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Maintenance Repair & Operations (MRO)
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Intelligence on category covers the following aspects market outlook, supply market, SWOT analysis, Cost components & Price outlook, Demand and supply drivers, Engagement Models and Procurement Best Practices

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Supplier assessment covers the following parameters Financial Risk, Ethical, Labor, Environmental Compliance, IT Security.

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Measure category performance on 15 key parameters across cost, risk and strategy KPIs

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Abi will answer all MRO related
procurement queries with relevant data points

Abi - AI powered digital procurement assistant

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Get up-to-date market and supplier info on MRO to help you build

Intelligence covers market and price outlook, SWOT analysis, demand & supply drivers, engagement models and Procurement best practices

1

Intelligence on category covers the following aspects market outlook, supply market, SWOT analysis, Cost components & Price outlook, Demand and supply drivers, Engagement Models and Procurement Best Practices

manage-risk

Assess Supplier Risk based on key risk and compliance parameters

1

Supplier assessment covers the following parameters Financial Risk, Ethical, Labor, Environmental Compliance, IT Security.

2

Supplier assessment is powered by world’s leading data partners including D&B, CreditSafe, Dow Jones, Refinitiv, Orpheus

discover-supplier

Identify right fit suppliers based on your selection criteria including revenue, capabilities, certification, geography

1

Select suppliers based on industry, country, classification from a database of 4.2 mn suppliers. Get detailed supplier profiles with supplier capabilities, revenue, certifications, risk ratings

assess-category-perforamnce

Benchmark your category performance against peers and the market

1

Measure category performance on 15 key parameters across cost, risk and strategy KPIs

source-market-indices

Get information on key factors affecting your supply

1

Source Macro Data and Market Indices information from leading data sources across these key areas - Labor Rates, Currency, Energy, Country Risk, Trade Flow/Transportation, Port Data, Tariff, Weather and Epidemics

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Report Coverage

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

Market Size

Market Size North America

$143 Bn

Market Size Europe

$164 Bn

Market Size Asia Pacific

$225 Bn

Market Size Latin America

$46 Bn

The global MRO market is growing at a CAGR of 1.72% and was expected to sustain the growth rate and attain a market value of $660 billion by 2020. North America and Europe are highly mature markets with the highest penetration of global distributors. On the other hand, markets in the Asia Pacific (APAC) and the Middle East and Africa (MEA) are showing medium and low maturity levels respectively. Similarly, both the North American and European MRO 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 consists of volatility in the oil & gas industry, technological barriers, and lack of awareness regarding MRO outsourcing. The MRO market research 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 of market leaders on a global level.

Table of Contents

  1. MRO Industry Executive Summary
  2. Global MRO Industry Outlook
  3. Supply Market Outlook
  4. MRO Category Summary – COVID 19 Impact
  1. MRO Industry Market Analysis
  2. Global MRO Market Maturity
  3. Global Mining Industry Outlook
  4. Global MRO Industry Trends
  5. Global MRO Drivers and Constraints
  6. Regional Market Outlook
  7. Industry Outlook: MRO Affecting Factors
  8. Porter's Five Forces Analysis: Developed Markets
  9. Porter's Five Forces Analysis: Emerging Markets

 

  1. COVID 19 Impact
  2. COVID 19 Impacts – Supplier Watch
  3. COVID 19 Impacts – Industry Watch

 

  1. Innovation and Sustainability
  2. Innovation in MRO
  3. Sustainability in MRO

 

  1. Cost and Pricing Analysis
  2. Cost Structure Analysis
  3. Cost Analysis and Expected Savings
  4. Cost Break up: Should Cost Model
  5. Pricing Analysis: Distributors’ Margins by Product Category and Annual Spend
  6. Pricing Analysis: Price Forecast

 

