Strategic procurement has a firm place in many companies. For steel, plastic granulate or electronic components there are category strategies, market analyses and supplier portfolios. For spare parts there is often just one thing: habit. You order from the manufacturer or from the distributor maintenance has always known.<\/p>\n
Yet the MRO area holds more strategic potential than many people think. The way there leads past seven misconceptions that persist in many procurement departments.<\/p>\n
Strategic procurement defines how<\/strong> a company sources a category over the long term: with which suppliers, on which terms, with what risk and towards which goal. Operational purchasing then turns this strategy into concrete purchase orders.<\/p>\n A proven tool is the Kraljic portfolio matrix. It sorts categories by two criteria: impact on profit and supply risk. This results in four quadrants.<\/p>\n What stands out: many spare parts end up in the bottleneck quadrant. Their value is low, their failure risk high. Yet this is exactly the quadrant strategic procurement often neglects, because the sums look small.<\/p>\n Spare parts are ordered when something breaks. So, the logic goes, they are the business of maintenance and operational purchasing. There is nothing strategic to do.<\/p>\n That is not true. If you never look at your spare parts strategically, you end up with a long supplier list, unclear terms and no answer to the question of what happens when a critical part is missing. An MRO strategy does not have to be complicated. But it should exist.<\/p>\n In direct procurement, price is a key metric. For spare parts it is one of many. Often more important are:<\/p>\n A strategy that only looks at price optimises the smallest cost item and ignores the largest.<\/p>\n With spare parts, strategic procurement does not buy an item. It buys availability.<\/p><\/blockquote>\n Many buyers assume that a spare part can only be obtained from the machine manufacturer. For genuine custom parts that may be true. But a large share of the components in a machine come from suppliers: motors, bearings, valves, sensors, control assemblies. These parts are often also available directly on the market, sometimes faster, sometimes cheaper.<\/p>\n A strategy that takes this into account distinguishes between machine-specific parts and bought-in components and chooses the right sourcing channel for each.<\/p>\n Supplier consolidation is a classic goal of strategic procurement. For direct materials this often means fewer manufacturers and higher volumes per manufacturer. For spare parts this does not work. The manufacturers are dictated by the equipment. You cannot decide to fit bearings from only one manufacturer in future if the machines are designed differently.<\/p>\n What you can consolidate is the interface. A multi-brand sourcing partner brings many manufacturers together behind one point of contact. The variety of parts remains, the variety of suppliers on your side shrinks.<\/p>\n Of course a breakdown cannot be predicted. But a large share of MRO demand can very well be planned:<\/p>\n If you separate this plannable share from the mass, you can treat it like direct materials: with framework agreements, call-offs and negotiations. For the unplanned remainder you then need fast, reliable channels.<\/p>\n Global sourcing is often equated with cutting costs through low-wage countries. With spare parts it is about something else: availability. A part that is sold out in Europe may be sitting with a distributor in America. A component that European sales offers with a long lead time may be available sooner in Asia. And plants in Latin America often need European parts that nobody stocks locally.<\/p>\n Global sourcing in MRO therefore means knowing where which part is available on which terms. And having the ability to source it safely from there.<\/p>\n Strategic procurement assesses supplier risks: financial strength, dependency, country risk. With spare parts, however, much of the risk lies elsewhere:<\/p>\n These risks are in-house. A strategic procurement function that only looks at suppliers overlooks them.<\/p>\n A spare parts strategy does not need to be a thick document. Five building blocks are enough to start with:<\/p>\n The best strategy fails if procurement and maintenance work against each other. Procurement sees costs, maintenance sees risks. Both views are right. A joint MRO strategy brings both to the same table and creates an understanding that prevents many conflicts in day-to-day work. A practical start is a joint quarterly meeting to discuss the most important breakdowns, bottlenecks and supplier experiences.<\/p>\n If you want to build an MRO strategy, you do not have to start with a major project. A realistic start in three months: in the first month, analyse the previous year\u2019s purchase orders and segment the most important spare parts groups together with maintenance. In the second month, define sourcing channels for each segment and talk to your key suppliers. In the third month, set KPIs and start with a pilot area. After that you will not have a perfect strategy, but a solid foundation you can expand step by step.<\/p>\n A new head of procurement wants to show results quickly. He tackles spare parts because he sees many suppliers and little control there. His order: from now on, three quotes per purchase order and approval by procurement. After a few weeks maintenance complains. Rush orders take longer, special parts are ordered from the wrong distributor, a shutdown is extended by a day.<\/p>\n The intention was right, the tool was wrong. A process that suits leverage items slows down bottleneck items. Had he segmented first, he would have set separate rules for each quadrant and won maintenance over as an ally.<\/p>\n KTB Europe has been working as a sourcing partner for industrial customers since 1976. In an MRO strategy we typically take on the role of the multi-brand partner: for spare parts from many manufacturers, for hard-to-find and discontinued parts, for plants in different countries. Our aim is to reduce costs through optimised sourcing strategies without putting availability at risk.<\/p>\n Find out more on our pages on cost optimisation<\/a> and procurement<\/a>.<\/p>\n Strategic procurement does not end with direct materials. Especially with spare parts, where small values carry big risks, a strategic view pays off. If you know the seven misconceptions, you can avoid them and turn habit into a strategy.<\/p>\n\n\n
\n \nQuadrant<\/th>\n Profit impact<\/th>\n Supply risk<\/th>\n Typical MRO examples<\/th>\n<\/tr>\n<\/thead>\n \n Non-critical items<\/td>\n low<\/td>\n low<\/td>\n Standard parts, consumables<\/td>\n<\/tr>\n \n Leverage items<\/td>\n high<\/td>\n low<\/td>\n Standard bearings, lubricants in large quantities<\/td>\n<\/tr>\n \n Bottleneck items<\/td>\n low<\/td>\n high<\/td>\n Special spare parts, discontinued components<\/td>\n<\/tr>\n \n Strategic items<\/td>\n high<\/td>\n high<\/td>\n Large components such as gearboxes, rollers, drives<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Misconception 1: \u201cSpare parts are an operational matter.\u201d<\/h2>\n
Misconception 2: \u201cThe best price is the goal.\u201d<\/h2>\n
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Misconception 3: \u201cThe manufacturer is the only source.\u201d<\/h2>\n
Misconception 4: \u201cConsolidating means cutting manufacturers.\u201d<\/h2>\n
Misconception 5: \u201cMRO demand cannot be planned.\u201d<\/h2>\n
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Misconception 6: \u201cGlobal sourcing means buying cheap in Asia.\u201d<\/h2>\n
Misconception 7: \u201cThe risk lies with the supplier.\u201d<\/h2>\n
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What an MRO strategy can look like<\/h2>\n
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Procurement and maintenance: one team<\/h2>\n
The first 90 days<\/h2>\n
Typical scenario: the new head of procurement<\/h2>\n
Where KTB fits in<\/h2>\n
Conclusion<\/h2>\n