Hochfelder’s bold MRO prediction? by Jon Hansen

Posted on February 6, 2014


Okay I know that coming on the heels of my previous post in which shall we say, I questioned the veracity of a research paper by The Hackett Group on supplier consolidation, this next post may cause some to suggest an absence of bran in my diet.  Or maybe that the winter has been far too long and cold.  Granted I can become a bit edgy within the context of either of the above scenarios.

However, SDC Executive Editor Barry Hochfelder classifying his prediction in a just published article that MRO supply chains will become strategic in 2014 as being bold, is tantamount to predicting that the sun will rise in the east tomorrow morning or that the Seattle Seahawks will thump the Denver Broncos in the Super Bowl.  This is hardly news nor is it exactly going out on a limb.

Back in 2005 I published a white paper titled Acres of Diamonds: The Value of Effectively Managing Low-Dollar, High Transactional Volume Spend, in which I introduced the concept of commodity characteristics relating to Indirect Material spend and in particular MRO procurement.

In short, and as the paper outlines in great detail, the savings potential to which Hochfelder referred today, has been for a long time right under our proverbial noses.  The fact that a percentage of organizations may not have clued into the potential savings in both cost of goods reduction and compressed acquisition cycle times is more a reflection of how journalists and industry analysts failed to bring it to their attention.

In reality, any good service organization would have long ago availed themselves of this knowledge and employed the services of any number of suppliers whose solutions would enable them to better address their MRO procurement needs, while meeting the stringent SLA performance requirements of even the most demanding contracts.  My work with the Department of National Defence and the New York City Transit Authority immediately come to mind as two such examples.

How and why 2014 has now suddenly become the year of MRO enlightenment leads one to scratch their heads – at least this is the case in terms of my  perspective.  Maybe it is based upon the old saying that “if I haven’t seen it, it is new to me.”

Now if you will excuse me, I have to book my flight to Florida while eating my bran muffin.

SDC Exec MRO Post


Posted in: Commentary