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 eff iciency by limiting or negating downtime. It’s a common occurrence. Any delay in material delivery or kitting accuracy could signifi cantly impact production and, ultimately, profi ts. 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 eff ectiveness. 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 arm – MRO Logistix (MROL) – Synovos 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 Synovos buyers and managers outlined the steps required based on complexity and volume of materials, began ordering materials and developing a kitting strategy. The Synovos team built each part into the Synovos purchasing software system, identifi ed 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 Synovos 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 MROL 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 Synovos 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, Synovos 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. Synovos 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 Synovos 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 Synovos fulfillment center as well as storage at the client location.
Results Realized: The first-year shutdown saw Synovos 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 Synovos for five years in the plant shutdown.
Synovos’ 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.
“Synovos’ 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.”
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.”
Midwest, U.S. (global company)
Integrated Supply Chain Management
Initial involvement: A large life sciences manufacturing company, based in the MidWest U.S. with global reach, enlisted Synovos integrated supply chain management services to bring added value to the company’s MRO supply chain program. With more than 50,000 SKUs and $20 million in spare part inventory spread across nearly a dozen storerooms, the client was looking to take an already strong MRO program to the next level.
A Synovos team of 13 employees, including multiple buyers and attendants, a site manager and others, worked to identify different processes and establish best practices to further drive down inventory levels without impacting service or creating production downtime.
Added Value: While the full storeroom management program delivered significant client savings through strategic sourcing, inventory optimization, and enhanced MRO storeroom management, it was clear the conditions required even more attention in order to meet client expectations. Well into the client contract, Synovos introduced a repair program initiative aimed at driving additional client savings while staying true to the initial goal of lowering inventory levels. Using a pre-identified list of parts that could be repaired, the team gained significant savings in the process.
Challenges: As with any MRO supply chain program, client acceptance and participation are mandatory to achieving desired savings. In this case, client maintenance technicians, engineers and others had to be convinced that returning specific parts to the storeroom to initiate the repair program would return value. It was important to overcome the stigma that repaired parts are less efficient or trustworthy than a new part.
Results Realized: By repairing instead of replacing tools and spare parts, Synovos has delivered 60% cost savings to the client, compared to the purchasing of new parts, in the year the initiative has been in place, adding still more value to the overall program.
An example involved a failed valve on one of the company’s production lines. Full replacement with a new unit would ding the budget at $4,345. But, an evaluation of the part and a better understanding of why it failed, unveiled that the failure was not catastrophic. Instead, it cost $1,053 to repair, bringing a 76% savings.
Over time, the site team, working closely with the client, set a minimum threshold of 53% savings. Meaning only repairs earning that minimum savings would be approved.
An added benefit to the repair program is the additional warrantee earned in the process. In some cases, the failed part may be covered by initial warranty which is then extend when the repair is made, driving still further savings.
"By repairing instead of replacing tools and spare parts, Synovos has delivered 60% cost savings to the client, compared to the purchasing of new parts…"
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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Life Sciences Plant Shutdown Case StudyCase Study
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 eff iciency by limiting or negating downtime. It’s a common occurrence. Any delay in material delivery or kitting accuracy could signifi cantly impact production and, ultimately, profi ts. 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 eff ectiveness.
The MRO Dilemma: Major Time, Minor SpendArticle
Experience shows that managing the MRO supply chain consumes a large amount of time from nearly every department in a manufacturing plant. While MRO spend typically is only six to 10 percent of a plant’s total, it absorbs 70 to 80 percent of all transactions and tied to half of all emergencies affecting plant reliability.
This article, originally published in Uptime magazine, explores the reasons behind the negative impact and offers suggestions on how to correct course and turn the MRO storeroom from a dilemma to an asset.
Managing Critical Spares to Achieve Plant ReliabilityWebinar
In this webinar hosted by IMPO magazine, Synovos Reliability Engineer Steve Clayton explains why companies struggle with MRO, defines how critical spares impact plant reliability and provides an approach to mitigate associated risks
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.