For most manufacturers, procurement strategies for direct spend items — such as raw materials — are carefully planned and scheduled to ensure value for money, availability and optimal inventory holding.
With indirect items such as maintenance, repair and overhaul (MRO) products and industrial consumables, however, the procurement process is typically more ad hoc.
Purchasing from multiple local suppliers, holding excessive inventory owing to unpredictable usage and thousands of transactions are common occurrences.
As the cost for each individual item is generally relatively low, rationalising procurement is not frequently prioritised; and when it is, the task can be complex and daunting.
Take, for example, a manufacturer holding 10,000 stock keeping units (SKUs), purchased by numerous individuals from stores staff to engineers, and with no regulation regarding supplier choice or frequency of ordering.
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