As much as organizations focus on direct procurement as a strategic business operations, it's critical not to overlook indirect spend as an equally strategic activity for the supply chain as a place to streamline the supply chain and save cost.
The purchase of the maintenance, repair, and operations (MRO)-related products and services keep the day-to-day business alive, of course, but can also add value in a variety of ways. Today, with the advent of cloud technologies, organizations have the option of MRO-as-a-service options to get things done faster and in a quicker fashion. Michael Lamoureux, research analyst, and Pierre Mitchell, chief research officer, of SpendMatters list a number of benefits of the use of MRO-as-a-service:
- At least a 20% reduction in inventory in 18 months (or less)
- Increased ifill rate of up to 20% (or more) and fill-rates that quickly approaching 98%
- Drastic reduction of obsolete inventory and recall inventory
- Reduced returns
- Increased efficiency
The infographic below from Spend Matters illustrates the breadth of the direct and indirect supply chain. Take a look and let us know how you've optimized and leveraged MRO buys for the good of the organization.
— Hailey Lynne McKeefry, Editor in Chief, EBN