Target: MRO Spend

Purchasing recently ran an article that examined how Dow Chemical targets its MRO supply chain for savings. According to the piece, Dow's MRO global purchasing director views "his role as working with global purchasing's internal customers in manufacturing and engineering on solutions that balance low cost with reliability, delivery and, most important, safety." To make this game plan a reality, "representatives of the three groups—global purchasing, manufacturing and engineering—work together on category teams to develop specifications, analyze the market and develop sourcing strategies for capital and MRO buys."

As one main sourcing lever, Dow is deploying supplier rationalization programs, among other activities. They're also looking to suppliers for, to use a horribly clichéd term, "valued added" input as well. As an example here, one Dow supplier is also providing the company with "a process control system for its plant operations". Now that's what I call true MRO partnering. And for Dow, it must also be a great chance to reduce spend on another category -- operations consulting -- as well. As MRO suppliers offer more to their customers, perhaps the big loser in plant-level MRO Spend Management will ultimately be the Big 5 -- and other firms with plant-level operational practices.

Jason Busch

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