MRO Debate: Should You Outsource or Not?

As with many direct materials categories, maintenance, repair and operations (MRO) is not considered a significant spend category in many companies.

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As with many direct materials categories, maintenance, repair and operations (MRO) is not considered a significant spend category in many companies. However, some companies disregard the management of MRO until there is a breakdown in the production line, which leads to not only lost time but unexpected repair costs and revenue. Thus, there is no question of the importance MRO plays within an organization. 

Susan Avery from My Purchasing Center recently moderated a debate centering on the challenging topic of whether it is more beneficial for a company to internally manage MRO spend or to outsource it.

Vice president of Storeroom Solutions, George Krauter argues that companies should outsource the management of their MRO storerooms.  He believes that the process of managing MRO spend for companies is repetitive and obsolete.  Krauter states that an organization should focus on its core competencies by outsourcing MRO spend management to another party to eliminate its investment in repetitive inventory.

Director of category development at Corporate United, Ara Arslanian argues the opposite side of the equation and believes that a company will benefit by managing its MRO spend, even though MRO is not often a core competency.  If a company has well-established procurement goals, it should be prepared to optimize its spend without using third parties, Arslanian maintains.

Listen to the recording of this MRO debate as the two offer advice on how to best implement either strategy.  What side are you on?

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