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…"
East Coast, U.S.
Background: A publishing company based on the east cost of the U.S., publishes multiple outlets, including two newspapers in the top 100 circulation in the U.S., as well as dozens of smaller publications. Combined daily circulation equals more than half a million. The client, moving through multiple restructurings and ownership groups, remains one of the longest active Synovos clients and benefits from a full-service integrated plant management program. As part of its program, the client also benefits from our asset services expertise.
The client operates a printing, packaging and distribution center in excess of 680,000 square feet with maintenance team of 30, including 15 electrical and 10 facilities, operating 24/7.
The Opportunity: Sometimes, just paying attention leads to significant savings opportunities. For this client, the opportunity arose after a beveled gear-set failed. The on-site storeroom management team met the immediate need and helped get the equipment back online and in production mode. However, in reordering a replacement gear-set, the team was surprised to learn the lead time on this critical spare had grown to in excess of 16 weeks.
The drive assembly, consisting of one large and one small gear that are manufactured as a match-set, drive a large printing impression cylinder. Any component failure on the three-story tall vertical printing unit is absolutely critical to production.
Alerted by the on-site Synovos team, the Asset Services engineers seized the opportunity to find a more reliable, less expensive source offering shorter lead times.
Challenges: That search quickly revealed that options were limited, with all suppliers having similar costs and lead times. There was no real benefit to making a change. Instead, Synovos reliability engineers and machinists designed a new set without using any formal design plans, instead referencing a well-worn sample.
Synovos identified the material hardness, type of gear, pitch of the teeth, dimensions, etc.
The process eventually took the Synovos team to Quebec, Canada, where a machine shop was willing to reverse engineer a new set of gears, both sizes, to the exact specifications required.
Consulting with the client’s head machinist, Synovos secured a test sample and shared with the client for inspection and approval.
Results Realized: In approaching the problem, Synovos engineers explored multiple options, including producing larger quantities of both gears. Although the smaller gear wore out more often, by replacing the larger gear at the same time, it was thought additional shutdowns would be avoided.
To maximize savings and eliminate downtime, Synovos recommended the production of the initial gear set – large and small – and a second smaller gear. Because of the way the two components interact, the smaller one wears more quickly. Producing a second matching smaller gear, means the more complex maintenance – changing both large and small – only needs to be done every other time.
The recommendation, which the machine shop was willing to accommodate, resulted in a cost savings as well as in reduced maintenance repair time and overall production downtime. At $400 per small gear, Synovos saved significant money but, more importantly, reduced the time necessary to install each new gear set. Replacing both gears requires the entire drive shaft to be disassembled. However, replacing just the smaller gear was a less intrusive project and took one-third less time and effectively doubled the life of the entire part.
The re-engineered gear sets have performed flawlessly since the change, cutting the overall cost by 50% and lowering the lead time from 16 weeks to four, significant results with 90 different sets in use at any given moment. Additional labor savings were realized as well with 65% less time used to replace the part. Downtime savings were also earned by cutting lost production time by a third.
“At $400 per small gear, Synovos saved significant money but, more importantly, reduced the time necessary to install each new gear set.”
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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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.
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.