RS Components (RS), the trading brand of Electrocomponents, the global distributor for engineers, has created a formalised end-to-end process that can be applied to all customers to help them achieve significant savings on MRO procurement.
The Value Process has been marked with the launch of a portal sharing valuable information, including white papers developed in partnership with Manchester Business School and a Linkedin group ‘RS MRO Procurement’.
RS conducted in-depth research to unveil inefficiencies in MRO procurement, from which it developed the Value Process, focusing on optimising of a range of key areas to unlock savings.
RS Components country manager Didier Goguelin explained: “RS has an unrivalled data capability when it comes to customer information, which is why we decided to use this as the basis to explore consumption habits to find the inefficiencies in MRO procurement. The goal was to help customers achieve savings, as we know many of them are aware of inefficiencies but do not know how to address them or believe it is too large or troublesome a task.
“We discovered that the true cost of MRO procurement is a ratio of 3:1 of procurement versus product costs. A staggering figure which shows just how important analysis of consumption is in unveiling savings. Our findings were powerful and we wanted to ensure they stood up to scrutiny, so invested in a partnership with Manchester Business School, which independently verified the findings.”
The process covers five key areas: optimisation of product, inventory, supplier and process, and pricing solutions. RS has concluded that concentrating on fewer, better quality products that can reduce energy consumption and maintenance costs; reducing stock to improve cash flow and avoid cases of obsolescence and reducing downtime in supplier management, ordering and invoices can reap savings of up to 35% on MRO.
In addition, once the key areas have been optimised, the pricing solutions can be addressed and in many cases, customers can gain better deals.
Didier added: “A key savings area is the categorisation of products; by removing category boundaries and focus on quantity, regularity of use and criticality to the job can reap huge cost savings, but when applied to a multi-site organisation, savings are remarkable. Our data capability is what provides the basis for analysis that can generate these kinds of savings, and we handle the whole analysis to remove the hassle factor for customers.”
In addition, RS has further demonstrated its commitment to unlocking savings for customers with sponsorship of events by the Chartered Institute of Procurement and Supply (CIPS) – a leading global force in procurement and supply. RS is providing sponsorship of three events, two round table conferences and two webinars – bringing the MRO saving findings to senior financiers.