When you think about procurement, what comes to mind? Is it the big strategic sourcing events, like multi-million dollar ocean freight contracts? Or is it everyday things, like ensuring the office has enough Post-It notes and pens for the onsite brainstorming sessions that will fuel your Q3 strategy? The truth is that successful organizations need both types of procurement in order to run smoothly. Maintenance, repair, and operations (MRO) procurement is a crucial part of any procurement strategy, ensuring that the day-to-day needs of your business—like office supplies, cleaning services, and repairs and maintenance—are taken care of so your business can run seamlessly. In this blog post, we’ll cover everything you need to know about MRO procurement and sourcing—and how you can optimize it to give you a strategic advantage.
Maintenance, repairs, and operations (MRO) procurement refers to the process of sourcing and acquiring the goods and services you need to keep your ongoing operations running efficiently. This includes things like:
Spare parts for machinery
Maintenance and repair services
Equipment that workers need to do their jobs, such as technical equipment (like laptops) or safety equipment (like hard hats and PPE)
Cleaning supplies and services
Office supplies
Since these goods and services are not directly used to produce your business’s final product or service, they’re considered part of your business’s indirect procurement. For most companies, MRO procurement makes up one of the largest percentages of their indirect spend. This means that a thoughtful MRO procurement strategy is essential: not just to maintain operational efficiency, minimize downtime, and enable employees to work safely and productively, but also to give you visibility into your overall spend and identify ways to strategically reduce business costs.
4 key challenges in MRO procurement and sourcing
Every type of procurement has its own specific considerations. Here are some of the challenges of MRO procurement and sourcing to keep in mind.
1. Supply chain disruptions
Our Voices of Sourcing 2024 report revealed that 74% of procurement professionals struggle with unpredictability due to supply chain disruptions and market volatility. As “unprecedented times” become more precedented, procurement teams need a robust MRO procurement process to help them quickly respond to changes.
Whether caused by environmental, economic, or political factors—or the occasional big boat stuck in a canal—disruptions in supply chains have significant impacts. The sooner you can respond to these issues, the better equipped you are to mitigate risk and avoid escalations that can affect your business.
2. Inventory management
One of the biggest challenges in MRO procurement and sourcing is finding the delicate balance between reactivity and proactivity. On the one hand, procurement teams need to proactively stock up on key inventory items—like spare parts for essential machinery—in advance, so their business can immediately fix issues and minimize disruptions. But on the other hand, overstocking can lead to budget shortages, storage issues, and an increased risk of waste (like items becoming obsolete before they get used).
3. Time-consuming sourcing processes
For many procurement teams, MRO sourcing and procurement involves repetitive, time-consuming tasks that take up a disproportionate amount of their resources. Managing an endless stream of high-volume, low-value transactions means your procurement team doesn’t have time to spend on more strategic sourcing events that drive long-term value for your business.
4. Lack of spend transparency
With so many MRO transactions dispersed across multiple categories, teams, and suppliers, it can be difficult to get clear data on category spends and total costs across the business. This is especially true for teams who still use old-school ways of working like spreadsheets and emails. These outdated, inefficient procurement methods make it almost impossible to track, predict, and analyze your spend because key data is siloed and incomplete.
MRO in procurement best practices
1. Adopt a best-in-class procurement and sourcing tool
Implementing the right procurement tech stack will completely transform your MRO procurement and sourcing. Using an AI-powered sourcing tool like Keelvar, you can:
Centralize all your MRO procurement and sourcing data to give you greater visibility and fuel data-driven decision making
Use Autonomous Sourcing to automate up to 100% of your procurement workflow to reduce manual work for your team—without sacrificing cost savings
Empower requesters to self-serve with predefined workflows that automatically scale your sourcing best practices and ensure compliance
Win back hours for your procurement team to spend on high-stakes, high-impact strategic sourcing instead of repetitive admin
Combine sourcing automationandsourcing optimization in one easy-to-use tool to drive the best results for tactical, tail, and strategic spend
Keelvar’s user–friendly interface makes it easy for requesters to kick off automated sourcing events that meet your procurement team’s best practices
“As one of the early adopters of Keelvar’s AI sourcing solution, I can honestly say it’s been groundbreaking for us in the Coca-Cola system. We now have a structured digital solution to manage all our ‘Off Tender’ requests, removing hundreds of emails from our inboxes on a weekly basis.”
