A manufacturer gained more time for value-added activities by outsourcing inventory replenishment.
The cost of high-volume, relatively low-value maintenance, repair and operations (MRO) purchases may not take up a huge amount of an organisation’s budget, but buying these parts can be an enormous drain on employees’ time. Engineers, procurement professionals and others involved in the purchasing process can spend significant periods sourcing and buying items – hours and minutes that would be better spent on value-adding tasks.
There are, however, alternative systems. Inventory management services, for example, remove the burden of managing and replenishing MRO stock, allowing workers to focus more on core activities.
The benefits of vendor managed inventory services
A fifth of procurement professionals surveyed for the latest Indirect Procurement Report from RS and the Chartered Institute of Procurement and Supply (CIPS) say they use a vendor managed inventory service for fast-moving, low-value parts. Such services offer many benefits, with users citing better visibility of stock and spend, reduced time raising orders, higher availability, improved productivity and better working practices.
How do such services operate? With an inventory replenishment solution such as RS ScanStock®, organisations work with a specialist team to select the right MRO products and order levels for their circumstances. RS then manages stock, replenishing accordingly, and workers have quick and easy access to these products via open bins.
The results? Consolidated spend, a simplified source-to-pay process and improved inventory management. It’s a more efficient way to handle the small number of low-value lines that create a disproportionate amount of work plus staff are better able to focus solely on their main job.
An inventory replenishment solution in action
A manufacturer of high-performance mass spectrometers reaped the benefits of RS ScanStock® when the solution was introduced at its north Wales facility.
The company’s supply chain team was working with RS to improve its processes when the latter also identified opportunities to streamline working practices and thereby save even more time and money. With the existing system, the stores team dealt with 30 people per day wanting the same fast-moving, low-value supplies at an assumed cost of £2.50 per visit. By installing RS ScanStock®, the same supplies became openly available to the 30 staff near their workstations instead.
This change reduced pressure on the busy stores team, allowing them to spend more time on other activities. It reduced the walk-and-wait time for the other employees too. With the necessary consumables at hand, technicians and engineers spent 40% less time retrieving parts and were able to concentrate more on the assembly line.
These time savings amount to the equivalent of more than £36,000. It’s unsurprising, therefore, that this manufacturer plans to build on these gains by adding more items to the inventory managed within RS ScanStock®. With other businesses reporting similarly positive results, how might your organisation benefit from introducing this service?
