INF 336 Project Procurement Management
After reviewing the article by Susan Avery, “MRO Sourcing Goes Global”, one has come to several conclusions concerning the effects of outsourcing and how it can complement and/or handicap any organization. Maintenance, repair, and operations (MRO) are relevant in many organizational structures, not just in America but worldwide. Organizations are outsourcing goods and services to cut costs and increase their revenue. The author of this article discusses companies using MRO to target global markets and organizations that utilize MRO to target customers being served on a regional, national or global level.
A few months ago, I worked for a utility locate company, which within my region of locating (Texas) was responsible for locating Texas Gas, Entergy Electrical, Time Warner Cable, AT&T telephone and fiber optic telecommunications for 811-call-before-you-dig services. I was part of a team of 18 personnel who received tickets in their respective areas. This job was a self-managed job, where you worked on your own locating and marking these utilities so when construction companies would conduct surveys or excavation, they were aware of the location of the utilities within their worksites. We had assigned pickup trucks that were considered our “offices” with all our required equipment to conduct our daily duties and conduct our utility locates. Our regional office is in Houston, which houses our main supply warehouse, our training offices, spare fleet vehicles, regional manager and regional HR personnel. Our headquarters office is in Nebraska, which has our CEO and HR who handles budgets, payroll, etc. for the entirety of the company. Overall, this company locates in 49 states, and from a global standpoint they also locate in Canada as well.
In the article Avery discusses aggregating the spend and consolidating the sources of supply (Avery, 2009), and when one discusses of the term “spend” there are three types of spend that come to mind. The article “What is Spend?” written by Jonathan White, spend can be described as the money being used by the organization to maintain facilities, money being deposited into accounts for employees, such as retirement and savings contributions, and money required for daily operation as well as the cost of labor (White, 2013). The operational budget spend would come from what the organization would have to spend to operate the business. From another standpoint, our company has an IT section which is subcontracted to assist with the software and databases that are used to access the ticket information, and the company had to pay IT specialists to ensure that the database remain secure and operational around the clock. These items would all fall under the operational budget spend. Many companies outsource, such as Proctor and Gamble, who purchases items through distributors (Avery, 2009).
Overall, one believes Avery’s article is somewhat confusing, but found myself able to understand select portions of what she was trying to convey in terms of maintenance, repair, and operations. There is a cost of spending that includes operating a company and sound decision making as to whether outsourcing will be a logical and ideal choice for the organization. When looking at the business model, one must take into account all expenditures from operational cost to influenceable spending. The ultimate goal for operating a business is to ensure that the business is thriving and profitable.
Avery, S. (2009). MRO sourcing goes global. Purchasing, 138(2), 48-52. Retrieved from
Johnson, P. F., Leenders, M. R., & Flynn, A. E. (2015). Purchasing and supply management (15th ed.). Retrieved from https://redshelf.com/
White, J. (2013). What is “spend”?–Defining spend in the procurement process. American City
& County Exclusive Insight, 1. Retrieved from http://search.ebscohost.com.proxy-library.ashford.edu/login.aspx?direct=true&db=edb&AN=101813507&site=eds-live&scope=site