How MRO procurement can be A Hidden Excess Inventory

Posted by admin on May 19, 2020  / 
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Mro procurement to excess inventory

What is MRO

MRO Purchasing or Maintenance, Repair, and Operation is essential for a successful business. Every Industries production and delivery of products depends on how we maintain the machinery/equipment.

MRO Role in Every industry

Machinery/Equipment in every industry had to maintain properly for good production and profitability of the organizations. In today’s competitive world each day comes up with different challenges that are difficult for each business to sustain in the market.

One of the most critical challenges among this is the procurement of MRO spares for the Industry or Machinery.MRO items are the most required things in every industry to maintain good productivity.

This direct and indirect procurement of MRO spare parts for the industry could lead to a large amount of spend if data are maintained improperly.

Some of the Industries fail to maintain their MRO procurement and spend on the specific procurement which leads to excess inventory and loss of high value from the organizations.

How Excess inventory?

The business will be running according to the needs of the customer or End User. To meet the business goal MRO procurement helps to fulfill the demands.

If the demand forecasting exceeds needs leads to Excess Inventory. Poor maintenance of data in the warehouse leads to Excess Inventory and it will result in High MRO spend.

It affects the total cost management of the industry. These hidden costs of MRO procurement will eat the income for every industry. These can be resolved by making strategy for the MRO Procurement

Strategies of MRO Procurement

To control the procurement to avoid any loss without preventing any shortage and reduce the cost of the product it is necessary to implement a Standard operating procedure according to their own needs and in the evolutionary remarkable SOP are followed by many industries and it flows as a strategy.

Standard Operating Procedure for industry

Below is the standard operating procedure that can follow to maintain the procurement of MRO spares and reduce spend on MRO procurement.

It reduces excess procurement of MRO items for the industry

  • Supplier Optimization
  • TQM
  • Risk Management
  • Global Sourcing
  • Vendor Development
  • Green Purchasing

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