—Alan Smith, Procurement Director – Global Logistics (CEPG), Coca-Cola
2. Centralize your data
Another benefit of using an all-in-one eSourcing solution to manage your MRO procurement is that it collects all of your data in one central place. This gives you greater oversight and visibility, so you can easily analyze your spend and find opportunities to improve.
3. Schedule regular maintenance procedures
Staying on top of regular maintenance keeps everything running smoothly and reduces any nasty last minute surprises. Having these maintenance procedures in the calendar also helps you to predict and project spend, as you can budget for them in advance.
4. Implement asset lifecycle management
Adding an asset lifecycle management tool to your procurement tech stack lets you easily monitor and manage inventory levels. Even better: integrate your asset lifecycle management tool with your eSourcing platform to trigger automated sourcing workflows when your inventory drops below a certain level. This means you never have to worry about running out of essential items—so your procurement team can focus on the big picture, confident that every small detail is already taken care of.
Connect Keelvar with your inventory management tool to trigger automated sourcing workflows when supplies get low
5. Monitor key performance indicators
As you improve your MRO procurement and sourcing, you should quickly start to see tangible improvements. Continuously measure your performance using key performance indicators (KPIs) and metrics that map to your business goals to track progress and make it easier to share results with stakeholders. For example, if one company objective is to reduce costs, you can compare factors like category spend and maverick spend before and after implementing your MRO optimization strategy.
Investing in your supplier relationships can elevate them from transactional contracts to strategic partnerships. The right approach to vendor management lets you build strong, sustainable relationships with your suppliers, helping you both to grow. Using an eSourcing platform helps here too: by managing all of your supplier communications from one central place, you can remove silos, provide feedback, improve transparency, and give regular updates, all of which foster collaboration and trust.
MRO sourcing best practices
The above best practices will help you optimize the MRO procurement cycle from beginning to end—but here are some additional tips for the MRO sourcing process to set you up for maximum success.
Diversify your supplier base
When you’re stuck in a reactive sourcing cycle (like emergency repairs or spot sourcing), your supplier choices are often limited. With an eSourcing tool, you can proactively diversify your supplier base, enabling you to mitigate supply chain risks and make better sourcing decisions based on a range of factors.
Automate what you can
Leveraging automation is one of the best things you can do for your MRO sourcing. With Autonomous Sourcing, AI-powered bots automatically select the right suppliers, ensure a competitive and compliant bidding process, and identify the winning contract based on in-depth analysis across a range of price and non-price criteria—reducing manual work and freeing up your team for more strategic sourcing.
With Autonomous Sourcing, bots can handle everything from supplier selection to contract award, removing up to 100% of manual work
Enable requesters to self-serve
Another impactful way to reduce MRO sourcing work for your procurement team is to empower business users to do it themselves. Autonomous Sourcing enables users to kick off automated sourcing events for low-value or urgent spot buys using natural language—no training needed. And because the bots adhere to workflows and controls set by your team, you ensure full compliance and visibility.
“We’ve got this awesome [Sourcing] Optimizer that we use to run large scale, complex sourcing events. But then we’ve also got the autonomous sourcing piece of it now, which is built onto the Optimizer, so you don’t even have to train the teams to use it. You now have a bot do all the work of building and creating the events for you.”
—Sam de Frates, Vice President, Commercial – Europe, CIS & Turkey, Mars
Streamline MRO procurement and sourcing with Keelvar
MRO procurement is vital—but getting stuck on a never-ending treadmill of admin isn’t. With the right eSourcing tool and a few strategic best practices, you can navigate the challenges of MRO procurement and sourcing, automate workflows to optimize efficiency and decision-making, and ensure all of your procurement contributes to big picture business goals. Want to learn how Keelvar can help you improve your MRO procurement and sourcing?
.svg)
.png)
