Increasing numbers of organisations are focusing their Management on core activity by outsourcing non-core functions to external service providers. At the same time businesses are looking for improved methods to enhance their profitability, adding value to and taking cost out of the process stream.

A time-consuming and complicated part of any organisation's operations is the provision of non-core products, otherwise known as maintenance, repair and operating goods (MRO).

Irrespective of the order value, on average, an administrative cost for working hours, office supplies, equipment and general expenditure of between £35 to £50 per MRO purchase burdens most companies. For every £1 million spent on MRO there is upwards of 25,000 requisitions, 20,000 purchase orders and 22,000 invoices and credits to process.

Therefore, many companies are seeking better efficiencies in the procurement channel for MRO. Competitive advantage in the marketplace comes from more than just having the best products and services around. It comes from an ability to drive costs out of the processes that support the business and from the ability to create value for customers by addressing the total cost.

The size and management of the supply base impacts on all three components of total cost. Acquisition costs are affected by the procedures and resources required to interact with the supply base. Possession costs are significantly impacted by the amount of inventory required on-hand due to supplier performance. Product costs also change based on the amount of leverage and value-added services provided by suppliers.

In recent years more companies are re-evaluating their MRO inventory investment and asking themselves if their inventory is being managed effectively and if there are opportunities to improve this area.

One solution that is being increasingly adopted is outsourcing MRO through Integrated Supply.

The transition of service provision from in-house to outsourced inevitably involves considerable care and change management, and as such needs to be professionally planned and implemented.