EuroSourceLine (UK) Limited began the buying of non-production items (NPI) - often referred to as maintenance, repair and operations (MRO) - in Germany back in 1994 and has regularly achieved cost reductions of 30% for its clients without affecting the quality of their products, processes or customer service.
By entering into a partnership with EuroSourceLine (UK) Limited, organisations have benefited from guaranteed cost savings, improved process controls, increased service levels together with numerous soft cost advantages.
Outsourcing non-production items is certainly not a new idea, it is certainly long implanted in the US. However, the problem is often lack of transparency. MRO outsourcing companies take over the buying departments and change all the suppliers. These companies operate ‘closed book’ systems, never disclosing the prices they pay suppliers.
Profits come from charging a margin on everything purchased, and this margin tends to creep up the longer the company stays in place.
Perhaps more alarmingly is that these companies have a tendency to own the suppliers from which they buy. By cutting a swathe through their clients’ suppliers, relationships are lost with organisations that often have deep and valuable knowledge.
On the other hand, ‘open book’ suppliers, such as EuroSourceLine (UK) Limited, disclose exactly how much the client is paying the supplier for every purchased item.
An open-book company has a very clear incentive to continue making savings for its clients. This gives it a more rounded, long-term approach to suppliers – appreciating the value of close relationships with them. Furthermore, the focus is on examining contracts and key performance indicators and measuring compliance, so suppliers are only shed if they are under-performing.
EuroSourceLine (UK) Limited, with the local knowledge and expertise from its subsidiaries based in the clients’ country, brings costs down whilst keeping, on average, 85% of its clients’ original suppliers.