Common Challenges in MRO Procurement
MRO (Maintenance, Repair, and Operations) procurement is crucial for any organisation, but it comes with its own set of unique challenges.
Here are some of the most common ones:
Managing a Vast and Diverse Catalog:
MRO items range from nuts and bolts to specialised machinery parts, chemicals, and safety equipment. This enormous variety makes it difficult to standardize, categorise, and track inventory effectively.
Maintaining Optimal Inventory Levels:
Striking the right balance between having enough MRO parts to avoid downtime and not holding excessive, costly inventory is a constant struggle.
Overstocking: Ties up capital, incurs storage costs, and increases the risk of obsolescence. Understocking: Can lead to production stoppages, increased rush order costs, and missed deadlines.
Unplanned Demand and Emergency Purchases:
Equipment breakdowns and unexpected maintenance needs often lead to urgent, unbudgeted MRO purchases. These rush orders typically involve higher prices, expedited shipping costs, and less favorable terms, eroding cost savings.
Lack of Data Visibility and Analysis:
Many organisations struggle with fragmented data across different systems, making it hard to get a complete picture of MRO spending, supplier performance, and consumption patterns. Without this data, strategic decision-making is severely hampered.
Supplier Management Complexity:
Organisations often deal with a large number of MRO suppliers, each with different terms, pricing, and delivery capabilities. Managing these relationships, negotiating contracts, and ensuring consistent quality can be very time-consuming.
Maverick Spending and Non-Compliance:
Due to the urgent nature of some MRO needs, employees sometimes bypass official procurement channels to quickly acquire parts. This "maverick spending" leads to higher costs, lack of control, and difficulty tracking purchases.
Obsolete Parts and Lack of Standardisation:
Over time, machinery is updated or replaced, rendering old MRO parts obsolete. Without proper inventory management and standardization efforts, these obsolete parts accumulate, wasting storage space and capital.
Total Cost of Ownership (TCO) Blind Spots:
Focusing solely on the purchase price of MRO items often overlooks other significant costs like shipping, storage, inspection, and the cost of downtime caused by a low-quality part. A true TCO perspective is often missing.
Addressing these challenges requires a strategic approach, often involving technology solutions, process optimisation, and strong collaboration between procurement, maintenance, and operations departments.
Focusing on Collaboration and TCO
" We know procurement is pressed for price cuts, but the future of MRO success lies in collaboration. By working with Maintenance, Engineering, and Finance on a TCO model, we move procurement from a cost center to a strategic value-add for the entire business. "
The Cultural Hurdle:
Breaking the "Status Quo Bias"
Especially when the immediate financial benefits are not tangible or obvious.
- Many organizations suffer from the "status quo bias," accepting chronic inefficiencies because "that was just the way it was!". The classic example is personnel turning up the radio to drown out a noisy conveyor, rather than investigating the root cause—inefficient bearings forcing the motor to expend extra energy.
- We challenge the status quo by turning hidden symptoms into measurable costs. Our Operational Audits look beyond the purchase order to identify these critical inefficiencies. By replacing inefficient components (like those noisy bearings) and providing products of superior quality, we deliver tangible, immediate savings on energy consumption and prevent future motor failure. We make the financial benefits of change obvious and compelling.
unable to align goals or share critical information.
- A significant challenge is identifying the right data needed to calculate TCO and gaining access to the people who hold that information. The disparity between how procurement teams purchase supplies and how the shop floor needs to operate creates unnecessary conflict.
- We act as the integrator, helping you build a single source of truth for MRO spend and usage data. Our reporting capabilities help bridge the gap by providing clear, unbiased metrics that align the goals of Procurement (cost savings) with Maintenance (asset reliability). By providing comprehensive purchasing data, we enable you to build a powerful business case that demonstrates the positive financial impact of TCO reduction.
The Organisational Challenge:
Bridging the Data Divide
The Personnel Problem:
Utilising Staff Time Effectively
Businesses must then ensure this freed-up time is used for high-value activities.
- Streamlining and automating processes frees up staff time, but since personnel remain employees, the salary costs still exist. The challenge is knowing how best to spend that newly available time.
- Our Vendor-Managed Inventory (VMI) programs and vending solutions automate the non-core, time-consuming tasks of stock management, freeing your employees from chasing parts, raising numerous purchase orders, and inventory counting. We then work with you to ensure these valuable personnel are re-deployed to jobs they are most skilled for, focusing their expertise on strategic, revenue-generating tasks rather than administrative hassle. This allows you to calculate significant savings on staff hours, maximizing your labor investment.
Howcroft Group is dedicated to helping manufacturers elevate their MRO strategy. We move the conversation from "lowest price" to long-term profitability, providing the tools, data, and partnership required to overcome cultural inertia and realize substantial, sustainable savings across your business.
Partnering for Sustainable Savings
Howcroft Industrial Supplies operates as a crucial link in the manufacturing sector, providing a vast array of products that keep factories and production lines running smoothly. Here's a breakdown of their role:
Diverse
Product Range:
Howcroft supplies everything from raw materials (metals, plastics, chemicals) to specialized components (bearings, fasteners, electrical parts) and maintenance, repair, and operations (MRO) items (safety equipment, cleaning supplies, tools). This comprehensive offering makes them a one-stop shop for many manufacturers.
Ensuring
Operational Continuity:
By providing timely access to necessary supplies, Howcroft helps manufacturers avoid costly downtime due to shortages of parts or materials. Their efficient logistics and inventory management are critical.
Supporting Efficiency and Productivity:
High-quality
tools, modern machinery components, and effective MRO supplies directly
contribute to a manufacturer's ability to produce goods more efficiently,
with fewer defects, and at a higher output.
Technical Expertise and Support:
Often, industrial suppliers like Howcroft also offer technical advice, helping manufacturers select the right products for specific applications, optimize their processes, and troubleshoot issues. This can include guidance on material properties, equipment compatibility, or safety standards.
Cost Optimization:
Through bulk purchasing, established supply chains, and competitive pricing, Howcroft can help manufacturers reduce their procurement costs, allowing them to allocate resources more effectively to other areas of their business.
Facilitating Innovation:
By introducing manufacturers to new materials, advanced components, or improved tooling, Howcroft can indirectly support innovation in product design and manufacturing processes.
Supply Chain Resilience:
In an increasingly global and sometimes volatile supply chain landscape, a reliable local or regional supplier like Howcroft can provide a stable source of essential goods, mitigating risks associated with international shipping delays or geopolitical issues.
Example Scenario:
Imagine a car manufacturing plant. Howcroft Industrial Supplies might provide:
1. Raw Materials:
Sheets of steel or aluminum for body panels, various plastics for interior components.
2. Components:
Nuts, bolts, washers, specialized fasteners, bearings for rotating parts, wiring harnesses, electronic sensors.
3. MRO:
Industrial lubricants for machinery, welding equipment, safety glasses, gloves, respirators for workers, specialized cleaning agents for equipment, spare parts for their assembly line robots.
2,000+ UK companies use Howcroft Group to service and grow their businesses.
Join us and optimise your MRO Supply flow.