SOP needs for capital MRO

by Dr. Robert A. Kemp

Several MRO Today readers have contacted me recently, looking for information on the creation and use of standard operating procedures or processes for acquiring MRO capital equipment. Some asked if I knew of a sample SOP, while others told me, “I need and want one, but time constraints prevent it from getting created and published.”

That’s unfortunate because it suggests uncertainty with the processes we currently use.

Therefore, this is the first of a series of three articles on creating and using standard procedures to acquire MRO capital equipment. This article will justify the process and the need. The second article will outline an SOP to acquire MRO capital equipment, and the final article will define training and development requirements along with process value.

To begin this process, we need to accept the definitions and need for SOPs. The Institute for Supply Management’s Glossary of Terms defines “standard” as “An agreement on the definite characteristics of quantity, design, performance, quality or service” for something. Likewise, ISM defines a “procedure” as “A step-by-step process or systematic way of handling regular events.” By combining the two brief definitions, we’ll define an SOP for this Coach series as:

“An agreed-upon, systematic, step-by-step process for leading and conducting all acquisition processes involving MRO capital equipment.”

Task 403 in the ISM C.P.M. Study Guide defines procedures as one of the “before-the-fact controls” that managers ought to use in managing the supply process. By “before-the-fact controls,” we mean procedures or activities that are measurable and able to be benchmarked. Obviously, to be used by the participants in the process, an SOP must be published, learned and readily available.

From these definitions, I will identify five steps or processes you must complete in order to create an SOP for acquiring MRO equipment. Complete the steps sequentially with significant coordination and collaboration between supply management and the other organizational operational processes.

Step 1: Study the process to identify, define and justify all the activities you must include. This may include defining activities with various levels based on cost or criticality of the item or process. Even in an SOP, we should account for differences and provide room for ingenuity or creativity.

Step 2: Identify leaders or managers with the authority to coordinate and approve an MRO acquisition process.

Step 3: Clearly delineate the responsibilities of users, supply managers and others.

Step 4: Map the SOP process to display activities, systems work flow, responsibilities, coordination between processes and decisions.

Step 5: Get managerial approval, education and training, and follow-up to ensure the SOP is published, available and used.

Years ago, I learned that we could structure organizational thought processes to provide leaders and managers liberty for creativity and freedom of action. The table below shows where an SOP fits in this hierarchy of thought processes.

We must create our SOP in such a way that we foster ingenuity and creativity even as we establish specific ways for doing things. Above all else, we do not want our people blindly performing rote actions. We want room for creativity, innovation and ingenuity to find a better way.

It seems clear that the key to survival is our competitive ability to create profit by controlling cost. As supply managers, we are part of a dynamic profession with increasing opportunities to contribute more to our organization’s success.

We must use strategic centralization of the processes for buying MRO capital equipment to contribute more to the organization. Creating and using an SOP to guide acquisition of such equipment is an important step in the right direction.

To prepare for my next article, please study your current processes in this area in order to identify the needed activities, coordination and approval processes.

Robert Kemp is a consultant, speaker and the former president of the Institute for Supply Management. He can be reached at kempr@mchsi.com.

This article appeared in the February/March 2003 issue of MRO Today magazine. Copyright 2003.

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