Maintenance, repair and operations, MRO, is a major cost in sectors like healthcare, hotel chains and manufacturing. Yet any business with multiple plants, warehouses and offices must spend money to keep these facilities running in good condition.
You can attain significant savings and enhance working capital efficiency by monitoring your MRO expenditures and applying indirect spend management discipline, because many MRO expenses like fasteners, fittings and cleaning products are low cost and fall below approval thresholds. Yet like office supplies, these small yet frequent purchases quickly add up over the course of a financial year.
Results of 2018 warehousing and manufacturing business survey by Peerless Research Group
- 94% consider MRO either extremely or somewhat important to operations.
- 25% of respondents expected to spend more on MRO in 2018 than they did in 2017, while 69% believed they would maintain current spending.
- One third of the companies spend over one million dollars and up to $20 million annually on MRO.
- Safety gear, supplies and tools, forklift repair services, spare parts and components and third-party maintenance and monitoring of automated equipment and automatic data collection devices are some of the biggest MRO expenses.
MRO spend management challenges
Maintenance and repair costs are a good target for spend management programs and services, as they involve a number of characteristics that are indicators of significant savings potential:
- Fragmented vendor options and supplier relationships.
- Independent silos of actions and decisions across locations.
- Poor spend data visibility as MRO expenses are seldom managed by internal resource planning systems.
While MRO happens in the background, it’s a critical function for many businesses, with potentially serious consequences: safety, regulatory compliance, production uptime and daily operations. If your business faces any of these challenges, the spend management experts at LAC Group can deliver some of your greatest benefits through objectivity, expertise and the ability to reduce expenses without jeopardizing operational performance.
How LAC Group reduces MRO expenses
We begin with a current-state assessment, working with you to develop a plan and structure an appropriate spend management program. Some of the methods and tactics we employ include:
- Assessing MRO product utilization and depletion rates.
- Analyzing typical resupply lead times by item and supplier.
- Consolidating and leveraging purchases across multiple facilities.
- Monitoring warranties to pursue no cost or low cost replacement or repair.
- Checking invoices to flag errors and irregularities and recover discounts.
We only get paid when you save
Our contingency-based pricing means our services pay for themselves. We only engage with clients when the savings potential is great enough to increase your bottom line with a small portion to pay our fees.
The holistic, managed services approach of LAC Group
- Every client engagement begins with an assessment of your operational and financial concerns, goals and objectives.
- We work with the staff and systems you have in place.
- Our programs and services are structured on a spectrum that ranges from “help us manage” to “manage for us” based on your needs and circumstances.
Can we help you control your MRO costs?
Assessing utilization patterns, identifying available options to help you choose the right one, guiding contract negotiations and management for terms and conditions, assuring invoice accuracy and tracking renewals—these are a few of the ways we can support the procurement process and reduce your company’s expenses for maintenance, repairs and operations.