Article Review – MRO sourcing goes global – Purchasing

Maintenance Repair and Operations

Identification of Spend Types in Purchasing

Spending is one way in which an organization can incur more cost than was initially intended or projected. In this regard, most companies focuses on identifying all hidden cost that may aggravate spending in the long run. An organization can improve in identifying different type of spending by classifying them and defining the kind of goods or services in which each one of the identified type of spending can be found. For instance, they can be classified as direct and indirect spending involves purchases of services and goods which are directly integrated into a manufactured product. Indirect spend can be used to define services and goods that are not directly integrated into the manufactured product. With this, the company can then develop analytic component of comprehending data and making classification, spend evaluation and identification. Another way to identify spending is by sending strategic sourcing skilled personnel into the market to do the evaluation as well as working closely with suppliers in assessing spending (Varghese, 2014).

Identifying Suppliers with Capabilities for Global Business

Global suppliers normally contain a high level of reliability and efficiency and thus, they can be of great importance when identified by an organization which embraces quality and reliability. One way an organization should consider employing to identify if a supplier is global or not is by evaluating the consolidating source and aggregating source of supply. Assessment of the suppliers manufacturing standards and their level of quality can also direct one on whether a supplier targets a local market or an international market which is more competitive and that is more attentive to the product quality.  Another way is by conducting an intensive risk assessment to establish if a supplier can manage to settle the needs of a company. An organization can also identify global suppliers by identifying their distributors. A company with various local distributors in different parts or with one distributor in all corners of the world qualifies to be a global distributor (Avery, 2009).

Strategy of Integrated Supply Approach with Distributors

The best way for a company to enhance supply of goods and services around the word is by use of distributors. This involves both international distributors and local distributors. To enhance distribution, a company should first focus on an international distributor with branches in different parts of the world. This way, a company can manage to work with one distributor who will be supplying their products or services in different parts of the world without much hassle for the company. If a company fails to get an international distributor, a company should consider using a well known local distributor. In both cases an integrated business model which allows a good working strategy between the distributor and the company should be enhanced (Avery, 2009).

Processes to Track Performance of Suppliers Including Cost of Ownership and Outsourcing

There are various techniques employed to meet the performance analysis of a supplier in a global supply chain. One of these techniques is by use of report card where performance is evaluated based on the suppliers’ ability to meet cost, technology used in the entire supply chain, delivery, availability of their products, product’s quality on delivery as well as responsiveness goals. Another strategy that can be employed is by use of informal process that contains daily feedback. An equivalent formal system can also be integrated as a part of supplier relationship management (SRM) programs. Other formal techniques are employed which works to ensure that there is continuous improvement of a product to ensure sustainable internal client satisfaction and competitive advantage. Other means that can be used to evaluate the supplier quality include processing, sorting, rework and scrap cost because of poor quality, processing costs and MRB inventory because of inspection failure, line shut down as a result of poor quality. Others include recall expenses, warranty expenses, employing equipment that is rework capacity constraint due to poor quality (Terfehr, 2009).




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