Which is better – a GPO or a purchasing cooperative, or is there a third alternative?

Posted on August 28, 2023

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This post by Virginia Taylor had me at MRO.

In the late 90s and early 2000s, the government’s Scientific Research & Experimental Development program (SR&ED) funded my development of an algorithm-based online platform to procure MRO parts to support the DND’s national IT infrastructure. The NYCTA used the same solution to procure MRO parts across the five boroughs.

In a production environment, the public sector organization realized a year-over-year 23% cost of goods savings for seven consecutive years while simultaneously reducing the number of buyers required to manage the contract to 3 from an original 23. Delivery performance and product quality also improved dramatically.

The algorithms were “extended” to include SSL access through time zone polling, resulting in a significant drop in centralized warehouse inventory and associated costs using a Parts Compression Function.

While the DND and NYCTA shared some suppliers, each client’s procurement platform operated as an independent Metaprise.

Which one is best for MRO procurement GP or Co-Op model?

Posted in: Commentary