Viewpoint

Innovative MRO services sourcing at a global fine
chemicals company
A global fine chemicals
company had implemented
a number of MRO services
sourcing initiatives, but
most had either failed,
resulted in insignificant
savings or led to contracts
that were not actually
used in practice.
With sites distributed across Europe, it
was promptly observed that a site-bysite
approach could help improve the
management of the organization's
spend, estimated at €200 million to
€300 million. The initial phase of the
project immediately identified three
distinct clusters of plants that were all
located in the same country as the
company's headquarters.
Upon completion of the spend
mapping and scope definition, the
site-by-site diagnostic phase outlined
the "as is" and "to be" situations, as
well as established a baseline case
from which to build. The diagnostic
also confirmed a decision made in the
previous phase: The spend on MRO
services at one plant was simply too
small to merit its inclusion within a
cluster. At the conclusion of the
diagnostic phase, a number of
categories were selected as being
primary targets for the project, and
senior managers and stakeholders
gave the go-ahead on the selection.
The categories in question included
heating, ventilation and air conditioning
maintenance; scaffolding
and insulation; industrial cleaning;
mechanical and electrical services;
engineering; and rotating equipment
maintenance.
Implementation went smoothly, with
achieved benefits quickly outstripping
the targeted levels of improvement.
Typical savings were in the range of
15 percent to 20 percent—and indeed,
in some cases reached 30 percent or
even higher.
• Heating, ventilation and air
conditioning maintenance:
20 percent to 30 percent
• Scaffolding and insulation:
10 percent to 30 percent
• Industrial cleaning:
5 percent to 20 percent
Sourcing site by site | 10
• Mechanical and electrical services:
5 percent to 25 percent
• Engineering:
10 percent to 20 percent
• Rotating equipment maintenance:
25 percent to 35 percent
The real value for the company,
however, reached well beyond the
narrow confines of a strict savings
prospective. Moving forward, the
company found that the implementation
of new MRO service contracts
was more straightforward, simply
because many of the necessary
specifications and site requirements
already existed in a codified format.
What's more, as the relationship
between the individual sites and the
headquarters operation strengthened
over time, it proved easier to achieve
site compliance with centrally sourced
non-MRO service categories of spend.
This improvement can be attributed to
the sites' increasing realization of the
benefit of external intervention in
what had previously been "their"
decisions.
Not surprisingly, the company quickly
moved to extend the site-by-site
approach to its operations in other
countries. To date, comparable site by
site projects have begun in France,
Switzerland and the United States.
This success is a testament not only to
high performance , but also the
promise of more to come.