16 July, 2020
RALEIGH, North Carolina, Jul 16, 2020 - The coronavirus pandemic has had a medium impact on the Maintenance and Repair Operations (MRO) industry, with the availability of labor resources being severely affected as MRO services depend on excessive labor, according to Beroe Inc, a procurement intelligence firm.
Governments across affected countries have shut down various businesses to curb the spread of coronavirus, thereby affecting the MRO supply chain. There is a high impact on demand and supply and labor costs, while the impact on the labor supply chain is medium.
At a regional level, COVID-19 is causing major risk factors for the MRO industry in India, the U.S., the U.K., Italy, Spain, Germany and the Middle East. There are increases in labor cost, due to high labor shortages across industries and geographies, especially in locked down economies. Major economies that would see rises in labor cost would be the U.S., Europe and India. Chinese labor costs may not increase as predicted, as the situation is slowly returning back to normal as the country is recovering from the COVID-19 outbreak.
Beroe, which is based in North Carolina, further stated that procurement experts can access this report on market intelligence platform Beroe LiVE: live.beroeinc.com
Demand for MRO spares, maintenance services might increase from essential industries such as Pharma, and PPE. The need for manufacturing medicines and safety supplies are on high demand due to the current coronavirus pandemic, with the demand for safety supplies rising by 120 percent as compared to last year. Supply chains are also disrupted and sourcing strategies are affected globally. While global suppliers would be able to supply labor support in emergency situations as they have a planned crisis management structure in place, regional/ local players might not be able to provide the desired support for MRO.
With offline sourcing and procurement getting a hit, B2B suppliers of MRO spare parts have been witnessing a steady demand from customers. For example, Sustainable Supply, a B2B distributor of MRO with a sales of around $25 million, had the highest demand for janitorial and cleaning supplies from customers in the last few weeks. Nevertheless, the revenue index already shows a sharp decline in sales towards the last week of March 2020 due to the pandemic and is expected to continue.
The research methodology adopted for the report included:
Amazon has been in the spotlight for its B2B platform currently handling 31 million MRO categories, compared to top MRO distributors that handle around 3 million. The overall Amazon first quarter was up in Sales by 26.4 percent as compared to last year during the same period. Amazon Business has witnessed $15 billion sales and 115 percent CAGR over three years, suggesting that they are growing much faster than predicted. During the current pandemic Amazon has been hiring more than 75,000 employees to support its various businesses including Industrial supplies.
The report also includes:
Beroe is the world's leading provider of procurement intelligence and supplier compliance solutions. We provide critical market information and analysis that enables companies to make smart sourcing decisions—leading to lower costs, greater profits and reduced risk. Beroe has been providing these services for more than 13 years and currently works with more than 10,000 companies worldwide, including 400 of the Fortune 500 companies.
To learn more about Beroe Inc., please visit: http://www.beroeinc.com
“Rethinking Digital Procurement”: Joins us for a discussion on July 27