$500 billion is spent annually on MRO (maintenance, repair and operations) in the U.S, making MRO a target category for procurement to manage. Approximately 30% of MRO spend is on non-inventory industrial purchases; the other 70% is committed to MRO inventory.
Inventory is costly to retain, often plagued with duplicate supplies and challenging to track. MRO represents a huge cost reduction opportunity for procurement and a significant opportunity to identify and eliminate waste. As facilities become ‘smarter’, procurement can make more informed buying decisions that affect cost savings, inventory reduction and numerous other benefits that we have outlined.
A vending solution provides an automated store directly into your facility delivering immediate access and complete accountability. In fact, our MRO partner Fastenal has provided over 2,500 machines located at 500+ global facilities to Corporate United members.
By implementing employee-vended supplies, vending executes a level of control and consistency to the facility. Vending minimizes the need for employees to hunt for the necessary products; less searching means more time to perform their work. Employees can self-serve, 24/7 and immediately return to the floor. When downtime is equal to a loss of significant revenue, this increased productivity will boost profits, saving time and money.
Each vending transaction is tracked and controlled, adding a layer of accountability. This motivates the workforce to vend responsibly and work more efficiently; which will result in reduced consumption. Even further, the facility will have as much control as they want over purchases. They own the ability to set limits on who has access to what and how much.
With employees being engaged and responsible for supplies they use, vending will strip out wasted consumption that operations have been spending unnecessary revenue on month after month. On average vending will reduce consumption by 20-30%.
CUSTOMIZED INVENTORY REPORTING
A key element of vending is advanced, custom visibility. When each supply is tracked at the employee level, the facility can view consumption on a broader scale. Inventory reporting tracks usage by individual, group, jobs, cost centers and up to six levels of information you want to know regarding your spend. These automated reports allow your facility to better set budgets regarding MRO spend. This 100% visibility of consumable spend will help identify trends of waste and recognize areas where the facility could be operating more efficiently. For example, why purchase 50 safety gloves per month (600 per year) when you now have the knowledge that you only need 10 (120 per year)?
REDUCED ADMIN EXPENSE
Improve output by making sure core products are immediately available to the workers through automation of the ordering process. With automated ordering, when vending stock runs low, an automated replenishment alert is sent. This eliminates P.Os, stock outs, costly rush orders, and downtime. You are able to reduce procurement costs with fewer P.Os and time spent managing high turning, lower dollar products.
Procurement can empower the facility by making their purchasing easy, effective and streamlined through vending solutions. The facility will gain in-depth visibility so they can base their buying choices off actual data, while reducing costs and improving productivity. Procurement will be able to help the facility maintain the parts you are already purchasing while receiving a solution that helps reduce consumption, time and spending- significantly reducing your total cost of ownership. Vending your MRO through a GPO will provide even more in-depth advantages to the operation.
TIME TO SAVE
Vending is a fundamental component of the customized onsite program that members can implement through Corporate United’s partnership with Fastenal. Additionally, CU’s lifecycle management will provide annual market checks, core list management and further savings through the rebate program.
Learn more about how your operation can implement vending solutions to streamline your MRO while reducing consumption (cost) and increasing productivity (profit).