Ask Joanna

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:

• The easier it is to buy from your supplier partners, the more likely it is that people will follow the process you put in place. Recently, Cyril Pourrat and John Thong from Sprint partnered with Office Max to allow employees to verbally place orders through a chatbot to obtain office supplies. Why not put a similar process in place for your most frequently ordered MRO items?
• Intel was one of the first companies to test the idea of vending machines to dispense frequently requested computer supplies. Now Fastenal applies the vending machine concept to a range of MRO items – from Safety and First Aid to Metal Fabrication. Lockers are even available for large items like power tools. With a central repository, companies are reporting fewer rush orders and lower overall consumption. Like the old office supplies closet, updated for the 21st century.
• Your Smartphone mirrors your life – it contains all the apps that you need to make things work for you personally. Who can you partner with so that your MRO users have ordering apps right on their phones?
• By using predictive maintenance technology, your company can reduce the amount of emergency downtime and thus reduce the occurrences where people are making decisions based solely on speed. Delta Airlines, for example, reduced the number of maintenance related cancellations 98% the first year they implemented a predictive maintenance program.

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.