Maintenance Repair & Operations (MRO) Procurement Intelligence Report, 2024 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

The geographical location, supply chain complexities, and scale of business play a vital factor in analyzing the rate benchmarking of the Maintenance Repair & Operations (MRO) category.

Labor costs vary significantly across developed and developing nations and can dramatically push up service costs. For instance, in 2023, the average salary for MRO managers ranged between USD 57,000 - 69,000 annually in developed countries such as the U.S., U.K., and Germany. Entry-level MRO positions can start from USD 41,000 annually. Most of the companies use automation to reduce labor cost or contract it to countries with low labor costs such as China or India. Most of the MRO-related jobs in India have a salary range of USD 6,000 - 8,000 annually. Salaries can increase based on other factors such as years of experience, industry, and knowledge expertise.

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Labor cost is one of the key components of the total incurred costs while offering a product or service. Therefore, an organization must decide on whether the focus category should be retained in-house or outsourced if the organization is providing its products or services at competitive prices. If the organization decides in favor of outsourcing, it must understand the difference in the salary structures of suppliers before selecting a supplier and formulating a negotiation strategy.

According to our research, product design engineers at Wurth Group and Applied Industrial Technologies receive a 10 - 15% higher base salary compared to the salary received by product design engineers working in companies such as WESCO International, Inc. and Sonepar Group. However, the year-on-year increment rate in all these companies majorly depends on the Key Result Areas (KRAs).

Organizations may find it cumbersome to track all the latest developments in their supplier landscape continuously. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the Maintenance Repair & Operations (MRO) category in the last year:

• In November 2023, Henkel purchased Critica Infrastructure. The acquiree is a U.S.-based company that provides composite MRO services across critical oil and gas transmission lines and water supply systems. The deal aims to expand Henkel’s MRO business line and thereby strengthen its related support services.

• In May 2023, A letter of intent has been signed between Rubix and Siemens for the distribution of Siemens' low-voltage motors. This is a pan-European partnership agreement where Rubix will be able to provide Siemens’ motors quickly to production sites and factories across the region. As part of carbon reduction efforts, these motors will not only help companies reduce electricity consumption by almost 70% but also provide better cost savings.

• In April 2023, MSC Industrial Supply joined forces with MachiningCloud to be its exclusive e-commerce distributor of their MRO and metalworking products in the North American region. The latter’s advanced platform provides end-to-end machining application requirements through seamless integration into their CAD/CAM programming system. As per this partnership agreement, end users or consumers will be able to buy products or tools directly through MachiningCloud’s digital platform.

• In April 2023, Rubix purchased Gapp Automation Ltd, which specializes in supplying motors, gearboxes, machine controls, transmission objects, and other automation products across a wide range of industries. The latter would become a part of the acquirer’s “Motion Control & Automation” business division. The deal would help the companies to expand its capabilities in the U.K. and the Irish markets and strengthen Rubix’s MCA sector.