Vendor base reduction is the strategic process of reducing the number of suppliers a company works with, aimed at improving efficiency and streamlining operations. By fostering stronger relationships with a select few vendors, businesses can better meet their objectives and optimize procurement processes.

Companies reduce their vendor base to reduce administrative costs and simplify supplier management. A more concentrated vendor base enhances operational efficiency, as managing fewer suppliers eliminates unnecessary complexities. The most effective way to achieve vendor base reduction is by centralizes the procurement of MRO spare parts from various manufacturers under one umbrella by partnering with an MRO Consolidator.

An MRO (Maintenance, Repair, and Operations) Consolidator is a strategic partner that allows clients to easily combine demands of MRO spare parts by various manufacturers.

Acting as the sole point of contact for clients, the MRO consolidator manages everything from sourcing and negotiating to ordering, delivery coordination, and invoicing. This simplifies communication, reduces administrative burdens, and minimizes the hidden costs typically associated with managing multiple suppliers.

International business increasingly work only with a few select companies: Their main OEM Suppliers / Line Integrators as well as a carefully selected MRO Consolidator, who combines deliveries from various sub-suppliers to a central warehouse, arranging regular consolidated shipments to the client sites, significant savings can be realized across the entire procurement process. Clients benefit from volume purchasing, better pricing, and more favorable contract terms.

Additionally, MRO consolidators offer expertise in customs regulations and export procedures, ensuring that all supplies are delivered efficiently, avoiding delays or disruptions. This approach enhances transparency and control over procurement activities, while also helping businesses track spending and identify cost-saving opportunities. The result is smoother operations, reduced total costs, and improved overall efficiency.

Any company can benefit from using an MRO Consolidator, but those with a wide variety of suppliers and small-volume purchases stand to gain the most. The more fragmented your supplier base, the greater the number of one-time-purchases the greater the opportunity to consolidate shipments, reducing hidden internal and external costs.

Additionally, companies with a regular purchasing volume of at least €500,000 in MRO spare per annum are prime candidates, as they will have a regular flow of purchase orders and deliveries and can realize significant savings through volume consolidation and reduced landed costs per item.

MRO consolidation is especially beneficial for businesses that find their internal teams overwhelmed by supplier management and sourcing tasks. By externalizing these responsibilities, companies can reduce administrative burdens and focus on their core operations.

Two factors make businesses especially well-suited for MRO consolidation:

1. High Import Ratio: Many of the spare parts used in production are imported, adding complexity to the procurement process.
2. Complex import processes, including documentation, certification, customs requirements, and complicated payment methods such as Letters of Credit.

Companies striving for sustainability also profit from working with MRO consolidators. These consolidators often collaborate with suppliers that prioritize eco-friendly practices, allowing businesses to reduce their carbon footprint without compromising on operational efficiency.