Currently, the value of global Maintenance, Repair, and Operations (MRO) market is estimated to be around $605 billion. As per MRO market forecast, by the end of 2020, the total market valuation is predicted to reach around $660 billion growing at a CAGR of 1.72 percent. Major end-user industries for the MRO market are mining, pharmaceutical, CPG, chemical, automotive, oil and gas, food and beverages and technology.
Asia Pacific is the dominant region with the largest market share of 37 percent of the total global MRO market and it has been predicted that it will continue to possess the same or rather increase its market share in the next five years.
What is MRO?
MRO stands for the maintenance, repair, and operations that are being used by the industry to manufacture an end-product. MRO also covers spare parts of equipment such as valves and pumps, consumables like cleaning supplies, lubricants, or any kind of activity that involves restoration or maintenance of any equipment. Other MRO supplies, equipment and activities include gloves, maintenance processes, safety equipment, janitorial supplies, sealants, computer systems, repair tools, and office supplies.
MRO activities regarding Industrial maintenance can be categorized into three types:
- Preventive Maintenance – This is done at regular intervals so as to prevent an issue before arising. Preventive maintenance ensures the smooth functioning of the equipment. It is an important part of the maintenance cycle and includes conducting tests and taking measurements of the equipment to ensure that everything is in working order.
- Corrective Maintenance – This type of maintenance is done after the occurrence of a problem. Also known as conditional maintenance, this is one of the oldest forms of maintenance, involving the repair of equipment that is already facing problems. These problems may include general wearing and tearing of equipment or any kind of breakdown.
- Predictive Maintenance – This type of maintenance is based on the predicted failure of equipment and machines. The predictions are made on the basis of historical data obtained and statistics. The concept of predictive maintenance ties in closely to preventive maintenance, and helps prevent major problems later on.
Many companies involved in mining work are predicted to spend large expenses on MRO activities in order to improve the efficiency of their equipment. MRO can reduce required downtime and can also reduce spending on new equipment.
Market Trends and Analysis
There are several trends in the MRO market that are expected to have an impact on the field:
The maturing markets are witnessing outsourcing at a large scale and are driving the MRO market in these emerging economies. The MRO market has a large scope in various industries such as shale gas processing, pumps and compressors, combustion engines and heat exchangers, machinery related to electricity and measuring device.
On the other hand, awareness regarding integrated supply solutions and MRO outsourcing in developing markets is still very low. Regions like the Asia Pacific, Latin America, Middle East, and Africa do not have adequate awareness regarding this trend in the industry. As a result, the scope of growth for the MRO market in these regions is limited.
As most customers do not have a core-competency in MRO sourcing in mature markets of USA and Europe, there are increased instances of suppliers opting for integrated supply solutions and adoption of MRO outsourcing. This trend is helping the suppliers save a lot of money as well as manpower required in rendering these services.
There is a low scope of growth in North America and Western Europe as these markets have reached their saturation point. The markets that are witnessing a higher growth include the Asia Pacific, Latin America, and Australia. Although many countries in these markets are also reaching their saturation points, the scope of growth in the MRO market in these regions is immense.
As the market for MRO in developed countries is matured, companies have now undertaken a different strategy to expand their hold in the market. They are opting for mergers and acquisitions to enter new geographical locations and thereby offering multi-location services to the customers.
Due to distributors and OEM being the most preferred channels for sourcing, there is a rise in the trend of e-procurement in developing countries such as India and China. The business to business trading platforms in these regions are being driven by low-cost, high-quantity spending. Companies such as PepsiCo, Tata, Shell, and BASF actively engage in consolidation activities with help of well-established distributors.
The fragmentation of the MRO market in regions across the Asia Pacific, Middle East, and Africa is a great opportunity for distributors of MRO. These developing regions have a high scope of growth in this market. Due to the increasing popularity of E-procurement in China and India, and also due to an increase in the purchase of a high volume of products in low value are driving factors of the MRO market.
The expectations of customers from MRO suppliers is that they must provide highly tailored solutions. These expectations also include real-time information access and timely delivery of services and products. The demand from consumers has also increased regarding transparency.
Although, all the signs point towards slowing down of the growth in the MRO Market, it will still continue to grow at a steady pace across upcoming regions of Asia Pacific, Middle East, Africa, and Latin America.
A significant growth factor for the global MRO industry is the potential for innovation in maintenance and repair which can facilitate cost savings for the clients. Due to the considerable competition in the MRO market, suppliers with added offerings are more likely to succeed.
The MRO industry is poised to have a steady growth in the near future, despite saturation in several markets. Since nearly every industry has maintenance and repair requirements, the opportunities are plenty, especially in fields with highly specialized equipment. The inventory turnover rate and improvement of service levels are factors that will influence the further growth of the market.