mobile | classic
Dataweek Electronics & Communications Technology Magazine





Follow us on:
Follow us on Facebook Share via Twitter Share via LinkedIn


Search...

Electronics Buyers' Guide

Electronics Manufacturing & Production Handbook 2019


 

What can sport teach us about MRO procurement?
28 August 2019, News

Being an avid triathlete and sportsperson, I often find parallels between sport and business. For example, triathletes don?t only train for the three main disciplines. They need to focus on the transitions as well, such as getting out of your wetsuit and onto your bike as quickly as possible.

Have you ever tried getting out of a tight-fitting wetsuit after a long swim? It’s something I am still working on, but it already shaves valuable time off the main events. It’s also a frugal way to gain an edge: instead of paying R1000 to get my bike 100 grams lighter, I could easily lose another kilo or two by adjusting my diet. That weight reduction can cut valuable seconds from my bike leg.

In business, this is called marginal gains. It has its roots in the Japanese word ‘kaizen’, meaning ‘continuous improvement’. It’s a philosophy that states change, no matter how big or small, is for the better. This was touted as the reason for the success of the British cycling team, according to their coach Dave Brailsford. He took the team, and British cycling as a whole, to some of the best results in the Olympics as well as the Tour de France.

In triathlon and any other high-performance sport, the difference between winning and not can be a couple of seconds. Those transitions between swimming, biking and running are the thin wedges that widen the opportunity for victory. In business, particularly manufacturing, marginal gains hold the same promise of staying ahead of the competition. This is most evident in MRO procurement.

MRO procurement creates the winning lead

Collectively, manufacturers make MROP purchases – Maintenance, Repair, Operations and Production. These can be split into two categories: direct and indirect goods.

Direct goods fall under Production. These form parts of a final product, such as the screen on a smartphone or the battery in a notebook. This definition can also include raw materials that go into the production process to create the final product. On average, direct goods account for 75% of the value of MROP purchases.

Indirect materials are part of MRO. These are consumed in the process of manufacturing products. It could be solvent to clean machinery, a replacement switch on the production line, even a new screwdriver or light bulb on the factory floor. Even though such bits and bobs only account for a quarter of the value of MROP purchases, they total on average 80% of the transaction volume.

This makes the MRO part of the equation ripe for marginal gains. But many companies don’t take advantage of that. Why? It’s because they don’t distinguish the two at a price and discount level.

Find marginal gains with the right partner

Direct commodities are easier to plan: you can anticipate production requirements and schedule demands. Like the main disciplines of a triathlon, you can apply a lot of forward-thinking. But when things are in a pinch – when you have to change to cycling shoes or when a display breaks – you need to act quickly. In that scenario, price is not the driving concern. Overcoming the barrier is often done at any cost (instead of losing a few kilograms, I buy a much more expensive bike). But did I really gain as much as I could have?

Indirect goods are unpredictable. In most cases, the product may not have been bought before or it might have been purchased years earlier. That makes negotiating price a challenge. Why would a supplier commit to discounts and low prices without the customer committing to a certain volume or predictability in demand (which they cannot)? Yet if this synergy isn’t struck, many marginal gains stay out of reach.

Brian Andrew
Brian Andrew

What is the solution? MRO procurement should be a multi-stakeholder approach; a combination of strategies each delivering a small cost saving. Those marginal gains add up and could deliver up to a 35% cost saving. This requires a partner that you can collaborate with to uncover such benefits.

The best supplier is not just one that can compete on price, but understands the importance of gains made through good delivery channels. For example, they can provide digital order platforms that your staff can easily access, through vetted channels, for immediate order satisfaction.

Not all suppliers can do this. They are still happy to treat customers’ emergencies as lucrative opportunities. But this doesn’t walk the road with their customers and certainly doesn’t help realise marginal gains in the MRO space. It frankly also doesn’t show respect for the discipline of modern manufacturing.

Just like triathlon transitions, if you don’t respect the details and aren’t supportive about making manufacturing flexible, as a supplier you aren’t contributing to your customers’ success. For MRO procurement, this should be an absolute requirement for their supplier partners.


