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MRO best practices
July 6, 2007
As a buyer at an MRO company, I'm always eager to read about how different companies structure their MRO buying. I really like this article on Sara Lee centralizes MRO buy, gets suppliers more involved.
It details how procurement at Sara Lee is "taking a new approach to its MRO buy that’s right in line with other big changes occurring at the company."
Sara Lee’s maintenance, repair and operations (MRO) purchasing has an annual buy of $68 million. David Cotteleer and his team are centralizing the MRO buy and working toward getting suppliers more involved in the business.
Again you see the decentralized purchasing going to centralized purchasing. In the new approach of consolidation of MRO, Sara Lee will have increased its purchasing leverage. The transformation allows Sara Lee to be viewed as one large organization as opposed to a collection of 50 or 60 smaller operations. This is a prime example to the benefit of centralized purchasing. Some suppliers I deal with have an account set up for each location rather than one account for the company. They never realize the overall spend as much as having one account set up. Many companies do this because salesmen receive commissions and you have to track dollars by location.
The highlight in the article to me was where Cotteleer says: “I view the overarching strategy for MRO as being no different from our approach to direct materials in that it’s all about building relationships with suppliers that can deliver in terms of quality, cost, delivery and application. We’re applying the same level of diligence, the same approach to developing suppliers as we would with any critical supplier of direct materials.”
Notice, the same approach is being used to purchase MRO products as with the purchase of direct materials. MRO products have never been considered as critical as an item used in the finished product. New buyers are sometimes assigned to MRO products. Procurement thinks that is a good learning place. Run out of some MRO products and you can shut down a production line.
The Institute for Supply Management’s Indirect-MRO Group has a conference and workshops scheduled for September 23-26, 2007 in Chicago. Check out theMRO channel page at Purchasing.com website for more details.
Posted by Mary Walker on July 6, 2007 | Comments (0)