All firms rely on external contractors for certain activities or services. An organization may hire a lawn care service to maintain the grounds around a facility or a heating and cooling specialist to handle repairs that the maintenance staff cannot perform. Other common services include machine repair, snow removal, data entry, consultants, and the management of cafeteria services. Like MRO items, the purchase of services occurs throughout an organization. Therefore, there has been a tendency to pay limited attention to them and to manage the service purchases at the facility or department level. A study by AT&T several years ago revealed that the company was spending over a billion dollars a year on consultants. As with any purchase category, careful and specialized attention can result in achieving the best service at the lowest total cost. More and more, companies are negotiating longer-term contracts with service providers just as they would with other high-dollar purchase categories.

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