MRO-010 Ver 1.2 (Dec 23)
Savings Levers & Mitigation
There are various options in the MRO tool-kit to manage facility-related threats as a by-product of inflation and other market influences. Those that have found to be the most impactful are listed below. Additionally, the MRO CBRE Procurement Solution team is collaborating with in-country teams to actively support cost avoidance / savings opportunities. You will find additional guidance in the Suppliers / Pricing section of the MRO Playbook.
Direct Negotiation With Current Supplier Partners
Competitive Sourcing Event
Alternative Products / Services
Demand Reduction
Best-Shoring
Redesign Products / Alternative Specifications
Leverage Innovation
Consolidation / Unbundling
Should-cost Analysis
Pass-through
Smart Contracting
- Directly negotiate with the incumbent to determine options to offset cost increases i.e., specification modification, "thinning" of SKU's in support of volume based leveraging pricing, etc
- Competitively bid sources of supply to uncover lowest market price; Include traditional and non-traditional suppliers
- Explore alternative brands, service approaches, materials, sizes, volumes, specifications, etc
- Reduce demand for product or services (e.g., cut back cleaning services for minimally used facilities or spaces, defer maintenance, control out-of-scope work)
- Explore alternate sources of supply on global basis / take advantage of pricing arbitrage
- Re-design products or specifications to reduce cost to make, install, & maintain. Engage architectural communities to identify alternative products
- Leverage innovation (inclusive of IoT, intelligent restroom designs, deploy the most current dispenser systems inclusive of hi-capacity units, etc.) to reduce labour, waste, material cost that result in gains in efficiency and productivity
- Standardise and bundle / unbundle products / services to leverage buying power
- Calculate product / service "should-cost" models to counter unnecessary or over-inflated supplier price increases and work with other category leads to align to other savings opportunities i.e., headcount reduction, etc.
- Pass-through inflation cost increases to customers (where applicable)
- Design supplier contracts to limit, delay, manage or eliminate inflation adjustments
- Ensure Liquated Damage provisions are well-defined within agreements before signature, mitigating risk of project delivery / schedule – shifting risk back to the supplier
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