Is It A ‘Switch’ or A ‘Control’? Different MRO Product Terminology Can Cost Food and Bev Manufacturers

Keeping plants operating without downtime or mechanical failures is a prime concern for food and beverage manufacturers. Unexpected downtime or equipment malfunction can easily compromise food safety, possibly necessitate a recall, and create an expensive mess.

To avoid these costly scenarios, food companies need to partner with a competent vendor to handle plant maintenance repair operations (MRO).

Ideally, a food company should contract with a single MRO solution provider, instead of dealing with a hodgepodge of several vendors. When each plant hires their own vendor to handle MRO supply needs, it costs the company significantly more overall.

The headaches of a decentralized MRO function are numerous:

Without an agreement with one overarching MRO supplier, product requirements and pricing levels will vary by each plant and the company will miss the opportunity to leverage organization-wide spend. When working with a single MRO solution provider, the customer enjoys uniform pricing for parts and maintenance for all its plants. This benefit simplifies corporate accounting and lowers procurement costs.

With the disparate pricing that comes with using a patchwork collection of MRO vendors also comes a complete lack of product standardization.

Is it a switch or is it a control? Two different vendors can name the same parts differently, filling up the customer’s system with duplicate parts under different names. Across an enterprise-level organization with several plants, this duplication can be significant and costly. It also makes it difficult for the organization to determine what their MRO budget is being spent on and if they are overpaying for anything.

Just as bad as giving the same part different names is using different parts for the same purpose. It is easy to end up with a motley assortment of components being used for the same purpose when multiple vendors are servicing a company’s plants. The absence of standardization in either area can prove costly for food companies.

With a single MRO vendor, companies can avoid these pitfalls. No longer does having 50 plants mean that each component has 50 different names in the customers’ system.

Other administrative costs are those associated with negotiating many contracts instead of one, and then managing all of those different vendor relationships. If there is a problem, the corporate level lacks a single point of contact and would have to reach out to each local vendor. Whereas with a single vendor who services all the company’s plants, there is only one contract, one vendor relationship and a single contact for everything the company needs.

The answer to the problems of inconsistent MRO service is to contract with a supplier that has local distributors near each plant and enters into a company-wide agreement with customers to service all plants. With distributors that are actually local to the plants they service, customers get the parts when they need them. Also, customers a single point of contact ensuring accountability at both the corporate and plant levels, uniform pricing and product consistency for each plant.

With a single MRO contract, a customer company can get access to sophisticated e-commerce solutions that enable ordering through a single purchasing portal that serves as the front end for receivables and the back end for payables. These systems also provide company-wide and plant-level report and metrics, giving the organization complete picture of costs and operations.

 

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