The CPO's Corner
Rogue spend is always a problem in the MRO space. When parts are needed to keep a factory running, most people will take the fastest route possible to get what they need. Deals may be in place with global suppliers, but the Home Depot around the corner may offer the speediest solution. And in the end, the business cares about producing the goods, not about where the MRO items came from.
So how does an MRO buyer gain control?
You step back, take a hard look at your approach, and adopt a client-centric attitude. You’ve worked hard to get the lowest cost deal in place, now expand your goals to include agility. Some examples:
It means challenging traditional ordering processes – maybe raising approval levels for certain individuals or empowering them to buy without approvals – knowing that reporting after the fact is likely to point out any worrisome trends. Google is reported to have done that with wireless headsets, tightening the order process when the metrics showed a disproportionate number of them being obtained.
People follow processes when they are easy or fun. Technology is giving the MRO buyer a perfect opportunity. What a great way to add some excitement to a classic category, and to gently guide your internal clients to buy the right way.
Joanna Martinez is a global procurement / supply chain leader and the founder of Supply Chain Advisors LLC. She is a frequent lecturer and blogger on procurement topics and also provides coaching, strategy development, training, and cost reduction opportunity assessment. Her clients range from Fortune 100 companies to technology startups.
As either regional or global CPO, Joanna has led transformation initiatives for companies in many different sectors: among them Johnson & Johnson (consumer products), Diageo (beverage), AllianceBernstein LP (financial services) and Cushman & Wakefield (real estate services, property management). She has also held client-facing roles, effectively giving her the opportunity to “sit on both sides of the table”.