Spend Management is rarely simple, but it's often particularly complicated in the Maintenance, Repair, and Operations (MRO) category.
Encompassing everything from Material Handling services to nuts and bolts, MRO spend includes many of the products and services that literally keep businesses running. Understandably, it presents Procurement professionals with a number of challenges:
- Whereas some categories include a small selection of SKUs, the MRO category includes thousands and thousands (and thousands).
- One-off purchases are regularly made at the site-level with little mind to long-term cost effectiveness and sustainability.
- When sites are spread across a wide geographic region, communication is often less-than-transparent.
All these challenges make for a spend category where maverick purchasing and process inefficiencies can quickly get out of hand. Eliminating either requires a strategic and methodical approach to correcting Procurement's shortcomings.
Source One's Procurement specialists offer a step-by-step guide to tackling the category in their latest whitepaper series. Published in four parts, MRO Demystified presents actionable tips for organizations looking to repair their approach to MRO spend and realize greater strategic value moving forward.
Haven't had a chance to download it yet? Check out some key takeaways below before diving in.
Part 1 - Repairing the Traditional Approaches to MRO Spend Management
- Outlines the complications associated with MRO spend.
- Examines the flaws in taking either a decentralized or centralized approach to the category.
- Advocates for a customized, hybridized approach to optimizing MRO purchases.
Part 2 - The Value of a Spend Analysis
- Maps the process for conducting an effective spend analysis.
- Provides guidance for Procurement teams looking to select the right spend taxonomy.
- Offers tips for turning raw data into action by identifying savings and consolidation opportunities.
Part 3 - The Role of Strategic Sourcing in Spend Management
- Details the typical Strategic Sourcing process and applies it to the MRO category.
- Describes the outputs and inputs relevant to a world-class sourcing process.
- Presents best practices for market basket development and other components of the sourcing cycle.
Part 4 - Long-Term Spend Management
- Explores best practices for managing MRO spend in the long-term including Punch Out catalogs, Vendor Managed Inventory programs, and more.
- Breaks down a ten-step process for strategically approaching tail spend.
- Cautions Procurement teams against becoming too comfortable with any one strategy.
Don't let a complicated category overwhelm your Procurement team. Download all four installments today to take the first step in developing a world-class approach to managing MRO spend.