Few spend categories are as consistently frustrating as Maintenance, Repair, and Operations. Composed of countless products and services, MRO can leave even the most well-appointed organizations struggling with inefficient processes and lost savings.
Source One's spend management experts have spent years helping clients make sense of the category, recognize the flaws in their methodologies, and develop more strategic approaches to MRO spend. Their new whitepaper series, MRO Demystified, offers tips and best practices informed by these experiences. This week, Associate Director Michael Croasdale joins the Source One Podcast to discuss the series and provide additional context.
Croasdale opens by acknowledging that most organizations recognize how important their MRO purchases are. Acknowledging this fact, however, is not the same as effectively acting on it. "Executives often perceive the category as too complicated," says Croasdale. Scared away, they leave MRO spend management to representatives at the facility level. While this ensures each facility gets what it needs, it's also a methodology characterized by inefficiency and poor communication.
The most popular alternative, Croasdale suggests, is ineffective in its own way. When companies attempt to centralize their MRO spend management efforts, they tend to oversimplify things. According to Croasdale, "They lock into relationships with top-tier distributors and issue corporate mandates to guarantee compliance." More often than not, they're simply replacing one inefficient methodology with an equally low-value one. Total centralization often leads to unrest among facility managers. As tensions rise, rogue spending and non-compliance can become a greater and greater concern.
Throughout the conversation, Croasdale cautions Procurement against pursuing quick wins for its MRO spend. "There's no one-size-fits-all strategy for tackling the category," he says. Organizations that go out looking for one are only setting themselves up for failure. He'll join the podcast next week to offer suggestions for developing a unique strategy informed by Procurement's goals, objectives, and spend profile.
Subscribe to the Source One Podcast today to hear the full conversation.