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“Failing to plan is planning to fail” is a popular proverb of unknown origin, but regardless of who said it first, it is certainly true in the realm of MRO procurement. If you do not plan for what your organization is going to need, you’ll almost certainly find yourself missing key products at critical moments.
The phrase is even more apt when applied to potential crises. Failure to plan for supply chain emergencies makes it much harder to respond effectively when they do occur. Rather than following an alternative procedure you’ve already put in place, you’ll be scrambling for a solution. To use another popular saying, you’ll be up the creek without a paddle.
So, how do you plan for crises that could impact your MRO supply chain?
Why MRO Crisis Planning Has Become So Important
The global pandemic changed how the world looked at MRO. Traditionally seen as an expense to be tolerated, suddenly MRO was subject to shortages and price increases. This spotlight brought with it questions about what needs to be done and how to protect a company from supply chain threats.
The situation during the pandemic showed that crisis planning is an essential component of effective MRO management. Not having a very simple part available when you need it can completely shut down a production line, causing disruption, which is more costly than avoiding the risk in the first place.
Proactively planning has become even more crucial as crises have become more frequent. In recent years, global supply chains have been severely affected by everything from the pandemic and wars in Ukraine and the Middle East to financial shocks, such as tariffs, and cybersecurity attacks. Even extreme weather is beginning to have more of an impact.
As crises become business as usual, crisis planning needs to keep pace. You cannot predict when events are going to happen, but you can put plans in place ready to activate should lead times, prices, or product shortages increase significantly. If not, and you continue to operate MRO purchasing in reactive mode, sooner or later you’ll face stockouts and downtime – or you’ll risk having to start relying on less reputable sources for required materials.
Who’s On Your MRO Crisis Planning Team?
The speed and frequency of crises mean you need to understand the potential scenarios you may face and how you would react to minimize the impact. Being prepared could prevent a problem in the outside world from becoming an issue within your business.
To fully understand your risks, and how to mitigate them, make sure different business functions participate in the crisis planning process. Engineering, Procurement, Finance, Operations, Maintenance, Technology, and others all bring different perspectives to the table.
Outside expertise can help, too. Integrators like RS Integrated Supply have extensive experience, large supplier networks, and can share lessons learnt from MRO challenges. It’s the integrator’s job to get critical parts to clients and it is crucial that they know what’s going on across MRO supply chains – and what might happen in the future. RS Integrated Supply, for example, has teams dedicated to understanding what’s happening and how it affects pricing, lead times, and availability. Those findings are shared with clients and internal teams, offering actionable guidance based on real-time intelligence.
How Do You Develop an MRO Crisis Plan?
You cannot foresee every potentially disruptive incident, but you can analyze your MRO supply chain and identify the biggest risks. RS Integrated Supply follows a three-step process:
- Use procurement and inventory data to understand exactly what is being bought, from whom, and from where. Given that MRO data is typically rather poor, it often needs to be cleaned and standardized to improve accuracy.
- Consider the risk factors for each item. What might lead to a product shortage or price increases?
- From there, identify supply chain risks and ways to mitigate them.
This step-by-step procedure creates resilience by first understanding what is actually happening within operations, and where the risks lie, and then considering what levers can be pulled to manage those risks.
If you are just starting out with MRO crisis planning, begin with the most critical SKUs. This includes defining what is critical and what is not. Not all parts are critical. Ask yourself what is going to close your plant if it is missing or unavailable? Also consider any manufactured parts with long lead times or that are made to order. Finally, think safety. If a part were missing or unavailable, would this lead to unsafe conditions for the workforce or the environment?
Once you’re clear about what your critical spares are, pinpoint the supply chain risks for these items. These could be geopolitical, economic, environmental, or logistical. Then you can create a policy to address potential disruption. For example, is part substitution an option? Have you identified multiple sources and defined rules for using them?
RS Integrated Supply can help you to explore different sourcing strategies. For instance, what are the right minimum and maximum levels for critical parts to avoid unnecessary risk without over-correcting and thus overstocking? (Good data is again key).