  1. MRO Industry Procurement Best Practices
  2. Sourcing Models for MRO Services
  3. Sourcing Models: Comparative Analysis
  4. Sourcing Models: Pros and Cons
  5. Pricing Models: Comparative Analysis
  6. Engagement Model: Cross Industry Value Creation
  7. Engagement Model: Mining Industry
  8. Contract Management and Strategic Service Level Agreements
  9. KPIs for MRO Distributors and Integrators
  1. MRO Industry Upcoming Technology and Innovation
  2. MRO Industry Upcoming Technology and Innovation
  3. Internet of Things (IoT)
  4. 3D Printing
  5. Industrial Vending Machine
  6. Condition Monitoring

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  • The global MRO market is valued at $622 billion​

  • The global market is forecasted to grow at a CAGR of 1.5 percent and reach $660 billion by the end of 2023​

  • Mature Markets: North America, Western Europe​

  • Fast Maturing Markets: APAC, LATAM, and Australia​

  • APAC accounts for approx. 37 percent of the global MRO market, and it is expected to remain in the similar range (34 percent-38 percent) until 2023​

maintenance repair operations

MRO in Mining Industry: Global 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 spending 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% to reach 12.01 billion tons billion by the end of 2017. The slow growth of mineral output was due to low commodity prices and low demand from China, and this trend was expected to continue until 2017.

  • Coal accounts for about 74% of the total mineral output and was expected to remain in the similar range (73–75%) until 2017. 

  • APAC contributes to 2/3 of the mineral output and is expected to grow slower than the global average, due to the slow economic growth of China. Although LATAM and Africa contribute to around 14% of the mineral output currently, they are 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% to $20 billion in 2014, as major miners cut short their exploration spend, due to the falling commodity prices

The Key Market Trends 

  • Per MRO industry trends 2021, The intensifying need to curb cost and improve product quality has been the key driving force for the adoption of industrial MRO services in the manufacturing sector. Spending on MROs is helping manufacturing sectors attain consistency in production and decrease downtime in the production process.  

  • Citing stringent government norms, manufacturers are optimizing their facilities and production processes to reduce their overall energy consumption by conducting lifecycle analyses of their product offerings and leveraging the required MRO service in order to practice lean manufacturing. This is another one of the key MRO 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 the 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 (M&A) thus offering multi-location solutions to global buyers.

  • Customers expect MRO integrated suppliers to provide highly tailored solutions, with real-time access to information and just-in-time delivery for products and services. 

  • Additionally, owing to increased information access, the demand for transparency is consequently increasing.

  • The fragmented MRO markets in APAC and MEA have produced a lucrative 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 original equipment manufacturers (OEM) and distributors being the preferred sourcing channels. E-procurement is gaining popularity in Asian countries including India and China. Increasing purchase of low-value, high-volume spend is driving the B2B platform in these regions.

  • APAC is gradually witnessing a rise in the adoption of professional services and is likely to remain a key manufacturing center for spare parts that are supplied to various countries.

  • In addition, increasing standardization of services and equipment in important manufacturing processes is expected to boost the MRO market growth. The development of leading-edge manufacturing methods in APAC owing to surging R&D investments is further projected to drive market revenue.

  • MRO consolidation is steadily implemented by mature Indian buyers. Companies such as TATA Steel, BASF, Shell, and PepsiCo. are engaging in consolidation activities through established MRO distributors such as Rexel India.

Global MRO Industry Drivers and Constraints

  • MRO sourcing not being a core competency of most buyers, mature markets are increasingly seeing the 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, MEA, and LATAM.

  • The large scope for the 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

Market Overview

The MRO industry is propelled by industrial production. While the global industrial output is gradually increasing, the same holds true for the global MRO market. The cost of products is primarily driven by fluctuations in raw material and oil prices, labor cost, raw proprietary vs. non-proprietary, and complexity of the design.

The major cost components include:
Raw Material (Costs associated with the various materials used for manufacturing the parts), Labor (Prevalent market wage rates for labor), Administrative costs & overheads (Costs associated with the office supplies, sales office cost, accounting fees, MRO marketing, insurance, interest, legal fees, rent, repairs, supplies, taxes, etc.) 

MRO buyers relish the online experience of e-procurement, mainly from tier-1 MRO B2B suppliers. Moreover, e-commerce enables them to focus more on tail spend and ensures that c-part sourcing is streamlined into Spend Under Management (SUM). This eventually helps them to save cost.

