Profile of the MRO Procurement Professional

By Susan Avery

March 12, 2015 at 12:55 PM

MRO procurement is a vital and valued cog in the machinery of an organization.  

That’s according to results of a new survey of My Purchasing Center readers that examines the role and responsibilities of MRO procurement. A year ago, a similar survey that profiled the procurement professional found that 52% of respondents are responsible for sourcing MRO goods and services. 

MRO stands for Maintenance, Repair, Operations. 

The 2015 poll shows that MRO is a challenging spend category for procurement to manage, and the MRO buyer is accomplished and sometimes well compensated. 

And while many dislike the word buyer when used to describe a procurement professional, it is the title many survey respondents use to identify themselves. Nearly 28% say “buyer” most closely resembles their current title. 

Twenty-six percent say the title purchasing or procurement agent best describes their responsibilities, and 22% are managers. Other procurement titles responsible for buying MRO are: Director, CPO and vice president. Still others are called coordinator. 

As expected, MRO buyers report to procurement directors and vice presidents, with some answering to the CPO and even the CEO. Others report through operations, finance and supply chain organizations at their companies. 

Sixty-one percent of MRO buyers are based at corporate headquarters. The others work at plant locations. A small number of respondents say they work for state or local government. Some telecommute. 

MRO buyers are loyal to the procurement profession. Fifty-five percent have been in the role for more than 10 years. In fact, one respondent indicates that he’s preparing for retirement after working in procurement for 46 years (and wants to share all his knowledge with a young colleague who’s taking on the responsibility). Another 21% of survey respondents have been responsible for acquiring MRO goods and services for at least five years. 

For some MRO buyers, that longevity equates with greater compensation. Twenty-five percent of respondents earn more than $80,000 annually. Another 48% have salaries that top $40,000 a year. 

Salary is based on procurement performance at managing cost, say 94% of MRO buyers responding to the My Purchasing Center survey. Quality, delivery and service are other metrics management uses to measure MRO procurement performance. 

How They Buy

Thirty percent of MRO buyers are responsible for bugets of more than $5 million annually. Another 18% manage spending of more than $1 million.

MRO Buyer Annual Spend Responsibility 

 MRO budget.jpg

 

 

 

 

 

 

 

 

 

MRO buyers are responsible for sourcing spare parts (76%), industrial supplies (76%), health and safety products (73%), electrical products (71%), and hand and power tools (64%). Respondents were asked to indicate all the categories they’re charged with purchasing. 

In addition, MRO buyers also source fasteners (64%), chemicals (63%), cleaning products (63%), HVAC (57%) and material handling equipment (57%).  Still others source lubricants, office supplies and IT, and some services. 

MRO Buyers Source these Product Categories

categories managed by MRO buyers.jpg

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 To view, please click on images to enlarge

Sourcing all these categories for internal customers and key stakeholders throughout an organization presents MRO buyers with more than their share of challenges. Often these are related to the sheer number of parts numbers as well as the suppliers they have to manage to deliver to those customers. They also tell My Purchasing Center that sometimes they could use more support from top management. Other big challenges in the words of survey respondents are:  

  • Not being able to see the inventory in our ERP system. None of our expense parts are cost on the BOM (bill of materials), so they are not inventoried. Plus how to measure performance associated with MRO.”
  • “Price increases, extended leadtimes, sub-standard quality of products, poor after-sales responses from suppliers.”
  • “Convincing management to provide adequate buyer resources to properly handle the MRO sourcing and procurement process.”
  • “Getting buy-in from users of product or service of strategy and selection of suppliers.”
  • “Continually driving down costs while still maintaining service.”
  • “Managing capital and services.” 
  • “Disposing of inventory of obsolete items ordered prior to standardization.”   

Creativity Counts

Despite the roadblocks, MRO buyers continue to plow ahead and excel at their jobs, most often responding to issues they encounter with original and creative solutions. The survey asks MRO buyers to describe some of their accomplishments in 2014. Here’s a quick sampling:

  • “We’re able realize a Total Cost of Ownership net savings of 8% by leveraging our spend and standardizing on one distributor and a few key manufacturers,” says a respondent who requested anonymity. 
  • Carolyn Holley at Tie Down Engineering in Atlanta, “devised a way to track MRO spending using the current system and not solely depending on the general ledger category but also machine and department.”
  • At Fisher Engineering in Rockland, Maine, Horace Grover “negotiated multi-year agreements with our uniform service, mechanical services company and was lead on procurement of a laser, punch press and roll forming equipment.”
  • “Standardized MRO items across AMPs (Asset Managed Properties), Took advantage of Joint Purchasing opportunities. Dramatically reduced leadtime to an average 24-48 hours while at the same time cut maintenance material expenses by 10%,” says a respondent who requested anonymity. 
  • One respondent in Michigan “achieved more than $200,000 cost savings. A large amount of that was with a new small package contract and a tax credit for alternative fuel usage for fork lifts offered by the US government.”

Looking ahead, 64% of MRO buyer respondents are optimistic about economic and business prospects in the coming months. Another 25% see no change in prospects in 2015. 

Also see the My Purchasing Center articles My Purchasing Center Profiles the Procurement Professional and Procurement Changes in the Past 10 Years.



Tags: purchasing MRO indirect Supply chain management Careers Procurement sourcing buying
Category: News Article

Susan Avery

user_avatar

Susan Avery is Editor-in-Chief at My Purchasing Center. She writes articles, blogs and white papers and manages and creates other content for the online procurement and supply management publication. She produces and moderates roundtable discussions, podcasts, webcasts and video interviews. Susan has 30 years experience covering procurement and supply management for Purchasing magazine and Purchasing.com. 


Please add a comment

Posted by fanmiao1974yahoocom on
Hello Susan,

Is it possible to have 2015 MRO trend like below.
Thanks for your generous sharing.

Best regards.

•Category Overview - High-level overview of the market, past and projected growth rates and other relevant macro information.
•Key Market Trends - An explanation of current trends in the industry, factors influencing those trends and potential implications.
•Cost Structure - An overview of the industry cost structure and trends affecting change.
•Competitive Landscape - Identifies and profiles key industry players.
•Category Tools - Key tools to leverage when sourcing specific categories.
•Capability Maturity Model (CMM) - A spectrum of sourcing and procurement capability maturities from lagging to leading.
•Best Practices - Proven techniques for success in this category across transacting, sourcing, supplier management, etc.
•Channel Design - Optimal execution options across each major activity from source to pay.
•Additional Resources - External resources for additional category information.

Michael
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