The adoption of digital platforms by traditional brick-and-mortar companies can lead to savings of between 30% and 60% of their procurement budget if it is properly controlled.
The net effect can be a saving on the bottom line of 3% to 5% through the effective digital management of key business processes, says maintenance, repair and operations (MRO) solutions group Bramhope CEO Isak Marais.
Bramhope’s own digital transformation has reduced its total cost of ownership by up to 60%, he says.
Bramhope’s platform journey started with an initiative to reduce the total cost of ownership and risk for customers – with the key value proposition being understanding and managing customer consumption to realise value.
Often falling under the radar, as it makes up a small portion of noncore business, MRO – or consumables – expenditure in any organisation represents between 8% and 15% of the total procurement bill.
However, its effective management can lead to significant monetary savings and productivity efficiencies.
“Technology ensures that pricing and supplier sourcing and management are optimised across multiple purchasing points, while streamlined vendor management inventory and supplier relationship management impact positively on the bottom line,” he explains.
‘Platform thinking’ includes the consideration of customer needs and behaviour and the potential of various technologies, connectivity and real-time feedback loops, as well as partner coordination and collaboration.
“Inaccurate data is a persistent and costly problem in MRO inventory management,” Marais notes, adding that predictive analytics is critical in determining optimal inventory practices to minimise cost and waste, while boosting productivity and responsiveness.Reducing Costs
In addition to eliminating inefficiencies and reducing costs, the adoption of the platform approach can enable companies to reduce their carbon footprint and mitigate other risks, improve service and quality and streamline processes.
Increased spend visibility, data analytics, and supplier optimisation are crucial to optimising the digital platform when dealing with millions of items and transactions.
“Bramhope provides a [software-as-a-service] cloud-based platform where we measure and predict the consumption of these items,” Marias comments.
While traditionally such MRO services have been out of the price reach of many companies, Bramhope offers a model where the licence can be leased at a fraction of the full purchase price, with or without incorporating a full MRO product and solution supply service from Bramhope.
The cloud-based system, running on an Oracle database, is the culmination of the group’s investment, since 2006, in data collection and input into the system for electronic cataloguing and consumption behaviour trends, and enables the group to use sophisticated techniques such as predictive analytics and machine learning.