Maintenance, repair and operating supplies, commonly and collectively known as ‘MRO’, are often viewed as simple categories to manage. Worse yet, they may be overlooked as opportunities for savings or value creation because the spend tends to be fragmented in terms of both items and suppliers. To the contrary - MRO requires a strategy that matches operational requirements and provides a quick response from purchasing as needed. A smart MRO buyer has to consider much more than just keeping track of a list of line items and services, and effective total cost analysis requires strategic thinking and an understanding of the overall operation. For example, Dr. Harry Hough, President of the American Purchasing Society, said that "A significant portion of MRO cost reductions come from administrative improvements rather than changes in requirements."
WILLOW GROVE, PA (September 24, 2013) – Hot on the heels of its introduction on YouTube, Source One Management Services, LLC makes its debut on iTunes today, launching two new podcasts of supply chain and spend management news and trend discussions aimed at those within the procurement and strategic sourcing fields.
When you read or hear about the importance of spend analysis, do you assume the subject is the technology or the process? Increased automation on the solutions front has made it possible for procurement teams to get visibility into corporate spend faster through quicker, more frequent data refreshes. Even with nearly real time access to data, the ultimate goal is results, and they can’t be brought about without a team that possesses the skills, understanding, and relationships to apply the knowledge they have gained.
Omnia inter se conexa - Everything is interconnected -- Cicero
When we think about complex categories as Procurement professionals, it is natural to think about the size and scale of a project. The number of data points increases quickly when multiplied across items, specifications, suppliers and bids. But large does not necessarily mean complex. Dictionary.com offers a definition of complex that indicates something is ‘composed of many interconnected parts’. In such a case, complexity may be dictated by the interconnectedness of design and cost elements rather than the size of the project.
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