Reduce Overall Maintenance Spend

Now, more than ever, purchasing agents are forced to do more with less and obtain Maintenance Repair and Operations (MRO) inventory, materials, commodities and other services at the lowest cost possible cost. With that said, I would like to share a few additional ways that can help reduce your overall maintenance spend, such as:

  1. Freight costs – Only choose delivery carriers that you have negotiated freight rates with, ask your suppliers to deliver with their own vehicles and/or make agreements with local transportation companies that are looking for back hauls to avoid empty return trips
  2. Payment terms – Try to extend payment terms or obtain discounts for making quicker payments
  3. Ask your suppliers if they provide technical support for their commodities at no additional costs
  4. Select suppliers that will buy back unused, excess MRO inventory
  5. Free on Board (FOB)/Incoterms – Try to take license to materials on delivery
  6. Avoid inventory carrying costs by making agreements with your suppliers to maintain your critical spares
  7. Reduce transaction costs with blanket orders, eCatalogs and price agreements to minimize bidding transactions
  8. Understand your maintenance suppliers’ cost drivers, and look for things that reduce their costs and pass that cost reduction on to you

MRO inventory, materials, commodities and other maintenance services are essential to ensuring your organization is operating efficiently and effectively. By exploring these potential cost-saving areas, you can significantly reduce your overall maintenance spend, and improve your purchasing operations.

AssetPoint Author:
Charlie Ward, C.P.M

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