Visibility Into MRO Spend, Stock, and Usage
We love to talk about the importance of high-quality MRO supply chain and material master data. In fact, it is the process of helping our customers achieve and sustain data quality that most closely defines us as a technology and consulting partner. But, hard as it is for us to accept, not everyone is as passionate about data quality as we are. So, why bother?
Assume for a moment that you have accepted the position of MRO Category Manager for your multi-national manufacturing company. Your mandate is to reduce spend and inventory without impacting operations. You have a small corporate team to help you define and enforce standards and negotiate corporate agreements but the people making the daily decisions that determine whether you will succeed or fail are in the plants and do not report to you. The best that you can ever hope for is influence. Your success will be based on building consensus, holding the regions accountable to the plan, and making the right decision the most expedient one. Information will be your power.
You will need to understand exactly what is being purchased at each plant and from whom, as well as what is being stocked and why. By “what” we don’t mean just by supplier part number but by the original manufacturer’s part number and the part’s specifications. Only this level of detail will provide visibility into all the different sources of supply and allow substitution for parts with common specifications. Armed with this new knowledge you will pool spending and negotiate new supply agreements that deliver substantial cost and performance savings.
Eliminating duplicate items, moving slow moving inventory between plants, and pooling insurance spares will provide quick wins in inventory reduction. You will sustain this progress by consistently reporting on agreed key performance indicators and holding everyone accountable for making the right decisions by challenging those that fall outside of the agreed norms.
Over time, you will move more spending to preferred suppliers and will have the ability to validate whether those suppliers continue to provide the best value to your business.
Making MRO Optimisation a Reality
The level of detail required to make MRO spending and inventory optimisation a reality is not going to come from your ERP systems, even when supplemented with an array of Excel spreadsheets. In fact, it is not possible even if you are on a single version of the latest and best ERP. Simply put, ERP systems are not designed to do what is required. Only when ERP history is standardised – using a solution such as the sparesFinder platform – and then aggregated and analysed, can accurate and useful results be extracted.
The Logical First Step
There is no doubt that organisations that have access to meaningful MRO related data are at a competitive advantage. For our customers, we offer a complete solution to support strategic corporate inventory reduction and spend rationalisation programmes. Insight is a business intelligence solution, designed to make it easy for businesses to aggregate and analyse inventory, spending, and materials usage data in a single, web-based application. Insight gives our customers the ability to quickly and easily unearth important business trends by viewing standardised spend and inventory history without having to sift through disparate applications, spreadsheets, or complex and expensive warehousing systems.