‘If your MRO prices are the best, prove it’

By Paul E. Teague -- Purchasing, 12/4/2007 8:17:00 AM

An industry leader in MRO integrated supply had saved huge sums of money by integrating their supplier into their operations. The company was spending hundreds of million dollars a year with the supplier. But, with the contract up for renewal, the MRO commodity manager wanted to ensure that his internal customers were satisfied with the agreement the company had with the supplier.

Problem
Internal customers in the company pushed the MRO commodity manager to get additional savings from the supplier. The supplier, on the other hand, said it was already giving the best pricing possible. The MRO commodity manager’s challenge was to find out if that was true, if not to get more savings, or if so to prove it to the internal customers. Approximately 200,000 SKUs were at stake.

Among possibilities: Ask other suppliers to quote on the business, change suppliers or accept the supplier’s word that prices were right. 

Find out the solution here.