West Coast, U.S. (with global reach)
Supply Chain Services
Background: A global life sciences company, based on the West Coast of the U.S., develops, manufactures and markets medicines for serious medical conditions, including numerous cancer and other life-threatening illnesses. The client uses Synovos full-storeroom management services, including Supply Chain, Asset Services and Technology. In addition to the on-site personnel provided by Synovos, the client also benefits from a dedicated Enterprise Strategic Sourcing Manager.
Synovos Supply Chain Services, in addition to delivering strategic sourcing, storeroom operations and logistics, also offers off-site purchasing as well as bulk and daily purchasing, as necessary.
The Opportunity: During the initial spend evaluation process, an opportunity to purchase directly from a specific product manufacturer presented itself as a cost-savings alternative to a distributor. The project involved a custom-made part manufactured for the client, with exacting specifications. Acting quickly in order to take advantage of the opportunity, the strategic sourcing manager contacted the manufacturer, introduced the idea and negotiated a direct purchase agreement delivering significant savings.
When the client project was completed, the same concept was shared with additional sites for the same client, thereby extending the program benefits across the enterprise.
Challenges: Among the challenges was the need to meet product specifications and performance, ensuring the newly sourced product was the exact same thing, performing exactly the same way in the demanding production environment.
A second challenge involved overcoming the incumbent supplier changing part numbers in the client CMMS system. Such a change limited Synovos’ visibility to the actual part instead of the true manufacture part number. Identifying that key information and delivering such significant savings was truly a collaborative project, involving the MRO storeroom operations team, supply chain, MRO asset management, Master Data Leadership™, and others.
Results Realized: With the help of the Synovos on-site operations team, those challenges were overcome by providing item specs for the individual part and doggedly addressing client concerns with documented research findings.
This sourcing optimization project delivered a 30% cost savings to the client for this single product. These results also led to a secondary opportunity, delivering an additional $22,000 in savings.
“This sourcing optimization project delivered a 30% cost savings to the client for this single product.”
Initial Involvement: A large, multinational pharmaceutical company realized its inventory deployment process, including the inventory location itself, was creating high indirect material costs because of lost productivity. Work orders were completed via a kitting process with technicians selecting products from bins throughout the facility. However, because products were stored in multiple locations, technicians were, at times, required to travel 40 to 45 minutes to secure the necessary items.
Added Value: Working with the client’s Six Sigma champion, Synovos recommended a “Super RoboCrib” carousel vending unit with locker capabilities. The unit is typically stocked weekly with enough inventory to cover up to two weeks. It has tremendous capabilities, including several required by the Food and Drug Administration such as lot control.
“These are well-built and reliable machines,” said Tim Ames, manager, Storeroom Technology, Synovos. “As long as you spend a few hours each month maintaining them, they won’t cause any problems. They are always there, waiting to be used.”
With this new process in place, technicians no longer need to walk across the campus to get parts; the kits are completed and issued using the locker capabilities of the Super RoboCrib.
Results Realized: Technician trip time was reduced to six minutes from 40 to 45 minutes, saving more than 300 miles in foot traffic and seven hours each week. This particular site is saving more than $90,000 annually, not including the increase in man-hours available for wrench time. The savings delivered 100 percent ROI on the project in less than 12 months.
A second site reaped savings of approximately $150,000.
“This particular site is saving more than $90,000 annually …. The savings delivered 100 percent ROI on the project in less than 12 months.”
Supply Chain Services
Initial Involvement: A general manufacturing company located in the Midwest detected a rapid increase in the cost of MRO inventory associated with its production lines. The sharp cost increase was both surprising and confusing. The company deployed Synovos’ storeroom operations program at two of its five production sites to better control MRO inventory, improve purchasing power, and accent the company’s drive for continuous improvement.
Added Value: Synovos, with help from its on-site team, researched the company’s MRO spending, eventually tying the increase in activity directly to new production equipment and materials.
“As we looked into it more, we learned that in fact, the spending wasn’t increasing,” said Debbie Scott, business development director, Synovos. “Just the opposite was true. While production efficiency improved, MRO material costs were decreasing.”
Synovos used its inventory management technology to analyze the MRO spend and create verifiable reports to answer the client’s tough questions. “We had a good idea why there was a perceived increase but the system gave us the opportunity to verify what we thought through the reporting function,” Scott said. “In the end, everyone was happy with the outcome.”
Results Realized: The company’s cost per 1,000 units actually decreased nearly 10 percent, a direct result of Synovos’ supply chain and storeroom operations services. The reduced costs were nearly $700,000 savings from one year to the next in MRO materials, labor, shipping and other costs for the manufacturer.
