MRO processes are critical in production-intensive operations since they directly affect maintenance workflows, asset management, manufacturing processes and ultimately, profitability.
Due to the scale of operations, fragmented decision-making, inherent delays in procurement and maintenance tasks; various inefficiencies are introduced in MRO, each with their unique challenges, many of which are also specific to, more common or exacerbated in certain industries.
In this piece, we will showcase some of the more common MRO-specific challenges and how some innovative approaches can help drive tangible
Disclaimer: Verdantis specializes in software solutions for MRO and Enterprise Asset Management, while we like to think that we keep an unbiased view of our products, there may be an element of bias in some of the suggestions below.
Spend Analysis
Almost all asset-intensive orgs have some processes and solutions in place to crunch analytics and spends at an organizational-level. These spends, especially in manufacturing enterprises, are often crunched for direct materials, semi-finished goods, logistics and even packaging materials.
The same analysis for MRO spends can get tricky due to the inherent complexities, nature of MRO processes and fragmented data-points.
Some of these analyses include:
According to a repost published by Mordor Intelligence, on spare parts logistics market size,
Global studies show average factory inventories exceed EUR 109 million (USD 120.29 million), with 41% of parts never used; cross-company pooling cuts procurement cost by 13% and inventory cost by 21% as parts data move into shared catalogs.
1. Supplier Consolidation
This method crunches the spends of the same spare parts or assets across different suppliers, analyses the volume of spends for the same part or asset with the aim to standardize pricing from a single supplier or to consolidate requirements and secure bulk-pricing.
2. Demand Forecasting
Analysis of past spends based on production volume, demand for certain spare parts, MRO services, fixed assets or any other upkeep requirements can be measured and planned for in the future with pre-negotiated supplier contracts.
3. Spends by Location
Production units or facilities in the vicinity of each of other, or in the same city, state or country can enjoy the benefits of centrally negotiated supplier contracts that can drive measurable cost-savings
Reliable Multi-Domain MRO Master Data
Master Data Management has been a broad subject and the discipline itself has been around for years. The discipline, and its requirements, are heavily dependent on the industry, and in MRO as a category has largely remained static over the years.
Despite leaps in technologies, master data solutions for MRO management have been slow evolve and, in legacy industries, the state of data-capabilities are quite poor.
Reliable, Complete and Clean data made available in real-time is the backbone for any digital transformation initiative, especially those that can drive process improvement and tangible cost-savings.
Master Data Domains Specific to MRO typically includes;
- MRO Materials Master Data
- Fixed Asset Master Data
- Supplier Master Data
- Service Master Data
A well thought out and orchestrated multi domain MDM strategy specific to MRO use-cases have a solid potential to drive operational excellence for asset-intensive operations.
This includes
- Integration of different master data models
- Integration of Data Sources with Master Data
Inventory Management in MRO
Despite cutting-edge technologies like modern CMMS and EAM Software, inventory management of MRO spare parts continues to be an avenue riddled with inefficiencies and, also one where enterprises can build autonomous processes to drive efficiencies in MRO Procurement.
The objective of an MRO inventory management software is primarily to;
- Ensure Critical Spare parts are adequately stocked, with buffer quantities
- To minimize holding of excess inventories
The idea being that instance of prolonged downtime due to unavailability of critical spares are kept to a minimum and overheads due to overstocking are also controlled.
Asset and maintenance management systems that automate spare parts management have been around since a few decades, but only a handful of them really automate the process in any meaningful manner.
But the ability of software and information systems have been completely augmented, with AI agents, such that MRO inventory management can now run intelligently, since these agentic models are “context aware”.
Of course, this also requires that the software is fed with large volumes of relevant data and is also continuously trained on industry-specific and use-case specific information.
A few things that MRO software can do today with context-aware agents,
- Assess Criticality of Fixed Assets and linked Spare Parts
- Categorize the nature of spare part (fast moving, slow moving, Rotable)
- Identify the Obsolescence Status (Active, Obsolete)
- Forecast demand of certain MRO spares based on production activity, past-consumption, predictive maintenance triggers etc
As reported by IBM in a study on duplicate enterprise data:
Organizations that manage spare parts inventory strategically can unlock significant benefits. This approach can lead to a 50% reduction in unplanned downtime, 40% lower inventory costs, and up to a 35% cut in maintenance budgets. It also delivers around a 25% improvement in service levels, boosting responsiveness and reliability in maintenance operations.
While there are open challenges specific to data availability, clean data and purpose-training several AI agents, it’s quite possible to automate or “Semi-Automate” most MRO inventory management processes, including procurement of MRO parts, link them to suppliers and more.
Inventory360 is Verdantis’ flagship software solution that automates critical inventory management processes specific to maintenance operations that can drive excellence in procurement operations.
Digital Or Cognitive Procurement
An e-Procurement platform is a digital tool or system that automates the procurement process – from requisition to payment. In MRO, where purchases are frequent, generally, low-cost, and diverse, e-procurement helps bring control, visibility, and efficiency.
Here are the core components of an e-procurement platform:
In MRO environments, parts catalogs can quickly become unwieldy, with duplicate entries, inconsistent descriptions, and missing specifications.
A centralized, digital catalog standardizes and classifies all MRO items, ensuring that maintenance and procurement teams always have access to correct part details, approved sourcing information, and standardized naming conventions.
This not only prevents maverick spending but also improves accuracy in ordering and speeds up part identification for urgent requirements.
Frequent MRO purchases require a structured process to ensure speed without sacrificing control.
Automated requisition and approval workflows route requests to the appropriate stakeholders based on factors such as urgency, cost, asset criticality, and departmental budgets.
This ensures critical spares can be fast-tracked for approval while routine consumables follow standard routing, creating a balance between operational responsiveness and compliance.
Supplier performance and responsiveness directly influence MRO uptime. Integrated supplier portals provide vendors with a real-time channel to receive purchase orders, confirm delivery dates, upload compliance documentation, and share shipment updates.
This reduces back-and-forth communication, increases transparency, and allows procurement and maintenance planners to make faster, better-informed decisions when schedules change.
The high transaction volume of MRO procurement increases the likelihood of invoice mismatches, duplicate charges, or delayed payments.
Automated three-way matching between purchase orders, goods receipts, and invoices eliminates most manual checks while flagging discrepancies for review.
Faster, more accurate payment cycles improve supplier trust and support stronger long-term commercial relationships.
Manual purchase order creation in high-volume MRO environments is inefficient and error-prone.
Automated systems can convert approved requisitions into purchase orders instantly, or trigger them automatically when inventory levels fall below pre-set thresholds.
This is particularly valuable for recurring requirements like filters, lubricants, or fasteners, where lead times need to be minimized to prevent maintenance delays.
Procurement in MRO produces a wealth of transactional data, but without consolidation and analysis, it remains underutilized.
Advanced analytics in e-procurement platforms consolidate spend data across sites, track supplier performance, and identify process bottlenecks.
Insights gained from this data can be used to renegotiate contracts, adjust stocking strategies, and better align procurement actions with maintenance and production priorities.
Predictive Maintenance & AI
The traditional MRO procurement model is built on reaction. Something breaks, someone scrambles, and procurement races against downtime to find and deliver a replacement.
It’s inefficient, stressful, and expensive – especially when critical assets are involved and results in Maverick Spending.
According to cross-industry benchmarking data from APQC,
Maverick or unmanaged spending, accounts for an average of 7.4% of total procurement spend across organizations.
But with the rise of predictive maintenance and Internet of Things (IoT) integration, a shift is underway.
Procurement no longer must wait for a failure to act.
Instead, sensors, analytics, and connected systems enable a forward-looking approach, where MRO needs are forecasted and fulfilled before a breakdown occurs.
In a standard example, here’s how predictive maintenance practices can empower procurement teams with the right alerts, at the right time, thus empowering them with best-in-class procurement practices.
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Step 1: Real-Time Data Collection
Industrial assets are equipped with IoT sensors that continuously track key operational metrics, such as vibration, temperature, and pressure, and transmit this data to centralized analytics platforms.
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Step 2: Anomaly Detection & Predictive Modeling
AI and machine learning models analyze real-time and historical data to detect patterns that precede component failures. The system learns to recognize subtle signs of wear or performance degradation.
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Step 3: Early Failure Forecasting
Once an anomaly is identified, the system estimates when the component is likely to fail, days or even weeks in advance. This forecast is communicated to maintenance and procurement teams.
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Step 4: Automated Requisition Trigger
Based on the prediction, a digital requisition is automatically generated through the e-procurement platform. No manual request is needed, the system initiates just-in-time sourcing.
