Consolidating suppliers can save time and support safety compliance
Procurement teams and engineers face many challenges regarding the maintenance, repair and operation (MRO) of their organisation’s assets and facilities. The supply chain for indirect materials is complex due to the number of stakeholders involved, a fragmented supply base and the quantity of products that are split across categories.
There is also constant pressure from senior management to reduce costs. One way to respond to these challenges is by streamlining processes – and here is an example of the benefits this can generate.
The challenge
A setup at a major power infrastructure firm illustrates how complex MRO procurement can be. The company has 3,000 engineers that work at manned and unmanned sites around the country. On any given day, 25 different locations may need new supplies, so finding an efficient way to handle orders is essential.
Safety and compliance are also paramount concerns for this organisation. Its standard operating procedures state that certain products must be used, otherwise its work is invalid, which makes these items critical supplies.
As an example, the company’s standard operating procedures specify that its engineers use cold-shrink tubes and end caps to seal off pipe joints for gas connections in residential and commercial premises. The benefit of cold-shrink products is that no hot work permit is required – and therefore neither is a risk assessment nor method statement. This, in turn, saves time and resources.
The organisation began using cold-shrink tubes and end caps a number of years ago, purchasing them directly from an OEM. After some internal changes, it turned to RS instead.
“Most important is compliance,” says the firm’s MRO Senior Buyer. “We need to purchase items from a contracted supplier rather than an un-contracted one. It’s very important in this line of work. Worst-case scenario: we purchase an item that’s caused an accident and there’s no contract in place; who is liable?”
The solution
The best way for the company to ensure compliance with the stringent safety requirements was to work closely with a trusted contract supplier. As its MRO Senior Buyer notes, “With a contracted supplier, there’s a genuine binding agreement in place. And with RS, you know that anything you buy through them is verified to a certain quality.”
Furthermore, as the relationship between the company and RS developed, more opportunities for support have developed too. “During my time managing the contract, I learnt about Product Plus,” states the MRO Senior Buyer. “It was a case of if something was already working well for other firms, then let’s see if we could make use of it too.”
Product Plus allows authorised employees to source a vast number of products, including items not published on the RS website: over a million items from more than 2,500 manufacturers. Whereas sourcing items across multiple vendors is inefficient and time-consuming, consolidating purchasing with Product Plus reduces purchase orders, saves time to source items and helps companies to leverage spend. The Product Plus team will advise whether an alternative compliant product offering functionality or value for money benefits is available. The team also provide a quote and expedite orders for delivery to site or a local branch of RS.
The network of local branches is also a useful part of the support that RS provides for this organisation. Core items that they need frequently are delivered on a regular basis to its national delivery centre from the nearest RS Local branch, while larger items come directly from the nearby RS distribution centre.
The outcome
Working closely with RS has brought numerous benefits for the firm. Product Plus has enabled the company to consolidate its tail-end supply and reduce the number of suppliers. This means better control of the supply chain process.
Innovations such as this have clear advantages. With MRO procurement, the process costs can be as much as twice the price of the product itself, especially for low-value items. Streamlining reduces this figure.
There are also significant time savings, particularly with high sales volumes. Over a 12-month period, two-thirds of this organisation’s total spend with RS went on 25 key parts that are sourced through Product Plus. “Product Plus helps to free up some time from a purchasing point of view that if RS didn’t provide this service, we could potentially be doing this ourselves, starting from scratch every time,” says the MRO Senior Buyer. “This way I just make a phone call or email RS. They provide me with a quotation and lead time or give me some alternative compliant options. Then it’s just a matter of raising the order. It saves a lot of time.
“Product Plus definitely works for us,” they continue. “It saves time, effort and most importantly, it keeps our sourcing compliant”.
For more information about Product Plus, click here
