Keeping stock levels on track for a railway maintenance contractor

Vendor-managed inventory solutions can eliminate stockouts and reduce unnecessary spend

“Unscheduled downtime is the one thing maintenance professionals really want to avoid, but it’s a fact of life for many in the sector,” writes Raj Patel, Managing Director for the UK and Ireland at RS, in the recent RS and Institution of Mechanical Engineers (IMechE) maintenance engineering report. The biggest drivers of downtime, continues Patel, are “ageing assets reaching the end of the life, but mechanical failures and delays due to product or component availability are also common.”

The latter was familiar to railway maintenance engineers working for a leading transportation company and based in one of the UK capital’s major stations – but in this instance, a trusted maintenance, repair and operations (MRO) supplier put forward a solution. Here’s what happened.

The entire storage setup was far from ideal, described as a graveyard for consumables, with more than 300 MRO products housed in a cubby hole under some stairs. Engineers didn’t know what was on the shelves, the same parts ended up in different places and finding any item was often a matter of luck. This lack of organisation and lack of trust in product availability led to both stockouts and unnecessary spending – a cycle of boom and bust.

With no system in place to monitor use, the customer had no control over the process. “Goods were removed and used when required and replenished sporadically by the end users as stock was exhausted,” reports the RS account manager.

The account manager undertook an in-depth discovery piece involving key stakeholders to fully understand the situation before proposing the introduction of RS ScanStock® , an open bin vendor-managed inventory solution that allows easy access to essential low-cost parts. They also arranged for the RS ScanStock® solution to be installed on a mezzanine area within the stores, rather than the previous position under the stairs.

“RS ScanStock® is a flexible solution that adapts to the customer’s needs,” says the account manager. “It provides clarity on stock availability, eliminating potential stockouts, and a process for replenishment.”

“RS ScanStock® has addressed all of the customers problems and, crucially, given them peace of mind,” adds the account manager. How? By giving maintenance engineers the confidence to know that then when they go to a shelf, the product is there.

“RS is on site regularly so they know who they can talk to about adding products, changing products or anything else that they need,” explains the account manager. “They can feel confident that the item will be there for them so you take away that boom-and-bust mentality of overstocking then understocking.”

Introducing a solution that provides better oversight, inventory control and replenishment has quantitative benefits too, avoiding procurement and productivity costs of £73,733 following the implementation of RS ScanStock® . This comes from improvements to procurement efficiency, with a vast reduction in the number of Purchase Orders raised, and increased productivity thanks to reduced walk-and-wait times. Improved processes (streamlining how goods received are handled) and inventory optimisation (reductions in both product carrying costs and unofficial inventories) help too.

“It’s about the overall impact of the spend,” says the account manager. “It’s giving them the visibility of what is being used and in what quantities. We can then negotiate prices with the manufacturer based on these volumes, which we didn’t know before. In the longer term, we can use this data to say you’re using a lot of this item but not this item and really start to right size their consumables list. Planning becomes more effective.”

Watch the animation for a summary of how RS ScanStock eliminated stockouts and reduced unnecessary spend for a Major Railway Maintenance Contractor

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