Michael Croasdale, a Source One Sr. Project Manager, has taken a new approach to the MRO (maintenance, repair, operations) category, blending traditional sourcing best practices with innovative solutions for successful top-down implementation. Croasdale’s outlook allowed him to gain the title of a 2015 Supply and Demand Chain Executive Magazine Pro to Know. With such a cut-and-dry category, you’re probably thinking, “How can you possibly innovate?” Aside from the potential for innovation in strategy (enhanced supplier management and sourcing techniques), there are ways to tangibly drive new value to this area that Croasdale has witnessed firsthand. So sit back, relax, and hopefully our Pro to Know’s approach enlightens your own MRO sourcing practice.
Taking a Step Backwards: What’s MRO All About?
As the Business Dictionary coins it, MRO refers to “supplies consumed in the production process but which do not either become part of the end product or are not central to the firm's output. MRO items include consumables (such as cleaning, laboratory, or office supplies), industrial equipment (such as compressors, pumps, valves) and plant upkeep supplies (such as gaskets, lubricants, repair tools), and computers, fixtures, furniture, etc.”
Green It Up
One primary innovation taking place in the MRO space involves more health and environmentally-conscious industrial cleaning practices. These practices can also extend to purchasing office supplies manufactured from recycled materials, reducing paper within the sourcing process, or using gases/lubricants that do not have adverse health effects to factory workers. It is possible to achieve a significant savings percentage when sourcing sustainable and eco-friendly products/raw materials. Croasdale promotes businesses separating themselves from the misconception that sustainable solutions are always more costly than traditional options due to higher production costs involved. Sustainable business practices are an area that can offer innovation to the MRO category and still grant the same savings.
Broaden Your Supplier Horizons
According to a recent Maintenance Technology article, there is no shame in “cheating” on a supplier. Keeping your supplier options open, even if you are doing business with the competition, means you are available for better, more valuable alternatives if they should present themselves. When an organization takes the “we only do business with certain partners” avenue, it is limiting itself to innovation. This is the case within any spend category—just prevalent in MRO.
“More than ever, the decision to single-source is often made by uninformed people. Those who defend this approach typically miss the point about how closely reliability and profitability are related. It’s true that whatever a principled professional or leading corporation does should be driven and motivated by the desire to make profits while providing value and quality. But profitability is best achieved with reliable equipment, which is best served by using multiple sources of supply. This approach promotes competition, innovation and the ethical treatment of others—which is another way of saying, ‘Let’s work together.’”
Whichever category you are specialized in sourcing, remember that obtaining “preferred buyer” status can limit your ability to adapt when better ideas are presented if you don’t consider the opportunities. By no means is receiving preferential treatment negative quality, however even the most tight-knit relationship is not worth overlooking a better value. Especially in MRO, keep your eyes open to what’s out there!