MRO – In-depth Spend Visibility Leads to Savings Opportunities
After working on numerous “MRO priority” Spend Data Classification projects over the past few months, and reading some recent blog posts regarding MRO from E-Sourcing forum, I can understand 100% why companies are increasingly focusing on MRO Spends as an area for quick savings opportunities.
With larger companies with many locations, it’s good that we can find all the different suppliers, items, and services for them.
But if their plants or warehouses are located in different parts of the country or world, they would have difficulty consolidating that spend, with some of those suppliers being only regional or state specific.
However, with MRO there are a handful of companies from which everyone purchases – Grainger, McMaster-Carr, Hagemeyer, and MSC Industrial to name a few.
With these companies I notice the number of transactions easily totalling in the 100,000 range, and more.
The Spend might not be as high for each of these MRO suppliers, as many transactions are under $100, but being able to see that the company is buying almost the exact same thing from all these MRO suppliers is where they will quickly realize, “Wow, we can have all our plants or warehouses buy from one supplier and save X amount of money.”
One of the common problems that we fix is getting all the nitty- gritty low Spend transactions classified, with very good rules that we have created over time to capture these transactions with a 98%+ accuracy.
That last one or two percent is one of our goals as well!
Smart, detailed rules make a big difference in classifying the many small dollar transactions, and our experience and technology doing this is easily leverageable across all our customer projects.
It seems that almost every company we work with has MRO at the top of the list as a “Wave 1” category target.
I am increasingly hearing stories from the field that the detailed Spend visibility we provide into MRO is paying off.
What’s your experience?
To learn more on How to conduct a better Spend Analysis, download your free e-book here: