Posted by Chris Moore on Sun, 03/27/2016
In the second installment in this series by Spend Matters, Pierre Mitchell and Michael Lamoureux dive into some details about the potential value of the MRO As-a-Service model. Last week, I blogged about the first part of this series.
Whether you do it yourself as a highly sophisticated organization or look to a third party if you are a bit further back in the maturity curve, the use of MRO as a service is valuable because it can realistically help you achieve:
- At least a 20% reduction in inventory in 18 months (or less)
- An increase in fill rate of up to 20% (or more) and fill-rates that can quickly approach 98%
- Drastic reduction of obsolete inventory and recall inventory
- Reduced returns
- Greater efficiency
- Procurement success well beyond the obvious
Organizations with the best intentions will revert to MRO quick-fixes because they lack the dedicated personnel, focused technology investment and the process expertise to make lasting and impactful change to their MRO supply chain. These quick-fixes often mask inefficient processes with “efficient workarounds”, shift costs from products to processing, and elevate risks by not differentiating the critical few spare part suppliers from the thousands of non-critical supplies and hundreds of suppliers.