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Step 5: Prioritization Based on Asset Criticality
The system evaluates asset importance (production impact, redundancy, downtime risk) using data from CMMS and ERP tools. Critical assets are prioritized for faster fulfilment and stock reservation.
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Step 6: Supplier & VMI Integration
In advanced setups, predictive alerts are shared directly with suppliers. This enables Vendor-Managed Inventory (VMI) or automated order fulfillment, improving response times and supplier coordination.
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Step 7: Optimized Inventory & Reduced Waste
Because parts are ordered based on actual, anticipated need, not worst-case guesswork, inventory levels can be reduced. This avoids excess stock, cuts carrying costs, and frees up warehouse space.
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Step 8: Continuous Feedback & System Learning
As repairs are made and parts consumed, data flows back into the system. This feedback loop improves prediction accuracy over time, refining both maintenance and procurement decisions.
Total Cost of Ownership (TCO) Approach
TCO refers to the sum of all direct and indirect costs associated with acquiring, operating, maintaining, and disposing of a product or service. In MRO procurement, this includes:
- Initial purchase cost of spare parts, tools, and supplies.
- Logistics and storage costs, including warehousing and inventory carrying costs.
- Maintenance and repair expenses, including technician labour and downtime costs.
- Operational impact, like productivity losses from equipment failure.
- Administrative overhead, such as procurement process costs, vendor management, and invoice processing.
- Obsolescence and disposal costs of unused or expired MRO items.
Adopting the TCO approach in an MRO context shifts the focus from price-based procurement to value-based sourcing, helping organizations optimize reliability, minimize downtime, and reduce long-term maintenance costs.
Lifecycle Analysis:
Evaluates how long a component lasts and its maintenance profile:
This involves looking beyond purchase price to understand the part’s durability, expected wear patterns, and maintenance needs. By assessing how often a component requires servicing or replacement, procurement can focus on options that deliver the best long-term performance.
Example: A premium-grade bearing may cost more upfront but lasts twice as long as a standard one, reducing replacement frequency and labour costs over the asset’s life.
Prioritizes durable, higher-quality parts over cheaper, failure-prone alternatives:
A low-cost component may seem attractive initially, but if it fails frequently, the cumulative repair, downtime, and replacement costs can outweigh savings. Prioritizing proven, durable parts increases reliability and reduces the risk of production stoppages.
Example: Using corrosion-resistant fasteners in outdoor equipment prevents premature failures and lowers total replacement needs over the equipment’s lifecycle.
Vendor Consolidation
Reduces administrative complexity and leverages volume discounts:
Managing a large supplier base increases paperwork, approvals, and time spent on procurement activities. Consolidating vendors simplifies processes and allows the organization to negotiate better terms through higher purchase volumes.
Example: Instead of sourcing filters from five different suppliers, consolidating with one preferred vendor can secure better pricing and streamline purchase orders.
Streamlines support and warranty claims:
With fewer suppliers, warranty or service issues are easier to manage. A single point of contact speeds up resolution, reduces disputes, and ensures consistent service levels.
Example: When a motor fails, working with one supplier allows for quicker warranty replacements without juggling multiple contracts.
Inventory Optimization
Minimizes excess stock and stockouts using usage-based forecasting:
By tracking historical usage and adjusting for seasonal or operational demand changes, procurement can ensure the right amount of stock is held. This avoids tying up capital in unused items while reducing the risk of critical shortages.
Example: Tracking consumption patterns of critical pump seals helps maintain just enough stock to avoid production stoppages without overstocking.
Balances holding costs with risk of equipment downtime.
Some parts are expensive to store, but their absence during a breakdown could be far costlier in lost productivity. Effective inventory strategy weighs these trade-offs to find the optimal stock level.
Example: Keeping one spare gearbox in inventory may seem costly, but it prevents days of lost production if the installed one fails unexpectedly.
Standardization
Uses fewer, standardized SKUs across plants or business units:
Standardizing parts reduces purchasing complexity and ensures compatibility across locations. It allows bulk buying and eliminates the inefficiencies of managing a large variety of similar items.
Example: Standardizing on a single model of industrial sensor across all facilities simplifies procurement and ensures spares fit all applications.
Simplifies training, maintenance, and supply chain complexity:
When maintenance teams work with the same components across multiple sites, training is faster and repair work is more consistent. This reduces errors and speeds up turnaround times.
