There are maintenance, repair and operations (MRO) surveys that show that “quick response and product knowledge” combine for over 75 percent of what was important to plant management; price is less than 8 percent of the consideration and fulfillment programs just 3 percent.
Most company managers say that service and knowledge outranks price when, in the real world of MRO, price is dominant because the discipline placing the order is purchasing. The job of purchasing is to buy it cheaper. “What is your price and delivery?” is the first question. “I need a quote” and “Can you quote?” are phrases that open negotiations. Don’t forget the infamous Market Basket Quote that is hugely expensive and inconclusive in vendor selection; why do it if it is only 8 percent of the consideration?
In addition, purchasing professionals assume that they will obtain the needed service and knowledge and still get the best price. This is their mantra. If a line is down and an engineer places an order around purchasing just to get the part when needed, there is still a discipline that will question the higher price justification: “E&B could have delivered for $100 less.”
Second, just 3 percent thought programs focusing on streamlining fulfillment were important. If a major focus was concentrated on fulfillment, reliability and the function of a world-class MRO operation, then 75 percent of what was important to the plant would be realized.
Studies show what plant management wants and needs; will anything move away from price first to fulfillment? Will the suppliers offer programs to streamline (only 3 percent thought it important)? If things are improved, will the company invest in stores management to sustain the gains? The real world of MRO shows that most companies do not recognize that MRO is a gold mine for cost recovery and reliability improvements. Why does the condition continue to exist? There are myriad reasons, but the fact remains that improvements are few and rarely sustained to the detriment of maintaining a reliable plant.
The answer is that food manufacturers should not be in the hardware store business, also known as the MRO Storeroom. Just as the cafeteria, security, etc. are left to experts, so should stores operations. A third party MRO (3PMRO) expert provides a stores operation connected to maintenance reliability programs and does so at an optimum total cost of ownership (TCO) level. The 75 percent need would be satisfied and done so with key performance indicator (KPI) control to satisfy all disciplines.
A reliable plant requires reliable equipment, which in turn requires a reliable MRO stores operation. Without a connected storeroom support system, maintenance reliability programs fall short of goals.
George Krauter currently serves as Vice President for Storeroom Solutions, Inc. Mr. Krauter’s career began in Philadelphia and carried him through management capacities in all disciplines of the indirect materials supply chain, making him an authority on innovative methods in distribution and MRO outsourcing. Contact George at firstname.lastname@example.org.