Rethinking MRO Procurement: Moving Beyond the Status Quo

Is It Time to Change the Way We Buy and Sell?

Just because a process has been in place for years doesn’t mean it should stay the same. Global trade has evolved at pace, yet many MRO procurement and supply chain methods use outdated value models to evidence cost improvement. While communication has advanced—from letters to telex, fax, email, and AI-driven systems—many businesses still rely on leverage-based procurement practices that fail to include data driven decision making.

In a world where data, automation, and AI drive decision-making, why are procurement and supplier relationships still dictated by outdated buyer-seller dynamics? The leverage quadrant approach—where buyers push for the lowest price and longest credit terms while suppliers aim for the highest possible sales—has become inefficient, unsustainable, and is ready for transformational change. 

The Power of Data in Modern Procurement

Today, business interactions happen at the click of a button, and clean data has become the key driver of change. AI can analyse vast amounts of MRO supply, demand and consumption information, across a category that was otherwise too complex to process, leading to better decision-making and improved operational efficiency. 

Integrating data insights with industry experience, means the industrial products we trade in are becoming commoditised, shifting from traditional manufacturer part numbers to common taxonomy AI-generated ‘single version of truth ‘SKU’s. While the "right part, right place, right time" principle remains critical, we must ask: Is item price still the most effective cost-saving strategy? By working in partnership, with 3PMRO partners like Entec, your business can unlock opportunities for broader cost, cash and carbon reduction benefits which deliver operational cost improvements that have long been overlooked. 

Shifting from Price-Driven to Value-Driven Procurement

In the current high inflationary landscape, the concept of a cost savings based on “the last price paid” is increasingly outdated. With pricing transparency available online, focusing purely on unit costs offers small percentage savings with diminishing returns year after year. 

The real savings come from leveraging technology, AI-driven procurement strategies, and data analysis. This shift allows businesses to move beyond cost-cutting tactics and unlock value through: 

• Optimised inventory management: Consuming overstock, removing SKU duplication, and avoiding parts obsolescence.
• Purchase prevention: Identifying unnecessary or redundant purchases
• Efficient supply chains: Shortening lead times and improving resource allocation

Strategic Partnerships: The Key to Smarter Procurement

Rather than operating in a buyer vs. supplier mindset, businesses should foster collaborative partnerships to maximise operational efficiency. By aligning goals, sharing insights, and utilising AI-driven category expertise, both buyers and suppliers can benefit from:

• Data-driven decision-making to streamline procurement
• Improved inventory control that releases tied-up capital
• Supply chain optimisation to enhance reliability and resilience

Are You Ready to Embrace a New Approach?

The future of MRO procurement isn’t just about driving down prices—it’s about smarter sourcing, AI-powered insights, and strategic partnerships that improve cost and create measurable, lasting value.  

Are you ready to rethink your procurement strategy? Explore how our 3PMRO Advantage solutions can transform your MRO strategy. Learn more here