Case Study 1
A global automotive manufacturer was having difficulty controlling its spiraling indirect material costs. With our assistance they successfully gained complete management of their maintenance and consumable spend and established a World Class control system.
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Customer Profile Automotive component manufacturer based in the UK |
Approach De-fragmentation of indirect material supply chain |
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Challenges Falling sales Declining margins |
Solution Integrated Supply Programme Pro-Pod RFID Automated Engineering Stores |
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Objectives Reduce indirect material cost Increase staff productivity
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Benefits £400k saving Reduced travel and retrieval time Removed non-value added functions |
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A UK based manufacturer of high volume low margin components needed to strengthen its’ advantage in a competitive market.
The company, which employed over 700 employees with sales of more than £140 million, struggled with high fixed overheads, declining margins and falling sales.
With pressure increasing to maintain its’ profit position, the Company engaged Propeller to investigate the area of Maintenance, Repair and Operating spares and consumables.
The objective of this project was to find ways to improve the cost base in this area and drive savings to the bottom line - whilst delivering efficiencies at the same time.
We worked with the customer to streamline and improve their procurement to pay processes. Working closely with Engineering & Maintenance, Finance, Purchasing and Production we commenced work on identifying ways in which to deliver value across all departments.
Through a structured process, we were able to identify waste and deliver substantial productivity and profit benefits.
The outcome was a fully integrated MRO supply chain and automated Engineering Stores managed by Propeller delivering the following:
• Supplier invoices and purchase orders reduced from 280 per month to 1;
• Engineering stores re-order process automated saving 15 hours per month;
• Full stores stock take reduced from 176 man hours to 2;
• £18k saved through reduced travel and retrieval of MRO items;
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The Bottom Line
£400,000 direct cost savings in year 1.
If you’re interested in achieving similar results in your company, please contact us to set up an initial telephone conversation.