Don't confuse the tools with the buying strategy. (maintenance and repair operations purchasing)(Editorial)

Susan Avery's cover story on Emerson Electric's new MRO buying operation (page 38) speaks volumes about the importance of understanding and getting control of an operation before trying to change it.

In an era when much foolishness is being spoken in behalf of electronic catalogs, integrated supply, electronic requisitioning, and purchasing on the Internet, it's refreshing to follow the reasoning of someone like Emerson's Norbert Loebs. In setting. up his approach to driving cost efficiency into MRO buying, Loebs spent little up-front time on the tools of transaction. In fact, before even considering the technology of transaction. he first methodically thought through the strategies necessary to meet his firm's MRO materials needs.

As a result, he can now show his company's management a well-reasoned supply strategy that really does take the big costs out of MRO buying. Moreover. he has developed a strategy that varies in detail of application over a large multi-plant operation, while remaining consistent on a corporate level.

Purchasing professionals reading this story should be especially attentive to Loebs' awareness of what really drives the process. Despite a great deal of publicity about electronic shopping and electronic catalogs, the real drivers in most manufacturing procurement operations are supplier agreements and long-standing supplier partnerships and alliances.

Despite many goofy comparisons of industrial procurement to consumer shopping and paeans to the wonderful freedoms offered by electronic catalog ordering systems, buying professionals need to stand firm on what procurement is about. Purchasing is about choosing supplier partners, not filling shopping lists.

Once good agreements (covering price, quantity, quality, service levels) are hammered out with good suppliers, then and only then, should work be started on implementing them. In most companies the transaction processing that implements agreements needs to be clean and simple and product catalogs and electronic requisitioning have a place in implementing agreements. But firms that try to solve their MRO cost problems with transaction processing systems don't understand their costs.

Those who talk of buyers searching out suppliers on electronic search screens just don't understand how purchasing gets done.