Maintenance Repair & Operations (MRO) Market Intelligence

Impact of US China Trade War on MRO

As the US and China spar over trade, we look at the impact of the US China Trade Wars on MRO categories.

Key Factors:

Raw Material Costs – Most of the spare parts manufacturers use steel and copper imported from China which is expected to impact the MRO final products produced within USA.

Trends & Insights:

Based on the Beroe survey conducted with Top 5 Global MRO Distributors/Integrators, Trade war is forecasted to inflate the MRO spare part categories anywhere from 8-12%
MRO Distributors/Integrators predict that no specific MRO category will be targeted completely, but based on raw material usage specific categories like power transmission, Tools, Fasteners etc. may feel the brunt more than the other categories do
They predict the increase to really kick in towards the end of 2019 and beginning of 2020 unless some measures are taken to curtail this impact

Actions & Recommendations:

Focus on local sourcing for non-critical/non-OEM (Original Equipment Manufacturer) spare parts to offset tariff impacts
For OEM driven/ critical products the focus should be more on fixing long term contracts with suppliers along to leverage volume based discounts to offset tariff impacts.

Note: These are estimates and forecasts.

Maintenance Repair & Operations (MRO) Market Description

The global MRO market is currently growing at a Compound Annual Growth Rate (CAGR) of 1.72 percent and it is expected to sustain the growth rate and attain a market value of $660 billion by 2020. North America and Europe are highly mature markets and these regions also have the highest penetration of global distributors. On the other hand, APAC and MEA are the markets with medium and low maturity levels respectively. Similarly, both the North American and European markets also possess high growth potential in terms of adoption of modern business models, e-procurement, increased outsourcing levels, and vendor consolidation.

The report covers crucial aspects of the global MRO market and provides insights on key market trends such as global mineral output, innovations in stock optimization, focus on cost reduction, and increase in industrial production. Insights on some growth constraints are also explained in the report that consist of volatility in the oil & gas industry, technological barriers, and lack of awareness regarding MRO outsourcing. The report also discusses some of the emerging engagement strategies in the industry including MRO Integration, industrial supply e-commerce, and VMI along with a detailed analysis on market leaders on a global level.

Report Coverage

Mergers and Acquisitions
Regional Market Outlook- North America, Europe, MEA, APAC, LATAM
Supply Trends and Insights
Global Supplier List and Product Capabilities

Maintenance Repair & Operations (MRO) Market Trend, Analysis & Forecast

Category Intelligence on Maintenance Repair & Operations (MRO) covers the following

Information relating to market, supply, cost, and pricing analysis
Hard to find data on cost and TCO models, supplier details, and performance benchmarks
Macroeconomic and regional trends impacting cost, supply, and other market dynamics
Category-specific negotiation and sourcing advice

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Executive Summary

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Market Analysis

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Supply Analysis

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Cost & Pricing Analysis

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Best Practices

1.MRO Industry Executive Summary

1.1 Global MRO Industry Outlook
1.2 Supply Market Outlook

2. MRO Industry Market Analysis

2.1 Global MRO Market Maturity
2.2 Global Mining Industry Outlook
2.3 Global MRO Industry Trends
2.4 Global MRO Drivers and Constraints
2.5 Regional Market Outlook
2.6 Industry Outlook: MRO Affecting Factors
2.7 Porter’s Five Forces Analysis: Developed Markets
2.8 Porter’s Five Forces Analysis: Emerging Markets
2.7 Trending News in MRO(2017)

3. MRO Industry Supply Analysis

3.1 Supply Market Outlook: Supply Trends and Insights
3.2 Key Global MRO Suppliers •Key Regional Suppliers: Service Portfolio
3.3 Key Global Supplier Profile
3.4 Supplier SWOT Analysis

4. MRO Industry Cost and Pricing Analysis

4.1 Cost Structure Analysis
4.2 Cost Analysis and Expected Savings
4.3 Cost Break up: Should Cost Model
4.4 Pricing Analysis: Distributors’ Margins by Product Category and Annual Spend
4.5 Pricing Analysis: Price Forecast

