How important is the standardization of processes to the MRO supply chain? For one life sciences company, an aggressive growth-through-acquisition strategy exposed and even created a lack of standardized processes across the supply chain.
The acquisitions meant that plants now working together, or at least coordinating production, were dealing with different processes and systems – ERP and maintenance alike – leading to increased production costs.
Initial engagement with an integrated supply provider involved two U.S. sites with limited processes in place to manage the MRO supply chain. No reliable means for tracking purchasing history or inventory beyond Excel spreadsheets existed.
At one site, encompassing three buildings, there were 16 different storerooms, all with unrestricted access. A site assessment revealed that maintenance technicians were spending 25% of their time on tasks related to sourcing, purchasing, stocking, and managing inventory. That wasted time translated to tens of thousands of dollars lost in actual maintenance. That same site also reported no:
- Dedicated storeroom resources
- Min/max values
- Standard storeroom metrics
- Critical spares identified
- Equipment asset lists or bills of materials
Additionally, poor data contributed to 15% of materials being out of stock when needed. That resulted in additional resources spent using P-cards and expedited freight to sustain production.
Adding to the challenge was the lack of confidence in newly installed CMMS software. More than 8,000 SKUs existed in the system with an estimated 4,000 more items scattered throughout the plant.
Finally, Accounts Payable using different software meant that all requisitions and purchase orders had to be manually created in the second system.
And that was one site. A comparable situation was reported at the second site.
Combined, the two sites had an estimated $4 million in annual MRO spend.