“The reduced costs were nearly $700,000 savings from one year to the next in MRO materials, labor, shipping and other costs.”
West Coast, U.S.
Supply Chain Services
Initial Involvement: A large general manufacturing company located on the west coast of the U.S. first implemented a procurement-only services agreement with Synovos in 2005. Over the course of the relationship, Synovos identified savings and process improvement opportunities, eventually leading the manufacturing company to expand Synovos’ scope of work to include overall supply chain management and storeroom operation services.
Added Value: In its expanded role, Synovos was tasked with reducing overall inventory while continuing to seek savings on the procurement of indirect materials. Through the use of Synovos’ exclusive data enrichment service, Master Data Leadership, the analysis of the company’s purchasing data uncovered many instances of duplicate parts supplied by different manufacturers or having different brand names. For example, duplicate elbow fittings were discovered listed under four different brand names. By limiting the part to a single brand the company reduced inventory and saved significant costs.
Results Realized: Synovos contributed to a reduction in overall inventory by more than 30 percent over three years, roughly $2 million in savings. As the partnership continues, additional reductions are still being found.
“We’re able to find such significant savings because we have the right tools as well as the expertise to interpret the data we get from using those tools,” said Vicki Byrd, director of operations, Synovos. “But we couldn’t do any of that if the client doesn’t communicate exactly what they want or we don’t communicate exactly what we can deliver.”
“Synovos contributed to a reduction in overall inventory by more than 30 percent over three years, roughly $2 million in savings.”
Initial Involvement: A multi-billion dollar food manufacturer used a reactive approach to maintenance - allowing assets to run until failure before maintenance stepped in. Although maintenance team members were great “firefighters,” the approach failed to improve plant reliability. Realizing in order to change from a reactive to proactive plant, the manufacturer invested in an asset management system. But, as with any change, there was significant resistance and the implementation ultimately failed. Disconnect between maintenance and the MRO / indirect materials storeroom was a major limiting factor for success. A second initiative, this time involving the third-party MRO integrated plant services provider, was launched and backed by the company’s leadership team.
Added Value: Synovos worked with those key leaders to tie storeroom operations into asset reliability and master data leadership. This time, the goal was expanded beyond asset performance to include overall maintenance effectiveness. It was a decision that directly affected overall plant performance. A set of objectives and key performance indicators were established, the site was benchmarked and storeroom operations were integrated into the solution.
Results Realized: Plant maintenance was transformed into a well-planned operation utilizing a fully-integrated MRO storeroom to deliver improved master data, daily service levels and asset reliability performance.
|SOP Compliance||0% (no existing SOPs)||100%||100%|
|Zero Critical Spares Stockouts||70%||100% (meaning none)||100%|
|Stock Fill Rates||60%||98%||99%|
|Non-Stock Fill Rates||50%||95%||96%|
|Inventory Accuracy||65%||98% (through cycle counts)||98%|
|Inventory Reduction||-7-10% (inventory was growing)||5-8% annually||5%|
"A set of objectives and key performance indicators were established, the plant was benchmarked and storeroom operations were integrated into the solution."
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State of MRO and Indirect Materials ManagementWhite Paper
To benchmark the state of storeroom operations among companies of various sizes and in various industries, we undertook a nine-month survey of companies in automotive, education, food & beverage, general manufacturing, pharmaceutical/medical and other industries. The companies ranged in size from under 100 employees to more than 1,000. Read the survey results to see how your peers view the state of their MRO programs.
Come In Out of the MRO ‘Storm’ RoomWhite Paper
This paper, citing examples from a food manufacturing company, addresses three reasons why manufacturers should consider separating themselves from the day-to-day oversight and operation of the MRO storeroom. The choice becoming: continuing to manage the “storm” room in house or outsourcing the MRO operation to an on-site provider who can show expertise in storeroom management techniques and guarantee KPI performance.
Does Your Storeroom Database Contribute to Maintenance Effectiveness?White Paper
Does your MRO storeroom have a “just in case” bin; the bin where unknown parts are sent for “future” use. It’s a rare plant that doesn’t have such a box, bin, or maybe shelves assigned for that purpose. In nearly every plant we enter, even with advanced technology and more sophisticated tracking capabilities, we still find parts that are decades beyond their usefulness. In one case, we found an unidentified bearing stamped with a date of manufacture as 1956. The equipment it was matched too was undoubtedly long gone.