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.