Summary

MRO stands for maintenance, repair, and operations and it refers to the supplies consumed such as industrial equipment, consumables, furniture, and plant supplies required for upkeep. The MRO market was valued at over $600 billion in 2018 and by 2020, it was expected to surpass $660 billion. The high maturity markets include the UK, the US, France, Belgium, the Netherlands, and Germany. The medium maturity markets include Canada, India, Japan, China, Africa, Brazil, and some parts of Western Europe. The major end-use industries include food and beverages, CPG, mining, automotive, technology, pharmaceutical, and oil and gas.

According to the MRO industry trends, a trade war is predicted which can cause inflation of up to 12% in MRO spare parts. The categories that make use of raw material will be affected as a result. If measures are taken to avoid this, market players can lower the impact by a high level. Experts have recommended that those products which are OEM-driven or critical ones should focus on long-term contracts. This can help provide big discounts and can save from tariff effects to a certain level. One of the expert recommendations is to focus on locally sourced spare parts.

The global MRO trends include global suppliers focusing on developed regions and making an impact there with the help of mergers and acquisitions. This has given an opportunity for global buyers. Buyers are more aware and so they require high transparency from MRO suppliers. Buyers are expecting customized solutions and they require information access and timely delivery of products and services. Due to the fragmented market, integrators and distributors have lots of opportunities. The MRO spend analysis shows that some KPIs include lead-time for product delivery, innovation for potential, inventory turnover ratio, and service level improvements. The MRO stock is important to understand too.

Experts state that industrial production is leading to an expansion of the MRO market. In Asia, one of the trends is e-procurement. India and China are particularly focused on this. Some companies in India such as PepsiCo and TATA Steel are engaged in MRO consolidation with the help of MRO distributors. The benefit of e-procurement is enjoyed by B2B suppliers who are in the Tier-1 category. E-commerce has many benefits and one of them is that it enables buyers to focus on tail spend. This helps in streamlining the C-part sourcing into the SUM. This can help cut down on costs.

MRO Market analysis shows various drivers and constraints. MRO outsourcing is on the rise whereby high-cost savings and lower need for labor are some of the benefits. At present, medium and low maturity markets such as LATAM, APAC, and MEA are not immune to this and, as such, have not leveraged this opportunity. There is potential in the shale gas processing equipment market for MRO. There are many cost drivers for products including oil prices and raw materials. The main cost drivers for manufacturers include design, labor cost, oil price fluctuation, and raw materials.

 

Author

Beroe category specialist who created this report

Vijith Bharghavan
Industry experts who worked on the report

We work with a network of 2800+ industry experts to vet every data point and validate every hypothesis our reports

Ian Birtles

Maintenance Repair & Operations (MRO) Market Frequently Asked Questions

  1. What is the market size of the MRO market? 
  2. The MRO market share was valued at $605 billion as of 2018. 

 

  1. Who are the major players in the MRO industry? 
  2. The MRO industry overview by Beroe shows that the high maturity market regions are US, UK, Germany, France, Netherlands, and Belgium. The medium market maturity regions are Japan, China, India, Australia, South Africa, Canada, and Brazil. 

 

  1. What are the latest trends in the MRO market?
  2. The current MRO trends based on Beroe’s analysis are inflation of MRO spare part categories from 8-12% due to trade war and lack of target of any specific MRO category with dependence on raw material usage specific categories such as power transmission, tools, and fasteners. These changes are expected to kick in by 2020. 

 

  1. What will be the expected growth of the MRO industry?
  2. As per Beroe’s MRO market analysis, the MRO market share is expected to increase at a CAGR of 1.72 percent and reach $660 billion by the end of 2020. 

 

  1. What are the key drivers of the MRO market?
  2. One of the key drivers of the MRO market is the fact that MRO outsourcing is not a core competency for many buyers which is increasing adoption of MRO outsourcing in mature markets. This awareness is found to be low in less mature markets such as APAC, MEA, and LATAM. A huge scope for the MRO market lies in the shale gas processing equipment market. 

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