What purchasing strategy do you use to effect cost savings for your maintenance organization? Whether you’re a large global organization or a single employee organization, you are using purchasing strategies to gain cost savings when purchasing Maintenance Repair and Operations (MRO) inventory, assets or even Computerized Maintenance Management Software (CMMS) solutions. If you are a large organization with computerized data that is used to analyze your maintenance purchases, you are probably familiar with strategies like Total Cost of Ownership (TCO), Strategic Sourcing, Tenders and Auctions. Midsize organizations may be more familiar with e-commerce, blanket orders or Supplier Management, while smaller organizations typically obtain bids, use coupons or wait for supplier sales.
The size of your company doesn’t need to restrict your maintenance purchasing strategy, but knowing your organization’s historical data is the key to whether some of the strategies will work for you or not. Below are four different purchasing situations where knowing the organization’s historical data would be essential to receiving the best cost savings:
- Would a city in the Northern US contract for winter road salt in November or March?
- When would a large potato farm contract for their seed and fertilizer, fall or spring?
- A heavy equipment repair shop knows they use static amounts of filters and tires each year. They have ample space in their inventory storeroom to stock a next year’s supply of these items. Should they go ahead and buy next year’s inventory at a 30% discount?
- A manufacturer procures most of their MRO inventory supplies from a large distributor. Volume data of individual inventory items is not available, but they have the total spend for inventory categories (bearings, couplings, seals, etc.) over the last 5 years. If the supplier offers a percentage discount off their published price list, would this save their maintenance organization money?
Maintenance organizations strive to purchase the necessary goods and services with acceptable quality and at the best price, and data is essential to making intelligent purchasing decisions.
Charlie Ward, C.P.M.