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 pharmaceuticals 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 whose responsibility is to identify and implement sourcing plans that reduce costs while improving service levels.
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 enterprise strategic sourcing manager contacted the manufacturer, introduced the idea and negotiated a direct purchase agreement delivering significant savings.
In the process of implementing those savings, the Synovos team worked closely with both the client and the manufacturer in ensuring the product was manufacturer-equal and that all appropriate documents, including the certification of compliance, were provided and verified as required by the site’s GMP (Good Manufacturing Practice) designation, before the product was sent to the production floor.
When completed, the same concept was shared with additional sites within the client’s network, thereby extending the program benefits across the enterprise while remaining GMP compliant. Additionally, the Synovos team is exploring how to leverage similar purchases across its client roster, thereby delivering further savings.
Challenges: Among the challenges was the need to meet product specifications and performance, ensuring the newly sourced item was the exact same product, performing exactly the same way in the demanding and highly regulated production environment. In some cases, when similar changes are made, a change management process is triggered. Those usually center on a change to the form, fit and function of the part. In this case, however, it was the same part sourced directly from the manufacturer. The process maintained compliance with the site’s GMP process (including the proper documentation for any FDA audits).
The industry’s regulation and government oversight mandates additional steps to maintain the integrity of the supply chain. Certification of conformance is one measure, as is USP VI Testing, which evaluates various types of plastics materials used in the production or packaging of pharmaceutical products. The end goal is to protect the purity of the final product without introducing cross contamination to the production environment.
Results Realized: With the help of the Synovos on-site operations team, those challenges were overcome by providing item specs, conformance certification and other requirements 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.”
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."
Master Data LeadershipSM
Initial Involvement: The global chemical manufacturer client engaged Synovos to cleanse and standardize its maintenance, repair and spare parts data. It provided a spreadsheet detailing 350,000 items in seven different languages that were housed at 33 different sites in four different regions around the world. It was a global Master Data Leadership project spanning 17 countries. About 60 percent of the data contained mismatches as well as missing product or location information, requiring Synovos personnel to go on-site to physically inventory the items.
Added Value: Synovos verified images for 200,000 of the 350,000 items from the client. That verification enabled the manufacturer to reduce inventory after identifying 70,000 duplicate stock numbers and leverage spend savings by identifying common items. In addition, common item identification increased uptime by improving production capacity. Overall, the manufacturers’ technicians spent less time identifying items, increasing their productivity and overall effectiveness.
Results Realized: The company has retained Synovos to manage its storeroom operations at five sites in the United States and is currently considering Synovos for global storeroom operations and Bill of Materials management.
"Synovos has the experience and institutional knowledge to lead a global project to enrich MRO data and parts in order to develop a sustainable database. Synovos’ project management is excellent, the team is responsive and flexible, and they showed their capability in working through issues unique to specific sites across the globe. They interact directly with the subject matter experts at all global sites providing education, guidance and encouragement to meet timelines."
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Uptime Magazine: Reliability and the MRO Supply Chain: 4 Essential ToolsArticle
Many companies continue to struggle with the maintenance, repair and operations (MRO) issue by ignoring or at least tolerating the existence of the MRO storeroom and the necessary operations around it. Few companies work to improve the MRO function in the supply chain and some do not even consider MRO storeroom management as part of plant operations at all. Others are striving to strike a balance in managing MRO.
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.