MRO procurement (maintenance, repair, and operations) in the chemical industry is not just about purchasing and managing industrial equipment at the lowest cost. It is also about ensuring compliance and sustainability, continuously improving and optimizing, creating value for stakeholders, and fostering innovation.
The chemical industry lacks severely behind the best-performing sectors, such as automotive, when it comes to optimizing the MRO procurement processes (McKinsey). This is worrying since the chemical industry relies heavily on MRO procurement, so much so that the purchasing costs in the industry are equivalent to 50–70% of sales revenues. Therefore, improving procurement processes can significantly impact the chemical companies’ bottomlines — as per a McKinsey analysis, sectors following procurement best practices have a 17% higher EBITDA.
One of the ways to achieve procurement excellence is by adopting modern tech solutions, such as procurement management systems. Such systems can transform the function from reactive and tactical to proactive and strategic. How? Continue reading to find out.
Tech-Driven Procurement in Chemical Industry
Procurement management systems transform the capabilities and culture of the function itself. It achieves this by giving you access to real-time data, tools to analyze it, a dashboard to present information in consumable chunks, and reports to present to the leadership teams:
Enabling you to improve the quality and efficiency of your communication and coordination between internal and external stakeholders.
- These platforms boast features such as real-time data sharing, end-to-end visibility for processes, in-context messaging, and uses AI to identify threats and do damage control.
- This can enhance the quality and promptness of communication, improve transparency, and foster value creation and innovation.
Helping you leverage big data and advanced analytics to tap into market trends, forecast demand, measure supplier performance, and track price fluctuations.
- It can help you monitor the availability and prices of commodities, negotiate from the point of power, and manage risks proactively.
- Spend analytics can also help you analyze spending patterns across suppliers, locations, and business units, giving you room to identify opportunities for cost reduction and consolidation.
Streamlining and automating transactional and tactical procurement activities such as ordering, invoicing, payments, and requisitioning.
- It can reduce manual work, save costs, save time, and increase accuracy.
- It can also help you track inventory levels, track shipments, and optimize logistics.
A robust digital procurement solution empowers chemical companies to make data-driven decisions, transform operations, and boost financial performance. One of the ways to do that is using Moglix’s vendor consolidation capabilities to simplify your procurement across multiple suppliers.
This case study shows how Moglix did this for a leading chemical manufacturer and helped them reduce cost, optimize inventory, and made the supply chain ecosystem more efficient and transparent. Learn more about how Moglix can help you, click here.