Effective MRO Procurement through E-Commerce

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By: Anithamaragatham G --

02 July, 2012

Effective MRO Procurement through E-Commerce
WHITEPAPER

E-Commerce in Procurement In general, E-Commerce sourcing is expected to provide a cost savings of around 10-20% of the total procurement costs. However, how much impact would E-Commerce have on MRO sourcing and cost savings? This could probably be answered after analyzing the opportunities and challenges of simulating the same model in MRO sourcing. How is MRO Sourcing different? Maintenance, Repair and Operations (MRO) sourcing differs from a companyï¾Ãƒâ€šÃ‚Æ’??s core business procurement needs?? as the number of stock keeping units required, number of categories, buying frequency, supplier landscape etc., are different from that of the core business. Effective MRO Procurement through E-Commerce Traditional MRO procurement process poses many challenges and constraints, in other words, provides opportunities for optimization through E-Commerce. E-Commerce is not only confined to buying and selling but also involves other process that support buying and selling. Automated Data Collection System Automated identification technologies are used for easy identification of the materials and storing, retrieving and tracking of the data. Technologies such as bar codes, RFID (Radio frequency identification) and voice identification are used for automated identification of MRO materials. The data so collected and retrieved are used for inventory demand forecasting and inventory management. This helps in ad-hoc supply and reducing excessive inventory.