Controling MRO/Indirect costs

Do you think you have adequate control of your MRO spend and inventory management?

Answer these twelve questions to find out-

 

 

 

  • Can you identify your annual MRO/Indirect category spend? (not estimate)    Yes or No
  • Do you identify your monthly Indirect inventory value accurately?                      Yes or No
  • Is your Indirect inventory value better than 95% accurate?                                     Yes or No
  • Do you cycle count your Indirect inventory by class?                                                 Yes or No
  • Do you have up to date data on all sku’s in your system?                                         Yes or No
  • Have you eliminated Excess and Obsolete Materials from inventory?                 Yes or No
  • Are you tracking MRO Warranty opportunities?                                                          Yes or No
  • Are you tracking and managing MRO Repair opportunities?                                   Yes or No
  • Do you purchase the same MRO products from multiple suppliers?                   Yes or No
  • Are you reporting spend/disbursement by product/dept/badge?                        Yes or No
  • Do you perform P2P analysis and/or Product performance testing?                   Yes or No
  • Do you allow spending without a PO/receipt/invoice process?                             Yes or No

 

If you answer No to any one of these questions, you could be somewhere between wasting profit dollars and spending out of control.

Indirect category spend is the largest non-finished goods expense, and MRO is one of the largest category spends within Indirect. If unchecked, it can quickly become a drain on profits.

Allowing an analysis by professionals who view this as their core competency (not an additional service) can provide insight and quick solutions to rogue spend, out of control inventory, and identify exactly where and why profit dollars are going out the back door.

They can also provide solutions to adding efficiencies in inventory management and disbursement as well as a reporting suite that provides “to the penny” detail for any timeframe, product, department, item, and/or badge swipe.

You CAN eliminate excess inventory, spend waste, shrink or theft, lost items, and stop profit erosion from Indirect. If done properly, Indirect can provide an ROI, and return those profit dollars back to the bottom line.

Contact Spence at ValuePoint Material Solutions to discuss how an analysis can help you capture lost profit dollars from improperly managed MRO/Indirect materials.

 

Spence Webb is Business Development Manager for ValuePoint Material Solutions. Contact him on his cell at 989 295 0422 or email at swebb@valuepointsolutions.com