World-class industrial distributors, like Howcroft Group, constantly face the dilemma of proving that the lowest-price supplier is not the lowest-cost provider.
We understand the complexity created by internal job requirements, where Procurement seeks price reductions, Finance demands lower inventory, while Maintenance and Engineering require critical spares and asset reliability.
Our strategy is built on overcoming this conflict by applying TCO concepts that deliver substantial, sustainable savings across your entire business.
The Hidden Cost of "Low Price"
Focusing solely on the unit price is not the route to sustainable savings. The true cost of MRO procurement is often a 2-to-1 ratio of processing cost versus product cost.
We help you expose the hidden expenses of ad hoc purchases, which include:
Process Costs:
Setting up multiple vendors and raising numerous purchase orders.
Downtime Risk:
The financial losses caused by not having the right items in the right place at the right time.
False Economy:
Buying cheaper, poorer-quality products that require more frequent replacement.
The Howcroft TCO Strategy: Four Pillars of Value
To satisfy the needs of all four departments (Procurement, Finance, Maintenance, and Engineering) and drive sustainable change, Howcroft Group provides a collaborative TCO approach:
1. Supplier Consolidation & Partnership:
o We advocate for consolidating spend with fewer, trusted suppliers to naturally
reduce overall basket costs and increase spend leverage.
o Managing fewer suppliers allows for stronger relationships, better pricing, and more consistent service delivery.
2. Engineering & Procurement Alignment:
o We work closely with your engineers to ensure you are securing the right parts needed to maintain ageing assets and prolong equipment lifecycles.
o We help standardize what you buy, using our expertise to move you away from obsolete and non-compliant items.
3. Inventory & Efficiency Management:
o We support cultural change by providing value-added services like vendor-managed stock initiatives (like our vending solutions) to mitigate inventory risk.
o By analyzing historic MRO purchase data, we help identify commonly required items, ensuring they are available when and where you need them.
4. Security of Supply:
o As your trusted partner, we help you manage supply chain risk and ensure security of supply—a strategic priority following recent industry lessons.
o We conduct thorough audits and due diligence, mitigating the reputational and financial risks associated with sourcing from unreliable suppliers.
By adopting this collaborative TCO approach, Howcroft Group helps your organisation achieve sustainable savings while simultaneously increasing asset reliability and driving business value.
Challenging the Status Quo
" The biggest challenge in MRO is breaking the status quo bias. Our job isn't to just sell cheaper products; it's to challenge your organisation to look beyond the unit price and see where the real, sustainable savings are hidden. "
