MRO Magazine

MRO spend programs turn to technology for cost savings, says survey

Boston, MA The category of maintenance, repair and operating (MRO) supplies, an incredibly diverse set of items f...


Boston, MA The category of maintenance, repair and operating (MRO) supplies, an incredibly diverse set of items for many companies, accounts of 54% of all enterprise purchasing transactions, according to a just-released study by AberdeenGroup.

The study, the Maintenance, Repair and Operating Supplies Benchmark Report: Strategies for Improved MRO Spend Management, found that automating activities across the entire source-to-pay process is a practice Best in Class organizations have employed to achieve 19% MRO cost savings.

The benchmark report has uncovered the fact that most enterprises will be implementing technology solutions to address MRO program initiatives. Technology to address MRO programs is not the exclusive domain of procurement, as enterprise asset management systems are in use by 45% Best in Class organizations vs. average performers.

Other findings include:

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– On average, MRO is 16% of enterprises’ spend, while accounting for 54% of purchasing transactions.

– Best in Class companies, by using online ordering and electronic payments, have realized MRO administration cost savings of 18%.

– Lack of MRO spend visibility is the top challenge impeding organizations from developing effective programs, as cited by 59% of the respondents.

“Best in Class enterprises leverage automation across the entire source-to-pay process — spend analysis, sourcing, procurement, contract management, invoice and payment, and compliance — at a rate that is 51% higher than average performers,” according to Andrew Bartolini, research director of Aberdeen Group.

“In addition to MRO cost savings and administration savings, these enterprises have reduced MRO inventory by 14% over the past three years, and have experienced a 17% reduction of their MRO supply base over the last three years.”

FREE COPY FOR LIMITED TIME

Until Nov. 30, 2006, readers can download a complimentary copy of the report at: this link or by visiting www.aberdeen.com. Enter your e-mail address where indicated to register.

Aberdeen provides fact-based research and insights focused on the global, technology-driven value chain. Aberdeen’s benchmarking, market and solution assessments, sales acceleration programs, and conferences support Global 5000 value chain and technology executives — and the solution providers who serve them. For more information, visit www.aberdeen.com or call 617-723-7890.