UK manufacturers writing off millions due to MRO supply chain issues claims ERIKS report

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A report carried out by specialised industrial service provider ERIKS reveals that every year millions of pounds are being written off by UK manufacturers due to maintenance, repair and operations (MRO) supply chain issues.

Based on a survey carried out in association with the Institute of Engineering & Technology, the Maintenance, Repair and Operational (MRO) Supply Chain report - which covers MRO procurement, the engineering stores function, and the MRO supply chain - shows that in 2023 the main causes of down time in UK manufacturing businesses were spares availability and lead time issues.

Amongst other key findings, the report identifies a direct link between unscheduled downtime and the operation of the engineering stores, the supply chain, and the MRO procurement function.  

A further revelation is that UK manufacturers 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 and that stockpiling, undertaken as a reaction to Brexit, the global pandemic and more recently the conflict in Ukraine, has resulted in businesses both tying up cash in inventory and writing that investment off as products age or go unused. The serious issue of MRO product obsolescence is covered in detail in the report. 

Another finding highlights the issue of so-called 'squirrel stores' which occur when engineers build their own private stock of MRO equipment, a  finding which brings into focus an apparent lack of trust that engineers have with their stores and purchasing teams.   

As well as highlighting the problems that are being faced by UK businesses the report also provides some guidance as to how improvements can be made, and highlights several critical insights crucial for operational efficiency.  “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,” said Paul Lynch, Chief Commercial Officer for ERIKS in the UK and Ireland. “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 HERE