Monro employee infront of computer Monro employee infront of computer

The one change Monro made to save time and gain insight into procurement

It impacted the entire business and allowed them to better serve their customers across the U.S.

In today's fast-paced retail landscape, having a great product is essential, of course. But smart business owners know at least two other things are crucial for success as well: efficient inventory management and streamlined distribution processes. With smart business buying plans in place, these processes can enable companies of all sizes to minimize costs, improve cash flow, enhance customer satisfaction, make better decisions, and even gain a competitive edge.


That's why when Monro, Inc. — an automotive service and tire dealer with more than 1,250 locations nationwide — needed to reconfigure their distribution services model, Luis Pereira, Senior Manager of Indirect Procurement, began to research options.


As Pereira puts it, "indirect items are anything that the business needs that doesn't show up on a customer's invoice that are important for operations." For example, these items include office equipment, paper products, and cleaning products. While these items do not directly contribute to the company's core products or services, they're necessary for the smooth functioning of the workplace environment and the opportunity to better serve customers.


Monro previously operated with a traditional distribution system, which sometimes resulted in long lead times and limited visibility into procurement. Locations often had to resort to local purchases for those indirect items, and that led to untracked spending and inventory discrepancies.


"We would order bulk supplies and distribute them in the same manner that we would with our tires or parts, but there was a lot of tail spend from the stores when they couldn't get what they needed because they would only receive deliveries every two to four weeks," Pereira explains. "When stores would purchase supplies, I could see that they made an expense, but I had no idea of what the category or item was."


From pilot program to realizing company-wide benefits.

With the impending divestment of their distribution arm, Monro needed a swift transition to a more efficient procurement model.


So, Pereira looked to Amazon Business to manage that tail spend, gain visibility, and better equip their employees to help customers. The implementation of Amazon Business involved a structured approach: Monro began by collecting data and understanding their procurement patterns. Through collaborative efforts with Amazon Business Customer Advisors, Monro optimized their purchasing strategies and established guidelines for preferred products and suppliers.


"We initially set up this pilot program with a few stores in various areas for roughly a year, and it was very successful," Pereira says.


At the start of the pilot program, Pereira intended for Amazon Business to act as a secondary option for when their distribution services couldn't deliver items on time. But Pereira soon realized that there may be more potential for Amazon Business at play. "After an in-depth cost analysis, we validated that Amazon Business was the best option for us, and what started as a secondary option to manage tail spend soon became our primary source for indirect procurement," he says.


Saving time and money by buying smarter.

Amazon's flexibility and scalability stood out for Pereira. "Not only was it easy for us to implement when we had our own distribution services, but it was also very adaptable for when we changed our model. And that was significant for our business," he says. Pereira also found controls and tools like Amazon Business' "preferred product lists" to integrate seamlessly with the existing tools and data captures that he had in place.


In addition, Monro benefited from saving time in terms of training and onboarding for their employees. "We used our own internal training module, Monro University, which explained how to use Amazon Business. This ensured that everyone took this step to complete the program and activate their account. And since our employees were already familiar with how to use Amazon for their personal use, the interface for Amazon Business was no different. But with the approval flows in place, the onboarding experience has been incredibly easy to manage" he explains.


Looking ahead, Monro plans to continue leveraging Amazon Business for purchasing and explore opportunities for expansion into other departments within the organization. The ease of use, centralized management, and potential for cost savings make Amazon Business an asset for Monro as the business continues to grow.


"The support and engagement from Amazon [Business] has been excellent, and they've been able to take our business to the next level," Pereira says. "With Amazon [Business], the deliveries have been incredible, our locations are able to get what they need in just a day or two, and ultimately, this has had a core impact on our business and allowed us to better serve our customers."


Originally published on Entrepreneur.


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