The Impact of Web‐Based Procurement on the Management of Operating Resources Supply

Abstract

SUMMARYThe focus of this article is on the impact of Web‐based order processing systems for procurement strategy in the management of maintenance, repair, and operating (MRO) supply. The management of MRO supplies has been little discussed in the literature, and in many organizations is undertaken in a devolved, decentralized, and uncoordinated fashion. Consequently, MRO procurement is often a poorly managed and non‐value‐added activity, yet MRO purchases may account for many millions of dollars of expenditure for organizations across most, if not all, industries. To explore the impact of Web‐based procurement systems on MRO purchasing, a Delphi study was conducted providing access and analysis of commercially sensitive data.1In this article, it is contended that greater information processing capability achieved through the use of electronic commerce, specifically Web‐based procurement, will enable significant cost improvements and strategic leverage to be obtained through a more strategic approach to management of the typically low‐value, high‐variety goods and services that constitute the main category of MRO items. E‐procurement of MRO items may be a so‐called “killer application” on the basis of potential efficiency gains.Further, an important consequence of the reengineering of the MRO procurement process will be to raise the professional profile of the purchasing function through enhanced internal customer service and significant total cost improvements.