5. MRO Industry Procurement Best Practices

5.1 Sourcing Models for MRO Services
5.2 Sourcing Models: Comparative Analysis
5.3 Sourcing Models: Pros and Cons
5.4 Pricing Models: Comparative Analysis
5.5 Engagement Model: Cross Industry Value Creation
5.6 Engagement Model: Mining Industry
5.7 Contract Management and Strategic Service Level Agreements
5.8 KPIs for MRO Distributors and Integrators

6. MRO Industry Upcoming Technology and Innovation

6.1 Internet of Things(IoT)
6.2 3D Printing
6.3 Industrial Vending Machine

Global MRO Industry Outlook

The global MRO market is valued at $ 605 billion
The global market is forecasted to grow at a CAGR of 1.72 percent and reach $660 billion by the end of 2020
Mature Markets: North America, Western Europe
Fast Maturing Markets: APAC, LATAM, and Australia
APAC accounts for ~37 percent of the global MRO market, and it is expected to remain in the similar range (34 percent-38 percent) until 2020

mro-market-global-market-size

Global Mining Industry: Outlook

Mining companies are expected to spend more on MRO activities to improve the operational efficiency of the equipment by reducing the downtime and lower the spend on new capital equipment.

The global mineral output was at 11.37 billion metric tons in 2014 and expected to grow at a CAGR of 1.8 percent and reach 12.01 billion tons billion by the end of 2017. The slow growth of mineral output is due to low commodity prices and low demand from China, and this trend is expected to continue until 2017
Coal accounts for ~74 percent of the total mineral output and is expected to remain in the similar range (73 – 75 percent) until 2017
The APAC contributes to two third of the mineral output and is expected to grow lesser than the global average, due to the slow economic growth of China. Although Latin America and Africa contribute to around 14 percent of the mineral output currently, it is expected to witness maximum growth compared to other regions, owing to the participation of global players and changing local regulations
Global exploration spend declined by about 31 percent to $20 billion in 2014, as major miners cut short their exploration spend, due to the falling commodity prices

The key Market Trends

Due to slowdown in the mining industry and the falling commodity prices, mining companies have been compelled to refrain from high capital expenditures and resort to technologically intensive investments, such as mine technology products, which enable them to enhance the production level by improving the equipment performance and reducing the downtime

Global MRO Industry Trends

Increasing levels of MRO outsourcing and adoption of Integrator model for MRO sourcing in developed regions like North America and Western Europe signal increasing buyer maturity and willingness to partner with suppliers
Global suppliers are entering new geographies in developed regions through mergers and acquisitions, thus offering multi-location solutions to global buyers
Customers expect MRO integrated suppliers to provide highly tailored solution, with real-time access to information and just-in-time delivery for products and services
Additionally, due to increased information access, the demand for transparency is consequently increasing
The fragmented MRO market in APAC and the MEA has produced a big opportunity for global distributors and integrators to tap this market
These regions are considered to be developing regions, in terms of MRO Sourcing maturity, with OEM and Distributors being the preferred souring channels E-procurement is gaining popularity in Asian regions, like India and China. Increased purchase of low-value, high-volume spend is driving the B2B platform in these regions
MRO consolidation is steadily being implemented by mature Indian buyers. Companies, such as, TATA Steel, BASF, Shell, PepsiCo, etc., engage in consolidation activities through established MRO distributors, like Rexel India

Global MRO Industry Drivers and Constraints

MRO sourcing not being a core competency of most buyers, mature markets are increasingly seeing adoption of MRO outsourcing and integrated supply solutions and are reaping the benefits in terms of hard cash savings and manpower reduction. The awareness of the same is low in maturing/less mature markets, such as APAC, the MEA and LATAM
Large scope for MRO market lies in the shale gas processing equipment market, by component type, which includes compressors and pumps, internal combustion engine, heat exchangers, electrical machinery, and measuring and controlling devices

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