While change is not always predictable, there are still ways that organisations can prepare for it. Here are five ways to future proof the Maintenance, Repair and Operations (MRO) category of indirect procurement in your business.

Change is an inevitable part of business, and Indirect Procurement for MRO supplies is no exception. A recent survey among members of the Chartered Institute for Procurement and Supply (CIPS) found that 44% expect a complete change in company procurement strategy over the next five years. A further 34% expect some change.
Organisations can already foresee some developments, but not others. However, predictable or not, MRO professionals can make provisions that will put their business in a stronger position to face the future.  
Here are five ways to navigate change in MRO procurement. The suggestions are based upon the findings of the CIPS survey, which appeared in a joint RS Components and CIPS whitepaper entitled Indirect Procurement Report 2018: drivers of change & how to respond.
“The pace of change will speed up over the next five years – and anyone burying their head in the sand will be left behind”Mike England, Chief Operating Officer, RS Components


Rationalise your supplier network
Why do this?
Mike England, Chief Operating Officer at RS Components, is clear about the benefits that rationalising your supplier network brings to an organisation. “Procurement teams are being pushed harder than ever to deliver savings and a co-ordinated supplier strategy is essential to achieving this,” he says.

“Reducing operational and inventory costs requires careful management,” he continues. “Ideally, an organisation should work with a fixed group of trusted suppliers that can provide all of the MRO materials they need and when their maintenance team needs them.

“This reduces the possibility of off-contract spend, ensures controlled pricing and means that less stock has to be held onsite, since your supplier can be relied upon to deliver products quickly when needed.

“Too many organisations – particularly large ones working over multiple sites – have hundreds of suppliers but they don’t have a particularly close relationship with them,” Mike England adds.

“They should instead be looking to form much closer, collaborative partnerships with a small number of suppliers. This trust and close working relationship are key to managing stakeholders away from existing suppliers and ensuring they work within framework agreements.”

How to do this
• Work closely with your maintenance team to identify what they need from suppliers

• Identify suppliers that meet the needs of your maintenance team and the overarching business requirements of your organisation

• Choose suppliers who can provide the parts that your maintenance team need and when they need them, and who also offer eProcurement solutions that provide spend visibility

• Consider the cultural fit between a supplier and your firm. Compatibility is essential to building a long-term collaborative relationship where you can work together with your supplier to further improve the MRO procurement process

Get the most from suppliers
Why do this?
Helen Alder, Head of Knowledge and Product Development at CIPS, believes that procurement teams are starting to see where suppliers can provide more than simply parts and products.

“Where do you go if you’re trying to add value and do something differently to improve your organisation?” she asks. “A big part of the answer is to look outside your company and talk to your suppliers, other non-competitive businesses and organisations like CIPS.”

How to do this
• With the help of your suppliers, pinpoint areas of the procurement process that could be outsourced

• Speak regularly to your trusted suppliers and involve them in your strategy

• Introduce suppliers to your maintenance team so that they can understand the needs of the engineers

• Challenge suppliers to provide solutions and thought leadership that will help your organisation

Achieve stakeholder alignment
Why do this?
Stakeholder alignment is a vital part of a successful MRO strategy. The key driver of indirect procurement is, as Mike England observes, “to maintain a facility and avoid downtime. The costs of downtime can be huge, so procurement need to understand the engineering community’s perspective. Then it’s about introducing best practices to make the most of what can be a fragmented supply base.” Ensuring that all stakeholders order from trusted suppliers is part of this best practice.

How to do this
• Listen to the concerns of stakeholders and be prepared to adapt to achieve your objectives

• Introduce change slowly and carefully

• Use soft skills to win over individuals to new ways of working

• Ask suppliers to provide evidence of the benefits of change to share with colleagues

Drive improvement through innovation
Why do this?
“Connected devices, condition monitoring and the big data they create provide significant opportunities to improve MRO and refine the whole maintenance process,” says Mike England.

Notably, the Industrial Internet of Things (IIoT) could be used to help organisations develop a predictive maintenance strategy, monitoring machines for required maintenance, rather than a reactive model.

However, the introduction of new technologies does not have be dramatic. According to Mike England: “Engineers and procurement teams won’t attempt a large-scale overhaul of equipment and processes in one go.

“A phased approach of test and learn is the most sensible way to explore the benefits of new technology.

“It is important, though, that companies get moving with this test. The pace of change will speed up over the next five years – and anyone burying their head in the sand will be left behind.”

How to do this
• Look to suppliers and industry bodies to showcase innovation

• Discuss how new technology can be used to improve the MRO process

• Test technology with the most potential to drive efficiency and productivity

• Where results of test are positive, roll out the technology across more areas of your organisation

Plan ahead to overcome external threats
Why do this?
The impact of external threats can be profound. Take counterfeit goods, for example. “Counterfeiters are becoming more and more sophisticated, which means that there is always a risk as soon as an organisation makes a purchase outside its trusted supplier network,” explains Helen Alder.

“The chance of this is even higher in the MRO category, as maverick spend is a well-known problem. As soon as people go online and select the cheapest option that isn’t from a trusted supplier, they open themselves to a risk that can’t be underestimated,” she adds.

“A faulty part could cause extensive damage and downtime; in the worst case it might even injure an employee. It just isn’t worth that risk for the sake of saving a few pounds.”

How to do this
• Select suppliers that you can trust based on their credibility and the checks and assurances they provide

• When securing contracts, factor in clauses that allow for price renegotiation in light of currency fluctuations and tariff changes

• Examine supply chains in order to anticipate the direct and indirect effects of new processes

• Review the skills within your procurement team, and then act to secure additional support



Read more about navigating changes in MRO procurement in the Indirect Procurement Report 2018: drivers of change and how to respond whitepaper.