Choosing the right place to buy Maintenance, Repair, and Operational (MRO) supplies is a key decision for manufacturers. Even though these supplies are not part of the finished product, they have a tremendous impact on the efficiency and effectiveness of production.
Not only is MRO important, but studies have shown the value of supplier consolidation, as shown in this study from The Hackett Group:
“By simplifying and automating interactions with preferred suppliers, procurement can more effectively work these relationships beyond just cost savings, to include support for more strategic enterprise imperatives regarding sustainability, innovation, risk reduction, diversity, localization and other key objectives. As hard-dollar savings become ever more challenging to squeeze from traditional product sourcing, harnessing these broader benefits is where the greatest opportunity to gain competitive advantage will be found.”
The current landscape contains more options than ever, but due to MRO’s importance manufacturers should be more selective in who they partner with. To make optimal choices they should first figure out what their needs are. Once that is done it is becomes much clearer who best meets those needs for a partnership.
Here are the major questions that should be considered to put yourself in position to make the optimum strategic decision.
- What Products/Brands do I need?
A broad product selection is great, but it’s important to see how the selection aligns with need. There are very likely specific products and brands that can’t be compromised. If possible find a supplier who can support each of these.
Understand the reality of your business, not just how it runs on its best day. How important is local delivery? There will always be advantages to having physical stock close to the point of use. Does your processes require extensive local support, or do you have systems in place that can absorb potential supply chain interruptions to achieve lower potential cost?
- What technical support / product expertise do I need?
Some manufacturers are better suited to be self-supporting in regards to product and engineering expertise than others. As the MRO world is constantly growing and evolving, here is my question to you: Do you need supplier partners who will keep you aware of these changes, or will you just handle them yourself?
If you want your top people to focus on the production side, then it is important that your supplier partners have technical expertise and can to offer quick solutions, in addition to products.
- Am I more focused on price or TCO?
This is a time to be honest with yourself. Does your business take a longer range view that puts an emphasis on the total cost of ownership, or does the purchase price take priority? There are situations where both are appropriate, and determining where limited funds can be allocated will determine where you may bargain shop and where you will invest in a deeper relationship with a distributor.
- How interested am I in outsourcing?
Suppliers can offer a host of different services, from Vendor Managed Inventory, Vending, Consignment, and other integrated supply chain activities. How well do your internal processes function? Does material flow smoothly through the plant, or are there areas of inefficiencies or a lack of manpower that draws focus away from the value chain? If there are opportunities for improvement then look at the quality of the distributor’s service offering and see how that could solve some of your problems.
At Martin, we are take pride in the value and service that we provide on a daily basis to our customers. We specialize in providing the brands that are needed, carrying the inventory that our customers require, and providing technical expertise with a focus on providing the minimum total cost of ownership. If that’s the kind of distributor you are looking for we take the customer/distributor relationship seriously and will provide you with the highest level of customer service.