October 3, 2023

Transforming MRO Sourcing for Complex Organizations

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How data is the solution but also poses challenges for companies

To remain competitive in your industry, it is crucial to stay relevant with the changes in the consumer demand and to stay ahead of those constantly changing global supply chains. Having reliable and accessible data is thus the underlying foundation that is going to set you up for success.

But if the solution is 'more available data', the challenge is handling this data efficiently and correctly. When we talk about data and data intelligence, we go beyond having the right data at the right time. It also means about having data at 'a critical point in time' that has the most impact on your organization.

This simply couldn't have occurred five years ago, with the tools and technologies that we had available. We know now that we've been collecting a large amount of data, but we had no feasible way to understand it, and we couldn't understand it with any high level of confidence.

The key data challenges in MRO Sourcing for multinational corporations

When we look at MRO spending in a multinational, big companies, we're talking of thousands of different SKUs in different specifications, different quantities, across different sites. It is thus only natural that a category manager would shy away from these complexities and avoid running sourcing events more regularly or more frequently or update prices of their catalogs more frequently. Some of the most common problems, category or sourcing managers are facing in multinational corporations include:

Multilingual data

One of the main challenges multinational companies are facing is multilingual data. When there are several production sites in different countries, you will have documents and articles described in different languages. When you want to analyze the data in your systems, these documents are treated as single items and not a version of the same item in different languages.

Ever-growing data structures

When companies are growing with mergers or acquisitions, so is the data and the various sources they are stored in. The same data or data that contradicts each other is available but separated physically due to the storage architecture.

Outdated information

In MRO spending, it can be difficult to gauge whether what you needed last year is what you need in the year to come and which volumes you can commit to. Understanding if a previous SKU still fits the purpose and can actually be used or maybe needs to be exchanged or has to be sourced with a smaller or bigger volume allincreases the complexity for negotiations – both for the category managers and for their suppliers.

Existing enterprise technology not fit for purpose

Big companies will have technology in place that serve their value but they're not going to be nimble enough to address the abovementioned fast-changing environment and complexities.

Recent developments that help decrease complexity in MRO spending

Centralized Data Foundation in Procurement: The significance of data in procurement has only increased. Having the right data at the right time is crucial, but it's also about having data at critical moments to make a significant impact on the organization. Many companies have embraced technical developments that enable data lakes and storing and combining information centrally.

Rise of AI Technologies: AI technologies have become more accessible in the last five years, enabling companies to harness the power of data effectively. Integrating these technologies into procurement applications allows companies to stay competitive and adapt to changing demands. Thanks to the recent developments, AI-powered tools can quickly transform raw data into structured information, help identify outliers, and assist in making better-informed sourcing decisions.

Proliferation of Niche Solutions: The industry has seen a surge in technology companies offering niche solutions to address specific business challenges. Traditional enterprise applications struggle to keep up with the evolving landscape, leading to the emergence of hybrid or centralized solutions that connect these products and services.

How can Archlet specifically help to address typical challenges in MRO spending

  1. Automated Outlier Detection: The tool offers automated outlier detection capabilities, helping users identify suppliers who may have misunderstood specifications or are not competitive, saving time and effort in the procurement process.
  2. Cost Impact Analysis: The tools guides users to focus on units or SKUs with the most significant cost impact, allowing for a more informed decision-making process by highlighting areas where cost savings can be achieved.
  3. Data Filtering and Customization: Users can filter and customize data based on their specific requirements, allowing them to focus on the information most relevant to their procurement needs. This feature helps reduce complexity and streamlines the RFP process.
  4. Scenario Planning: The software tools enable users to create different procurement scenarios, considering various factors such as sustainability, supplier limits, lead times, and more. This allows for strategic decision-making and optimization of procurement strategies.
  5. Integration and Global Reach: Both Archlet and Creactives can be integrated into existing procurement systems, and they have a global presence through partnerships and participation in industry events, making them accessible to users worldwide.

These takeaways emphasize the automation, data-driven decision-making, and customization capabilities offered by Archlet and Creactives in the context of procurement and sourcing.

Rewatch the webinar here.

About Creactives SpA:

Creactives SpA started as a cost reduction consulting company. Our clients were mainly in manufacturing (including discrete manufacturing), utilities, oil and gas/mining, and logistics. In order to provide an effective cost cutting strategy, we realized that enabling granular categorization in a plurilingual environment is an enabling factor. Another key aspect is the management of parts and services related to maintenance, repair, and operations (MRO) spend which often make up for the vast majority of so-called ‘tail spend.’ The tail is the hardest part of a company’s spend to keep track of, mostly because is extremely difficult to understand and monitor and the ROI is significantly lower than non-tail spend. Having to deal with so many projects, we have developed deep expertise in the MRO category that can be exploited on behalf of many companies. As of today, Creactives has the world’s largest knowledge base of industrial components.

Our tools have inherited the expertise and know-how that we have developed over years of work in the field of cost management. We now make this unique solution – initially built to meet our own solution needs – available to all of procurement. We now make this unique solution – initially built to meet our own solution needs – available to all of procurement.

About Archlet:

Archlet is an intuitive sourcing analytics platform empowering enterprise Procurement teams to make better decisions faster. Strategic sourcing managers harness Archlet’s automated bid analytics and scenario optimization to erase inefficiencies from their sourcing process and surface immediate insights that maximize negotiation power.

With the Archlet platform, sourcing managers accelerate sourcing cycle times by +30% through automated bid collection and analytics to increase your spend under management. Customers using Archlet have achieved 2-3x more savings during data-backed negotiations with quick insights and scenario comparisons. As an added benefit, Archlet enables procurement teams to centralize their sourcing data and thus bring transparency to decisions and to ensure compliance.


Pioneering thoughts on data-driven sourcing