A Different World

 VALUE POINT SOLUTIONS 02By Spence Webb

What makes indirect/maintenance repair and overhaul (MRO) material management its own world, and why are purchasing and supply chain management most often involved?

Indirect/MRO is not typically a purchasing, supply chain, engineering, operations or quality function, although any/all of those can play a significant role in the success or failure in the process of managing indirect material/MRO. Many, if not most, of those functions will be assigned or absorb the duties resulting from upper management direction or strategy. It’s arguably not their core function or competence, but in some cases, they are the closest duties and functions to what’s needed.

Here’s a quick story to add some perspective. I recently went to the doctor for a problem I have with snoring. My doctor suggested I get tested for sleep apnea. After the test, the results came back negative, but the nurse who monitored my 24-hour test commented “I didn’t see any sign of sleep apnea, but you snore like a bear.”

Naturally I wanted to find some resolution to this issue for both myself and my wife. In discussing options with my doctor, he said we could do a couple of things, including see a specialist about a CPAP appliance. Alternatively, an ear/nose/ throat specialist could analyze the air canal itself. Now, while both have provided relief for many with problems related to the issue, none focus on the issue of snoring itself. Both have strategies that can impact snoring, if accepting a tradeoff (CPAP machine or surgery) but neither would guarantee success or even commit to assuring long term relief.

Similarly, in most corporations there are competent purchasing groups, supply chain and other disciplines who are experts in their field, but the proper management of Indirect Material/MRO is not their core competency because it goes far beyond purchasing.

There are computer programs that can provide options on managing data, as well as tools to properly allot and account to specific ledger accounts that provide options with usage and/or spend data. Many other options that can be utilized by in plant personnel attempting to manage internally.

However, if you consider relying on someone with a core competency in indirect/MRO material management, what you can and should expect is a group of professionals that can provide ROI to indirect by utilizing all of the tools available to the experts in the field. These include vendor/supplier management, cycle counting, SKU accuracy and data cleansing, predictive usage and usage forecasting, kitting and vending, and spend management. 

One of the most important issues in managing Indirect/MRO Material is being able to understand whether you are leaving money on the table (shelf) by lack of focus, or spending too much due to high transaction volume.

Ultimately you want and need the best product applications, with accurate usage volumes stocked on the shelf, purchased at price points based on real time usage and projections. In addition, you need the proper process and procedures while capably managing the inventory volume dynamics of in-process, on shelf, on order, of both standards and specials.

Indirect/MRO material management can provide ROI. To get there you will need to use all the tools, have all the intelligence, implement all the proper processes, and focus on the details every day to make it happen. This takes a group with focus on their core competency, while considering the best practices and techniques of all the management disciplines including purchasing and supply chain management.

Spence Webb is business development manager at Value Point Solutions. He can be reached at SWebb@ValuePointSolutions.com or 989-295-0422.

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