MRO tends to have a long tail of suppliers, which brings its own challenges but offers an opportunity for supply chain diversification. It is important to engage site teams and clients to pre-qualify both alternative suppliers and alternative products to help ensure supply continuity. Particularly with high usage consumables, there may be three or four identical products on the market. So, if there is a sudden disruption, it is important to have options already approved and available.
What Other Steps Can You Take to Reduce MRO Supply Chain Risks?
Crisis planning is not, unfortunately, a one-off exercise. Plans need to be periodically reviewed to ensure validity given that risks can and do change. Specific issues may ebb away but the process of tracking and communicating risks is always-on – and only improves with better real-time data and intelligence. Steps RS Integrated Supply takes include the continual monitoring of global events, sharing updates on new issues, such as developments in the Strait of Hormuz or at the Los Angeles port, as well as distributing a quarterly Global Procurement Insights Report to clients (Read the most recent issue here).
There are also ongoing practices you can introduce to help alleviate supply chain risks and avoid external crises affecting your MRO procurement. These can be particularly useful during times, like now, of heightened volatility.
- Rethink how you operate
If you have maintenance planned and are pulling items off the shelves that trigger your minimum reorder level, go ahead and order replacement parts so you minimize any chance of delays or disruption. Work with maintenance teams to understand what they are doing and what they are going to need.
- Introduce condition monitoring to get ahead
Using condition monitoring to support a move away from reactive maintenance lessens pressure on the supply chain because you have a clearer idea of what products are needed and when. It’s unexpected issues that are hardest to handle in a crisis.
- Have conversations about what is happening within your organization
What’s going on in the next six months? What about the next three years? Do you have any shutdowns planned? What’s the life cycle of key equipment? Are you planning to decommission machinery and bring in something else? In all these situations you will need to have the right spare parts in place while avoiding overstocking or obsolescence.
- Consider the most effective ways to communicate with stakeholders about what is going on
Communication with stakeholders is vital, both during a crisis event and when you’re experiencing periods of uncertainty. Sharing information allows other parties to act quickly and with clarity. For example, as soon as US tariffs threatened to affect prices in the MRO supply chain, RS Integrated Supply put together a task force to share information not only with clients but also site teams about how to mitigate risks and what plans are in place, upstream and downstream.
- Develop strong supplier relationships
Effective communication with suppliers is also vital. Having those strong relationships leads to more confidence in information shared and decisions made. Supplier relationship management programs are key for RS Integrated Supply right now. It is partnerships that keep costs down and products in stock, whatever is going on in the world.
What If the Worst Happens?
The goal of MRO crisis planning is to reduce the impact of supply chain disruption on your operations. By understanding the risks you face, you can better mitigate against them. If, or when, there’s a situation that could cause problems, you already have an alternative course of action in place ready to implement. You won’t find yourself missing the specific screw or O-ring needed to fix that essential piece of equipment.
Frequently Asked Questions
MRO crisis planning is the process of identifying potential supply chain risks, evaluating their impact on operations, and developing strategies to maintain access to critical MRO materials during disruptions.
Unexpected events such as supplier shortages, geopolitical conflicts, tariffs, cybersecurity incidents, and extreme weather can disrupt the availability of critical spare parts. Effective crisis planning helps reduce stockouts, downtime, and unplanned costs while also easing state of mind for those involved.
Incomplete, duplicate, or inaccurate MRO data makes it difficult to understand what parts are being purchased, where they are sourced, and which items are most critical. Data cleansing and standardization improve visibility and support better risk management decisions.
Critical spares are inventory items whose absence could stop production, create safety risks, extend equipment downtime, or significantly impact business operations. Identifying these parts is a key step in building a resilient MRO supply chain.
Organizations can reduce risk through improved inventory management, alternative sourcing strategies, supplier diversification, condition monitoring, proactive maintenance planning, and stronger supplier relationships.
An integrated supply partner can provide supply chain intelligence, data management expertise, inventory optimization, supplier network access, and sourcing strategies that help organizations anticipate and respond to disruptions more effectively.
Inventory optimization helps organizations maintain appropriate stock levels for critical items while avoiding excess inventory. This balance supports operational continuity without unnecessarily increasing inventory carrying costs. It also creates an organized and efficient way to manage material flow in and out of the storeroom. It means less time is spent searching for materials and more time fixing equipment.