Why a good MRO strategy will only succeed if you ensure stakeholder buy-in across your organisation
The idiom “a chain is only as strong as its weakest link” is apt for the indirect procurement process. Highly complex in nature, effective (and cost-efficient) indirect procurement relies on different stakeholders following the same strategy and working together.
Despite this, the 2017 Indirect Procurement Report conducted by RS Components and the Chartered Institute of Procurement and Supply (CIPS) found that just 26% of procurement professionals feel that there is high alignment of stakeholders with their organisation’s MRO purchasing approach.
“The whole point of MRO is that you need to source products quickly,” says Helen Alder, Head of Knowledge at CIPS. “If they aren’t supplied quickly, then there will be an issue that affects your business, potentially that it can’t keep going until the parts arrive.
“If, as an organisation, you make procurement easy for those people to purchase what they need under contract and you agree those contractors with them and your finance team – bring all key stakeholders into alignment – then it’s possible to avoid downtime and keep the whole process running smoothly.”
"Companies that have had huge success in driving procurement gains are the ones with the most alignment"Peter Malpas, President for EMEA, RS Components
Avoiding maverick spending
Another potential issue arising from a lack of stakeholder alignment is the risk of maverick spending by end users and engineers, which could lead to counterfeit or sub-standard products being purchased from non-trusted suppliers. “The risk of not having stakeholder alignment is that different parts of the business make their own procurement decisions,” says Alder. “This can lead to people ordering from non-approved suppliers, which means that there is no overall strategy.”
By focusing on good internal communication and emphasising the benefits to everyone in the business of a “joined-up approach” to MRO procurement, it should be possible to bring together different stakeholders. “Those companies that have had huge success in driving procurement gains in what is a complex product category are the ones with the most alignment,” says Peter Malpas, President for EMEA at RS Components. “This is because of the breadth and depth, the amount of vendors and the amount of products.
“The procurement team are intrinsically working closely with operations, production, engineering and inventory teams and they’ve mapped the stakeholders to recognise that you can’t be successful in your consolidation of MRO procurement unless you are aligned to those other stakeholder groups.”
While affecting change across multiple stakeholders will never be a quick win for organisations, creating a clear vision for your business and communicating this with key influencers within the organisation should ensure that the time and effort expended are rewarded.