Plant Shutdown / MRO Logistix
Background: In the Life Sciences industry, full or partial planned plant shutdowns are commonplace throughout any given year. Typically, such shutdowns are related to general plant or preventive maintenance, or installation of new production lines or equipment. The shutdowns are sometimes necessary to meet or maintain FDA requirements. Others are used to improve machine operations and production efficiency by limiting or negating downtime. It’s a common occurrence. Any delay in material delivery or kitting accuracy could significantly impact production and, ultimately, profits. Such delays cost companies tens of thousands of dollars each hour.
For this particular long-term life sciences client, a proposed plant shutdown was planned as part of the regularly scheduled maintenance program, cleaning house, if you will, to improve operation effectiveness.
The client had just a few months to plan for the shutdown which involved six production lines spread across 750,000-square feet.
The Opportunity: Utilizing its logistics services, RS Integrated Supply quickly ramped up to speed on the project, reviewing the client’s required shutdown items and kitting requirements. The team of client representatives as well as RS Integrated Supply buyers and managers outlined the steps required based on complexity and volume of materials, began ordering materials and developing a kitting strategy.
The RS Integrated Supply team built each part into the RS Integrated Supply purchasing software system, identified suppliers required for those items and set up accounts with those suppliers, including arranging credit where needed.
At the same time, a team of buyers were working together in creating a master tracking document to understand the scope of the purchase for each item and identify cost savings opportunities by working with partner suppliers. Quote requests were shared and analyzed.
Once vendor selection was completed, purchase orders were sent, and confirmation received, including the ability of the different vendors – dozens in all – to meet the project timeline.
As materials arrived, the RS Integrated Supply team implemented the pre-defined kitting strategy. Each delivery tracked and recorded, offering real-time status reporting on percentage filled, location, etc. Items were placed in designated staging areas of the 15,000 square-foot warehouse and labeled with critical details. They were placed in clear bags at proper quantity and, when complete, the bag is heat sealed, with a final label added that included RS Integrated Supply part number, client part number, description, quantity, work order and area delivery designation (inside the plant). An index number was also added to speed inquiry resolution. When a client references the index number, RS Integrated Supply is able to identify where it is stored, where it is going, what percentage of materials are delivered, the assigned work order number and other information.
The finalized kits were then delivered to the client and placed in designated holding areas for client pickup as needed.
Challenges: Data. Like any MRO-related project, data quality plays a significant role. For this client and project, it was less the quality of the data and more how that data translated to actual purchases.
First look at the data revealed that the information was grouped into different areas around the plant, including production, maintenance, etc.
RS Integrated Supply needed to take a deeper dive to understand what plant areas required what parts and how many, and more specifically, to understand what parts are used at multiple locations throughout the plant. It was clear that a single SKU could be used in multiple areas of the plant and listed multiple times within each area. It was the RS Integrated Supply data team’s responsibility to understand the usage and provide information to the buying team that streamlines that usage in order to drive cost savings.
That information was used in developing the kitting strategy, which include temporary storage in the RS Integrated Supply fulfillment center as well as storage at the client location.
Results Realized: The first-year shutdown saw RS Integrated Supply process more than 1,660 kit lines for 60 kits with more than 1,080 SKUs, representing $1.23 million value.
The process went so smoothly, the client resumed production 1 ½ days earlier than scheduled, earning millions in additional corporate production value. The success also has driven the client to utilize RS Integrated Supply for five years in the plant shutdown.
RS Integrated Supply's MRO Logistix shutdown services have earned more than $5.5 million in value over five years for the client, or $1.1 million average per year. The 2019 shutdown project was the largest to date with more than 2100 kit lines, 76 kits and more than 1,050 SKUs.