MRO (maintenance, repair, and operations) spending can generate thousands of documents and significant overhead costs. Leveraging existing Ariba investments and ThomasNet supplier catalogs and content can help capture more MRO spending and improve a company's bottom line. Partnering with ThomasNet allows companies to streamline MRO supplier relationships, identify new suppliers, and get supplier catalogs ready for procurement through Ariba to reduce costs.
I’m suggesting using this to reconnect to the abstract and why these folks likely chose to attend the breakout session.This will be designed to fly in with visual emphasize of the #s
Speak to the continuum of managing Indirect Spend and moving into the subset of Indirect Spend, Industrial MRO with the ultimately possibility/goal to manage direct spend as well.
Steve, you wanted to add other categories
Each of these points can fly in and you can briefly speak to them.For a typical manufacturer – MRO is 16% of COGSOnly 50% of MRO parts are found in storerooms, when they are neededThe rest are spot buys – typically outside “standard” processesDrives “squirreling” behavior – undocumented inventory and high cost5% - 25% of MRO spend leakage is due to poor supply chain visibility, controls and complianceThe high cost of down time (Accenture)Broken gasket in a chemical plant may cost $500K per day and create major safety hazardsEach day a mining truck is down may cost the company as much as $1M in lost revenueA down transformer reduces revenue and hurts customer satisfactionOften not considered strategicLarge spend, incomplete accounting roll-upsToo many suppliers, too little product informationMinimal Form-Fit-Function rationalizationFrequently handled at the plant level – not centralizedPoor contract complianceNo purchasing leverageComplex specifications & poor documentationFragmented supply chain – drives maverick spendToo many choicesEnd-user, unapproved favoritesVery high touch, for both Buyers & SuppliersManual processesMultiple conversations
This slide can build from top to bottomWe can ask the attendees to raise their hands with some of these…”how many of you can relate to this point of pain”
This slide could build from top to bottomWe can ask the attendees to raise their hands with some of these…”how many of you can relate to this point of pain”
Opening:So, let’s take a look at a “day-in-the life” to understand the profound difference between using a catalog and not, as a means of driving industrial MRO spend. Imagine you have a machine on the floor that is critical to your manufacturing process. One morning, the operator hears a strange noise coming from the machine and calls the floor engineer. After troubleshooting the machine the engineer determines it’s a cooling fan, located within the Flux Capacitor control cabinet – it needs to be replaced. The machine is old, so after wrestling with it for a while, the fan finally comes out but there are no part numbers to be found. The engineer wanders over to the parts crib, but can’t find anything that looks remotely similar. So – what does he do?Build 1: He goes to the Google Machine to see what he can find. He types in “DC Fan” to see what comes up. The first thing he notices a link that has the words “Bikini” and “Disney has a Disney Fan Club”. This peaks his interest, so surfs over to their web site to do some exploring. After a few minutes (or more) he remembers why he was online and goes back to the original Google web site and sees that a number of links appeared towards the top that look like they might be what he’s looking for. So, for no reason other than its at the top of the list, he clicks the top link.Build 2: A set of various fan types come up, some of which look similar to the one in his hand and some of which don’t. The top photo looks pretty close, so he clicks on that …Build 3: and it shows what seems to be the fan. There isn’t much information – a general summary of that it is, but there are no detailed operational specifications (i.e. input power requirements, fan speed, air flow, mechanical dimensions, mounting information, etc.). It does, however, show a big list of companies eager to sell me one of these fine fans. So – what to do? He has two choices – the first is to click on one of the supplier links and see if he can work with that supplier to figure out what he needs . Or maybe he’ll click on the supplier and use his company credit card to order whatever shows up fist, then he’ll use his hammer to make sure it fits in the machine.Build 4: Or, he will open up the company’s non-catalog procurement application and put in what he knows about the part, hit send and hope the procurement agent that is unfortunate enough to get the Req will know where to buy the part from.
Make sure we address procurement content as we discuss this “day in the life…with MRO spend under management” since it segues into that term and value in the next slides
And digging a little deeper, Procurement Content ….Drives Contract ComplianceSourced Suppliers, with contracted items and pricingIncreases wallet –share for suppliers, driving better discounts, improved customer service and better all-around relationsDelivers a “Perfect PO”Accurate meta data ensures accurate order placement – reduces manual interventionDrives “touchless” invoices – fewer supplier support callsStreamlines the invoice approval process, enabling better discount captureConsumer-like buying experienceIntuitive and easy to use – ensures accurate selection process
You should speak to the value of ThomasNet as the expert in Industrial MRO and how we can not only streamline current suppliers but support buyers’ supply chain engagement and MRO spend under management initiatives with our business intelligence
The emphasis for this slide is the “customization” of our solution for each buying organization and their particular set of suppliers. ThomasNet does all of the work and there is not cost to the buying organization….other than some resource engagement at the onset
Just to illustrate how the engagement will work with ThomasNet and Ariba CMO teams and emphasize that we’ll do it all and make it happen
As we discussed, I will be creating a “lead gen” card that we can put on the seats in the breakout and then I can walk around and collect them etc. I will also be using our flair pins and possibly another hand-out too.