Blog

Blog

Finding the True Total Cost of Ownership (TCO) Within the MRO Category

Finding the True Total Cost of Ownership (TCO) Within the MRO Category

Every product or system costs money.  But it’s about more than the product or system itself.  The Total Cost of Ownership (TCO) must consider a variety of factors, including the indirect costs associated with the product or system, including big ticket items like labor.

Finding the true Total Cost of Ownership (TCO) within the Maintenance, Repair and Operations (MRO) category begins at the very start of any purchasing process to help procurement discern the most cost-effective way forward in a competitive environment.

Maintenance, Repair and Operations (MRO)

Getting MRO indirect spend in line can be a very involved undertaking.  MRO is a complex category with many moving parts. It takes in everything on the manufacturing floor, including cleaning supplies.  The variety of goods found under this category is dizzying, making it an area of indirect spend which can be difficult to rein in.

But there’s more to tracking TCO in the MRO category than parts and products.  It’s also about understanding when items in the category are needed. While stopping production may be required to replace machinery and parts, that’s a costly endeavor and one which will disrupt the supply chain and delay delivery times.

A plethora of suppliers needed for a wide variety of items and the opacity around spending at the SKU level can make effective supplier management and strategic sourcing tough.

Adding even more complexity is the relationship between procurement and people on the shop floor.  There’s a disconnect which too often occurs as silos arise. There’s a need for flexibility in the questions of sourcing in this regard but the process needs to be uniformly managed, at the same time.

And then there’s the problem of any given operation’s various facilities communicating.  Different facilities source different suppliers for the same goods and services, creating an unruly beast of a supply chain.

Economies of scale which might create better opportunities for procurement are sidelined in siloed environments and that costs money.

Enter the beast wrangler

Discerning TCO in the MRO space is no mean feat, so calling on the services of a GPO with focused experience in wrangling the beast is the way forward.

Your supply chain needs must be understood in a process-driven way.  Getting a handle on your goals and figuring out where pain points in the process exist is how CenterPoint Group starts taming your MRO supply chain beast.

Data drives our solutions, but so does observation of processes on the shop floor and how staff there is interacting and collaborating with procurement.

Organizations like yours need a Group Purchasing Organization like ours.  We bring the resources, analytics and experience you need to tame that beast and get it working for you and reducing your TCO in the MRO category.

Working with the procurement professionals at CenterPoint, you’ll join a membership which has the power of numbers behind it and $850 million of indirect collective spend supporting it.  But cost savings are just the beginning of what we can do.

We bring the collar and leash for your MRO beast.

© Centerpoint Group LLC | All Rights Reserved