Credit(s)
Supplied By: RS Components (SA)
Tel: +27 11 691 9300
Fax: +27 11 466 1577
Email: sales.za@rs-components.com
www: www.rsonline.co.za
  Share on Facebook Share via Twitter Share via LinkedIn    

Further reading:

  • Electronics news digest
    25 September 2019, News
    South Africa • The Institute of Electrical and Electronics Engineers (IEEE) has awarded South Africa’s IEEE section the prestigious 2019 MGA Outstanding Medium Section Award. The award is in recognition ...
  • Company profile: Harmony Electronics
    25 September 2019, News
    The globalisation of the electronics industry over the last few years has seen tremendous growth in the shipments of semiconductor products worldwide, with more focus on connectivity. Access to components ...
  • Hensoldt merges its SA subsidiaries
    25 September 2019, News
    The company has merged its two South African subsidiaries, GEW Technologies and Hensoldt Optronics South Africa, into the consolidated Hensoldt South Africa brand.
  • Q&A with iPulse Systems
    25 September 2019, iPulse Systems, News
    We asked Gary Chalmers, the CEO of local developer and manufacturer iPulse Systems, to tell us what new and exciting technologies the company has been working on lately.
  • Clearing the static - Topic 7: Moisture management
    25 September 2019, Altico Static Control Solutions, News
    Relative humidity (Rh) is a significant factor contributing to effective static control. When humidity in the working environment decreases, the human body and other insulators can easily charge with ...
  • Start your MCU learning journey today
    25 September 2019, News
    Harmony Electronics offers a course to learn the ANSI ‘C’ embedded control language in just 10 weeks. The training takes place on Saturday mornings over three hours at a cost of R350 per hour (R1050 total ...
  • From the editor's desk: Human brain still better than AI (in some cases)
    25 September 2019, Technews Publishing, News
    Technologies like artificial intelligence (AI), Internet of Things (IoT), biometrics and others are benefitting from an enormous amount of marketing hype these days, sometimes justifiably and sometimes not.
  • New African AI initiative at Wits University
    25 September 2019, News
    The Molecular Sciences Institute (MSI) at the University of the Witwatersrand (Wits) in Johannesburg, in partnership with the Cirrus Initiative, recently announced plans for a new artificial intelligence ...
  • Company profile: IC Logistix
    25 September 2019, IC Logistix, News
    IC Logistix was started in 2011 when an opportunity opened up to attain the distribution rights for Fujikura,a Japanese group with a popular range of equipment for the fibre-optic telecommunications market. ...
  • From the editor's desk: Making an aaS of ourselves
    28 August 2019, Technews Publishing, News
    First of all, I must extend the sincere apologies of Technews Publishing to Hi-Q Electronics. We have worked closely with Hi-Q for many years and yet still managed to get its address and contact details ...
  • Electronics news digest
    28 August 2019, News
    South Africa •Canadian technology company Sciencetech is now distributed in South Africa by Intercal. For over 33 years, Sciencetech’s products have been exported to countries around the world, within ...
  • Clearing the static: Electrostatic packaging - Topic 6
    28 August 2019, Altico Static Control Solutions, News
    The purpose of electrostatic discharge (ESD) packaging is to protect ESD-sensitive objects from ESD damage; especially when items are being transported outside of the designated ESD protected area. ESD ...

 
 
         
Contact:
Technews Publishing (Pty) Ltd
1st Floor, Stabilitas House
265 Kent Ave, Randburg, 2194
South Africa
Publications by Technews
Dataweek Electronics & Communications Technology
Electronics Buyers’ Guide (EBG)

Hi-Tech Security Solutions
Hi-Tech Security Business Directory

Motion Control in Southern Africa
Motion Control Buyers’ Guide (MCBG)

South African Instrumentation & Control
South African Instrumentation & Control Buyers’ Guide (IBG)
Other
Terms & conditions of use, including privacy policy
PAIA Manual





 

         
    Classic | Mobile

Copyright © Technews Publishing (Pty) Ltd. All rights reserved.