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CHALLENGES IN MRO PROCUREMENT
Posted on Aug 26, 2021 |
Posted in News |
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One of the major locales that leave enough room and has extreme potential for large cost savings and enhanced efficiency in the supply chain industry is in the procurement of indirect materials that are not directly utilized for the manufacture of industrial goods and services but are of paramount importance for maintenance, repair, and operation of the companies. But many challenges are encountered in the MRO procurement system.
One of the major locales that leave enough room and has extreme potential for large cost savings and enhanced efficiency in the supply chain industry is in the procurement of indirect materials that are not directly utilized for the manufacture of industrial goods and services but are of paramount importance for maintenance, repair, and operation of the companies. But many challenges are encountered in the MRO procurement system.
Some of the biggest challenges identified are mentioned below:
1. Cost savings: This is a universal challenge faced by nearly every company. There is always a dire need to reduce operational budgets and lower the costs of inventory to ensure the optimum pricing of the industrial products online and create a customer-friendly yet manageable and predictable environment for balancing the internal processes of the company and purchasing industrial tools online.
2. Talent: The MRO procurement services have always grappled with a major challenge of finding, hiring, and retaining talented and skilled professionals who are equipped enough to handle the system efficiently. But since MRO doesn't receive the mainstream attention within internal procurement organization, it mostly never tops the candidate's list of preferences.
3. Supply Base Consolidation: Over the past few decades, one of the biggest demands of our customers has been the consolidation of their supply base which is mostly intended at getting people to buy-in the hard-earned deals. The present scenario is perfect for shifting the entire supplier base online as most people these days tend to buy industrial products and tools online.
4. Standard payment terms: This challenge tops the list of many of us especially since MRO purchases circumnavigate around many suppliers annually. So, deciding on standard payment terms seems nearly impossible.
5. Insight into Spend: There is a lack of detailed insight in the MRO spend even after heavy investments in products such as SAP and Maximo by the organizations. This could be due to faulty PO orders or different ways of placing an order for the same product. Whatever the reason may be, its prevalence interferes with effective management of item data and negotiation of stable pricing by MRO procurement.
Category: News
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