Lean opportunities in MRO procurement
This white paper explains how to reduce unplanned purchases and improve productivity through better managed inventory.
Indirect procurement activities concern operating resources that a company purchases to enable its operations. It comprises a wide variety of goods and services, from standardized low-value items like office supplies and products used in facilities maintenance, repair and operations (MRO), to complex and costly goods and services like heavy equipment and consulting services. Purchasing organizations in many industries sometimes assume incorrectly that “just-in-case” stores of indirect goods, specifically those used in the maintenance and repair of plants and facilities, are less costly than the cost of downtime or lost production. The perceived pain of not having what may or may not be needed in an emergency or downtime situation often creates inventories of things that are never used or become obsolete or damaged. In lean terms, these underutilized or obsolete inventories, and the associated procurement activities are considered waste, or muda. This white paper explains how to reduce unplanned purchases and improve productivity through better managed inventory.