MRO buyers focus on cutting costs and building relationships
Day two at the ISM Indirect-MRO Group conference in Denver
By Susan Avery -- Purchasing, 10/1/2008 8:33:00 AM
MRO purchasing professionals attending the ISM Indirect-MRO Group conference in Denver this week are talking about building trust in relationships and collaborating with suppliers. MRO stands for maintenance, repair and operations.
At the opening session of the second day of the 11th annual conference, Tim Underhill, president of Strategic Business Solutions told attendees that the economy drives actions of MRO purchasing pros and that “since the future looks uncertain, companies in all probability are refocusing efforts on reducing costs.”
To that end, he suggested MRO buyers work toward collaborating with suppliers because “suppliers have knowledge that can make your company more profitable.” Through the value-added services they offer they can either help increase revenues or decrease costs.”
The first step toward collaboration, he said, is for purchasing pros “to understand your internal customers before you involve suppliers. And, it’s your responsibility to lead the team and get people involved. You have to find value for everyone on the team.”
Two MRO buyers who certainly have built trust in relationships with both internal customers and their supplier presented a session on outsourcing the MRO buy called “Indirect MRO Empowerment.” Alisha Vaughn, purchasing manager for capital and MRO for MAPEI Corp. in Deerfield Beach, Fla., was an attendee at last year’s conference and new to her current position. Tasked with the responsibility of creating an MRO and capital purchasing operation for 12 plants in North America, she decided to outsource the MRO side to Storeroom Solutions of Radnor, Pa., also attending last year’s conference. In less than one year, working with the supplier, she now has a hand on the MRO buy and is concentrating her efforts on the capital side.
The relationship, she said, “put me in the driving seat. I have full control. Looking ahead, the sky’s the limit to what we can do in purchasing.”
In the same presentation, Tim Larson, vice president and chief purchasing officer at Michael Foods in Minneapolis, also provided a case study of how he gained control over the food processing company’s MRO spend by working with Storeroom Solutions. Savings the first year (2006) amounted to $500,000. Last year, savings were more than $1.6 million. Michael Foods has 100 plants nationwide.
“Communication, cooperation and trust are keys to success in our relationship with the supplier,” Larson said, adding that now he has metrics on the MRO buy that he never had before.
More than 120 purchasing professionals with responsibility for the MRO and indirect buy as well as distributor executives attended the conference this week.
See also: Building trust internally and with suppliers is key to success at MRO
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