Maintenance and Procurement – Adversaries or Partners?

Maintenance and Procurement – Adversaries or Partners?

It can seem that way sometimes. Given our economic environment that causes high cost pressures, the way a company defines its objectives can unintentionally set up apparent conflicts.
 
For example, a Procurement function might be rewarded for cost savings. This is understandable because it is easy to see, and track results to the bottom line.
 
Additional Procurement categories of value creation that are negotiated with suppliers could include technical support, inventory reduction, volume rebates, and similar mechanisms.
 
But, when this simple approach that targets “paying less for parts” continues for many years in a row, it can begin to have negative impacts in other areas of the organization.
 
Parts may fail prematurely resulting in high equipment delay and high maintenance labor costs. Availability of parts from the supplier may be low, resulting in a plant having to stock more inventory.
 
Even the quality of the parts can impact mechanical stress and increase energy costs.
 
What’s the answer? Measuring and making decisions on total cost.
 
Not always easy to start because it requires input from multiple functions (Procurement, Maintenance, Operations, Stores, Finance).
 
However, it is critical to transforming from a reactive manufacturing environment to a proactive environment – where both the performance of the assets and operating costs are best-in-class. 

Defining objectives in a way that ensures functional alignment and everyone working together is critical to long term success.

Fun Fact:

The most common repair on today's automobile is - to replace the oxygen sensor.

About The Author:
Tom Klim has over 40 years of work experience as a practitioner at a Fortune 150 company. Tom’s career roles and responsibilities included: Finance, Logistics, Plant Stores, MRO Buyer, SAP Project Leader, Production Planner, Global Central Stores Leader and Global Reliability Leader. Tom holds two patents on spare parts inventory management processes. Tom is married, has children and resides in Wisconsin.
 

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