Aviation Manufacturer Sees MRO Savings Soar: Earns £3.5 million Savings in Two-Year Period

A successful integrated supply program has many moving parts. Purchasing. Storeroom operations. Maintenance. Production. Finance. Then there are the hundreds of suppliers involved. All have a role to play, and all must work together to be successful. That is where trust comes in. Trust in the decisions, and trust in the value of the relationship.

For one UK aviation manufacturer, the ability to work together in building and evolving an MRO integrated supply program has contributed to one of the most successful programs RS Integrated Supply has ever had. But it was not always that way. It took time to build the trust needed to be successful.

When the relationship started, the client was experiencing what most companies do around MRO materials:

• Excessive and inaccurate inventory
• Managing supplies across multiple unconnected sites
• Poor data quality and reporting
• Unable to make strategic procurement decisions

They also had an incumbent service provider that was failing. It was when that company exited the account that RS Integrated Supply took control, and the turnaround began. That was 12 years ago.

This is a large client, 12 sites spending tens of millions of pounds each year on MRO materials. Nine of those sites are managed by a combined staff of about 25-30 personnel, including envoys and site managers.

Excessive inventory is what caused the initial headaches around the program and the process. Like many manufacturers, the maintenance team’s approach was to buy enough materials to ensure future part availability when needed.

Data was also a challenge. There was no understanding of what the data was telling them or even how to use that data properly. Maintenance was fixing an asset because it needed fixing. They had no idea what it was costing them to fix the machine, or what it would cost to replace it. And while a spot fix does address the immediate problem, it does not drive consistent savings and efficiency. In fact, it hampers maintenance effectiveness because so much time is spent repeatedly repairing the same equipment. By using data in linking assets to specific spare parts and sharing procurement intelligence around those parts, the client can make informed decisions that improve uptime while spending less.

The two companies built the partnership by working side by side chipping away at the overall challenges, assessing the program, and identifying new savings and cost-avoidance opportunities. In 2023, the program experienced the most success of any previous year. That success, is due, in part, to the rollout of a new strategy built on:

• Technology integration with digital procurement solution
• Data-driven inventory optimization and reporting
• Expanded use of Value Engineering Services, including SnapPart™
• Global procurement approach
• Dedicated strategic management

The technology integration involved syncing client data with purchasing data, specifically the last price paid and parts identifiers. With accurate data the purchasing process becomes more efficient in terms of availability, price comparisons, substitutions, and more. It is especially relevant with a savings goal of 5% year over year, as was the case here.

That digitalization includes implementation of RS Integrated Supply’s technology suite. The platform, which includes an electronic marketplace for custom parts catalogs, provides access to real-time information on deliveries, inventory levels, purchase orders, history, work orders, and other data.

That platform also drives inventory optimization. Accurate data drives inventory optimization by making sure the proper parts are in place when needed, while eliminating what is not. Called RS SYNC™, the platform offers data visibility, improved reporting, and closed loop purchasing processes, including purchase order approvals. The objective is to bring all parts into Maximo, the client’s system of record, with all parts registered against assets, booked out of the storeroom, and recorded in the two systems, Maximo, and RS SYNC™.

Meanwhile, RS Integrated Supply shared its value engineering solutions to generate additional savings and efficiency and introduced condition-based monitoring to the client. It was a tactic the client’s own engineering team was exploring but had few resources in place to bring it to reality.

Also introduced was the use of RS Integrated Supply’s own SnapPart™, a mobile app technology that allows the end user to take pictures of specific MRO parts and automatically populate key data points, manufacturer details, part numbers, classification, and descriptions. The technology speeds parts identification with greater accuracy and security, smoothing the way for more efficient procurement.

The use of Value Engineering Solutions and SnapPart™ enabled the client to earn more than £900k in cost avoidance.

The 12-year relationship speaks to the success of the program. That success is punctuated by the amount of savings the program has generated over the last two years, where RS Integrated Supply, working with more than 900 suppliers, processed more than 78,000 price quotes.

With improved and accurate data available, the process saved the client more than £2.2 million in purchases while another £967,000 in cost avoidance was also saved.

Net saved in the most recent two-year period is more than £7.5 million (est. $9.45 million USD).