The largest challenge for procurement professionals is the need to reduce operational budgets ©123RF
The largest challenge for procurement professionals is the need to reduce operational budgets ©123RF

Less than 10% of firms have internet of things MRO strategy

27 November 2018

Just 7% of firms have a strategy in place to use the industrial internet of things (IIOT) for maintenance, repair and operations (MRO), according to a survey.

Research by RS Components and CIPS said IIOT had “huge opportunities” for improving asset performance and maintaining ageing assets, but “it isn't being capitalised on”.

The survey, involving more than 850 procurement professionals, also uncovered challenges around cutting budgets, ensuring contract compliance, achieving stakeholder alliance and sourcing ethical products.

Helen Alder, head of knowledge and product development at CIPS, said: “I still think we’re at the start of the internet of things journey and, while it might develop quite rapidly, that’s not what I’ve seen so far.

“Organisations are aware of the technology and are looking at applications but, as the research shows, not many have any sort of solid strategy in place yet.”

Mike England, president EMEA at RS Components, agreed: “We’re having lots of conversations with engineers and a lot of them are seeing the industry 4.0 trend, but they haven’t worked out how they’re going to embrace it on the shop floor.”

The report revealed that the largest concerns for many in MRO procurement are around innovation, inventory management and supplier knowledge. It also uncovered that the biggest challenge for procurement professionals is the need to reduce operational budgets (55%), alongside reducing inventory costs (52%) and improving asset performance (42%).

Among the biggest day-to-day challenges for respondents was ensuring contract compliance with preferred suppliers (47%), as well as maintaining ageing assets (46%).

Although many companies are yet to put strategies in place for the IIOT, over half of respondents (53%) agreed that the appetite for new and emerging technology is growing and that conversations with suppliers about innovation are underway.

England acknowledges that while procurement teams and engineers may not be able to attempt a large-scale overhaul of their equipment and processes, it’s important to begin testing the technology and learning about how it can benefit them.

“It’s important that companies get moving with this test because while progress is relatively slow now, the pace of change will speed up over the next two to five years, and anyone burying their head in the sand will be left behind,” he added.

Alder said: “If you’re trying to add value and to do something differently to improve your organisation, a big part of the answer is to look outside your company and talk to your suppliers, other non-competitive businesses and organisations like CIPS. Suppliers are particularly useful because they will also have knowledge of what other companies are doing and can share that best practice with you.”

 Want to stay up to date with the news? Sign up to our daily bulletin.

Homeworking, Abingdon with local and regional travel as required
£40,000 - £55,000 per year depending on knowledge and experience
Winsford HQ/Flexible
£29,793 to £36,369
Cheshire Constabulary
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates