With certain supplies harder and more expensive to secure, how can manufacturers ensure operations continue on a level playing field? The answer lies in a company’s approach to indirect supply management.
Challenges Faced by MRO and Office Supplies Due to COVID-19
When you think about the MRO supply chain, it almost seems simple. Replacement parts and consumable supplies come up the chain and into your storage. When a piece needs to be replaced, it comes out of currently held stock. To ensure stock doesn’t run low, warehouse managers keep a recurring order open to ensure replacement and consumable items are available.
However, the COVID-19 pandemic changed everything. Many of the pieces we take for granted, like personal protective equipment, were immediately redirected to first responders who needed it more. Additionally, normal supply chains were disrupted because of shutdowns in China and companies utilizing a work-from-home model to prevent the spread of novel Coronavirus.
Protective equipment and replacement parts are only two of the potential shortages MRO operations faced by buyers of indirect supplies. The slowdown also extends to regular office supplies. As more people are forced to work from home, the demand for copier paper is dropping. As a result, two of the major paper producers in the United States have temporarily shut down at least three plants which produced office paper for printers and copy machines.
Although it appears that the supply chain may be in a crisis, your business doesn’t have to navigate these changes alone. By tapping into a group purchasing environment, sourcing MRO and office supplies doesn’t have to be an excruciating process.
Why Indirect Supply Management is a Critical Part of Your Business
There’s a lot of power in group purchasing. Groups who regularly order recurring supplies are able to get volume discounts and oftentimes improved availability for even the most in-demand supplies.
For example: A group of our indirect sourcing customers reached out to us to help secure face masks for their regular operations in breathing hazard environments, such as painting and other high-particle- producing environments. Our team quickly got to work on the request, and was able to find a source of high-quality face masks. After ensuring their quality control was to the clients’ standards, we secured orders at a competitive price with a quick delivery window, ensuring our clients’ businesses could continue to operate uninterrupted.
Indirect supply management is a tool available to your team to find the essential items you need at reasonable prices. By working with a partner in this space, your company can consolidate their overall supply space and form strategic partnerships on items they will regularly need. What makes our partnerships unique is that we can put it all together in a group purchasing model, which allows us to drive savings for our partners.
When you combine indirect supply management with other disciplines, like LEAN management, your company can actualize savings in multiple ways. By focusing on reducing waste and improving efficiency, the supplies your company relies on can be utilized smarter. While this drives cost savings at the core, it also gives your team a mindset of constant improvement, which benefits your entire organization through new thinking and problem solving skills.
Get Support from the Leaders in Indirect Supply Management
No matter how you are sourcing your products today, it can be improved through consolidation and smart partnerships. As you set your plans towards the next phase of your business, now is the time to look at your accounts payable data and get a spend analysis to map out how you can get even greater efficiency around your indirect materials operation.
Transportation Insight is your partner in driving success now and into the future. Let’s start a conversation today about how we can drive savings for your company together.