writing off millions of pounds of MRO stock every year.
Comparisons between data collected in 2016 and 2023 show that oversight in this area has declined markedly largely as a reaction to Brexit, the global pandemic and more recently the conflict in Ukraine.
Stockpiling in response to these events has resulted in businesses both tying up cash in inventory and writing that investment off as products age or go unused, said the report.
Another finding highlighted the issue of 'squirrel stores', a term used for when engineers build their own private stock of MRO equipment.
Some 55% of respondents declared this to be a significant issue, which can have major ramifications for the accuracy of data about supply-chain performance.
“While seemingly innocuous the presence of ‘squirrel stores’ sadly brings into focus the lack of trust that engineers have with their stores and purchasing teams,” commented Eriks.
“Some of the findings, when we compared 2016 data to that found in the 2023 survey, were a little sobering,” said Paul Lynch, chief commercial officer for Eriks in the UK and Ireland.
According to Lynch, the direct link to downtime and the sheer monetary value of stock being written off “were really astounding.”
On a more positive note, the Eriks executive said most businesses were exploring potential improvements, such as outsourcing.
They were also, he said, looking to enhance their operations by recognising the value and embracing technical and supply chain knowledge directly available to them.
Lynch concluded: “The fact is that the whole MRO supply-chain, procurement and engineering stores area is one that businesses have tended to ignore in the past.
“This report, we believe, highlights the danger of doing that and brings to the fore the huge gains if this area is brought up to world class standard.”
Read the full report
