Strategic Sourcing initiative significantly reduced structural costs in Contingent Workforce category
MRO Spend Analysis
An Indian subsidiary of a leading global pharmaceutical company uncovered significant opportunity to optimize MRO spend through a detailed Spend Diagnostics exercise.
Overview
The company with its global manufacturing operations has a large MRO (Maintenance, Repair & Overhaul) spend, spread over multiple plant locations. The company was looking for an integrated solution to optimize this spend without hampering the ability of operations & maintenance team to run the plants at high yield.Challenges
- Highly fragmented spend with long-tail supply base as well as large number of SKUs to manage.
- Poor spend data quality – inadequate specification, duplication, etc. For example, we found over 70 different item codes for hand-gloves with large chunks of duplications.
- Decentralized MRO spend management process.
- Unpredictable demand & unplanned purchases.
Solutions
High level analytics showed that earlier spend reduction efforts were ad hoc (tactical & with brute force) rather than using structured spend optimization process.
Using our automated spend data classification system, the data was quickly cleansed and classified for further analytics and insights.
Various work streams included –
- Data Cleansing & Classification Improved data quality to identify key areas of opportunity.
- Deep Data Analysis Identified supply base fragmentation at sub-category level, unit-price variances across plants, specs variations across SKUs etc.
- Supplier Data Quality
Identified and improved supplier duplications and multiple instances. - Supply Market Intelligence
Identified key distributors and integrators combinations to effectively manage MRO spend & supply risks. - Opportunity Assessment
Identified specific cost saving opportunities at sub-category levels.
Results
Our structured and rigorous MRO spend analytics process helped enable greater spend visibility, data driven decision making, opportunity to reduce costs structurally and manage optimal inventory levels.
Key outcome of this exercise included –
- Clear roadmap to optimize MRO spend sustainably across all plant locations.
- Opportunity to reduce overall costs by 10 – 15% while maintaining effective supply continuity.
- Opportunity to plug pricing variations across buying centers.
Optimize your MRO supply chain – Reduce spend while increasing plant uptime
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