MRO

Even veteran procurement pros often find MRO procurement a particular challenge. It encompasses a wide, complex mix of highly technical products and specialized services. 

GEP has a proven track record of success sourcing MRO. Over the past dozen years, GEP has managed billions of dollars in MRO spend for Fortune 500 and Global 2000 companies in more than 20 industries and every major market.

Same Goals, Different Priorities

End-users typically have strong attachments to their MRO suppliers; ensuring safety, avoiding downtime and outages are the most crucial factors. We keep in mind that end-users have different priorities than achieving savings, we are also well aware of the chronic challenges of sourcing MRO: 

  • Substantial spend spread across multiple sites and categories
  • Many unique SKUs, many of which used only on certain equipment
  • Unpredictable demand – Some 70% of MRO items turn less than once every two years
  • A "just in case" mind frame, buying more than actually needed
  • Large number of vendors, including local vendors at individual sites
  • Spot buys – unplanned purchases can account for 50% of total MRO spend
  • Data management challenges – myriad number of specs, part numbering, systems and more

We work with your MRO leads to meet both the end users expectations and deliver you substantial savings by employing the following best practices: 

MRO Strategy 

  • The MRO procurement strategy is focused on creating strategic advantages 
  • Regional and category specific issues/constraints are understood and addressed
  • Category strategies are developed and communicated across the enterprise

Organizational Alignment

  • MRO procurement is perceived as a high value generator by top management
  • Center-led procurement drives the development of global MRO procurement strategies, policies and processes executed at the local level, and assigns category management responsibility for key categories

Sourcing

  • All categories are sourced and revisited by cross-functional teams 
  • Enterprise spend is leveraged
  • Procurement is a key driver behind simplification and standardization of sourced products and services
  • Sourcing focuses on strategic suppliers thus reducing the size of the supply base

Procurement Technology

  • Proactively use technology to manage the MRO program
  • Heavy usage of Strategic Sourcing tools (eRFX, auctions, contract management
  • Heavy use of Spend management tools to understand and manage MRO expenditures & compliance
  • Highly automated procurement processes
  • Focused on on-line ordering, invoicing and payment

Inventory Management

  • Segment items by asset criticality
  • Proactively monitor usage to balance asset availability and inventory cost
  • Adjust usage forecasts at a minimum annually
  • Selective use of VMI/Consignment to drive down inventory costs
  • Utilize SLAs to define expectations and KPIs to monitor effectiveness

Procurement Process

  • Transaction oriented procurement activities are actively being eliminated
  • Standardized/Aligned processes across the enterprise

Simply put, MRO procurement is a core competence at GEP.  

Learn more about GEP's expertise in MRO sourcing.CONTACT US TODAY