Why MRO Procurement Strategy – As A-Service Offering Makes Sense

1. Why MRO Procurement Strategy As A-Service Offering Makes Sense

2. Here is an overview of what MRO or ‘indirect procurement’ is, why most companies underestimate its importance and how a good MRO procurement strategy can improve your bottom line. MRO stands for maintenance, repair and operations. In procurement terms it refers to the products and tools purchased that keep an organization running. Managing the MRO category is not always easy, with hundreds or even thousands of products scattered across a vast number of suppliers.

3. To get it under control, a good MRO procurement strategy covering three main steps is needed: digital solutions need to be introduced and combined with a VMI (Vendor Managed Inventory) programed in order to ultimately streamline the supplier base. By just employing these basic procurement management tactics, there is plenty of opportunity for reducing both process and purchase costs. For example, it’s likely that there are many MRO categories and items in the tail-spend that can be brought under management. With the right supply chain expertise and resources, it is possible to look beyond to changes that deliver even more value. Unfortunately, because MRO is typically considered a cost center, it is sometimes difficult to justify adding expert staff, or acquiring the analysis tools that would be needed. Another bad news is, while it can account for between 15 and 40% of a company’s annual procurement budget, MRO procurement often doesn’t receive the time and attention needed to optimize its performance and provide effective cost reduction, inventory accuracy, and lasting value.

4. Your procurement team likely understands the importance of plugging this lacuna in your procurement strategy, but it can be an uphill climb when you’re facing issues such as: • Invisible, decentralized spending • Wasted talent and time • An emphasis on cutting costs instead of building value • Lost, misplaced, and redundant inventory

5. That’s where an MRO procurement strategy – as a-service offering makes sense While procurement departments are usually essential in driving change, our research shows that enacting a successful MRO strategy relies on all stakeholders involved in indirect procurement working together which includes engineering, operations and finance functions.

6. Benefits of MRO procurement strategy by Paragon Reduce the number of supply chain, their costs and risks Better innovation Increased responsiveness towards customers Improved decision making • • • • Finally, for better control over MRO expenditure, the procurement strategy must improve visibility and eliminate hidden costs found both in orders and stock and supplier management. To top it off, savings can be made, productivity enhanced and teams can focus on higher value-added tasks. Paragon Results can help you achieve this. Connect with us!

7. Contact Details info@paragonresults.com 1000 Parkwood Circle, SE, Suite 900, Atlanta, GA 30339 https://paragonresults.com/ +1 (630)-273-5231