Example: Technicians trained on one type of valve can service equipment in any plant without additional training for multiple variants.
Reliability-Centered Procurement
Selects MRO items based on failure rate, criticality, and asset impact.
This approach ensures procurement focuses on components that directly affect operational reliability and uptime. Decisions are informed by reliability data rather than just price.
Example: Choosing a higher-grade lubrication system for a critical conveyor line reduces unplanned stoppages and extends component life.
Supports predictive maintenance and uptime assurance.
Procuring items that enable predictive maintenance, such as condition monitoring tools, helps to identify issues early and plan repairs before failures occur, minimizing downtime.
Example: Procuring vibration sensors for key rotating equipment enables early fault detection, preventing catastrophic failures and costly downtime.
TCO Analysis with an Example;
Item | Cheapest Vendor | TCO-Based Vendor |
Bearing | $5 (low quality) | $12 (high reliability) |
Expected Failures/Year | 6 | 1 |
Downtime Cost/Failure | $500 | $500 |
Total Annual Cost | $3,030 | $512 |
In MRO procurement, the TCO approach transforms sourcing from a cost-center mindset into a strategic value driver. It aligns procurement goals with maintenance, engineering, and operations to support overall asset performance and organizational efficiency.
Contract Intelligence and Compliance with Cognitive Assistants
Like in most procurement processes, Contract Management is key to drive and nurture the right relationships across suppliers and service providers.
Given the complex nature of MRO processes, managing vendor and supplier contracts are critical to build successful engagements and with the rise of intelligent Agentic AI systems, Cognitive Assistants, are the hot new thing that can assist with identifying cost-saving and value-generating opportunities through MRO procurement processes.
Conclusion
MRO is no longer just a back-office maintenance expense, it is a strategic lever for operational resilience and profitability.
The enterprises that will lead in asset-intensive industries are those that integrate predictive maintenance, AI-driven procurement, and multi-domain master data into a unified MRO strategy.
The data is clear: cleaner master data accelerates automation, predictive models slash downtime, and TCO-based sourcing transforms procurement from a cost sink into a competitive advantage.
Yet, these gains are only possible when processes are redesigned end-to-end, breaking silos between maintenance, procurement, and asset management, and enabling decisions to be made from a single source of truth.
With innovations like context-aware AI agents, cognitive procurement assistants, and real-time supplier integrations, MRO operations can evolve from firefighting breakdowns to orchestrating performance.
For organizations ready to modernize, the payoff is tangible: lower costs, fewer disruptions, longer asset lifecycles, and a procurement function that actively drives enterprise value.
What makes MRO procurement different from direct material procurement?
MRO procurement deals with spare parts, tools, consumables, and services that support operations but are not part of the final product. It is typically more frequent, more fragmented, and more complex due to diverse suppliers, smaller transaction values, and unpredictable demand patterns.
How does predictive maintenance impact MRO efficiency?
Predictive maintenance uses IoT sensors and AI to forecast equipment failures before they occur. This allows procurement teams to source required parts proactively, reducing downtime, minimizing urgent orders, and optimizing inventory levels.
What role does supplier consolidation play in MRO cost savings?
Supplier consolidation helps secure better pricing, reduce administrative overhead, standardize quality, and improve supplier relationships. It also simplifies contract management and enables more effective spend analysis.
How do e-procurement platforms improve MRO operations?
E-procurement platforms centralize catalog management, automate requisition and approval workflows, integrate with suppliers, and provide analytics for better decision-making. This leads to faster sourcing, reduced errors, and improved compliance.
What industries face the most severe MRO challenges?
Industries with high asset intensity, such as oil & gas, manufacturing, utilities, transportation, and mining, often experience the most severe MRO challenges. The scale of their operations magnifies the impact of poor data quality, unplanned downtime, and inefficient procurement workflows.
How can predictive maintenance reduce maverick spending in MRO?
By predicting part failures before they occur, predictive maintenance enables planned procurement instead of urgent, last-minute buys from unapproved vendors. This reduces unmanaged or “maverick” spending and strengthens compliance with sourcing policies.
What role does supplier performance monitoring play in MRO success?
Tracking supplier performance metrics, such as on-time delivery, lead time consistency, quality compliance, and responsiveness, allows organizations to proactively manage relationships and renegotiate terms. High-performing suppliers directly contribute to reduced downtime and cost efficiency.
