“Store operations in an outsourced environment [is SDI’s expertise],” said Barrett. “They’re supplier agnostic and have proven productivity. We agreed to dismantle the [legacy] operation. SDI and a joint implementation team worked with the pilot site, understood where the differences were and knew how to improve them. They leveraged the suppliers that [were right] for us.”
“Now we’re looking at better than 10 percent net savings,” he added. “The process efficiencies and technology go beyond that. It’s an aggressive start, a qualified success and continues to gain steam.”
The 2,500-acre Chocolate Bayou plant near Alvin, Texas, for example, had 40 different storerooms with little organization.
“It was hard to grasp where the parts were—where the inventory was,” said Moore. “Say they had five roller bearings in stock and the process went down; they couldn’t locate the bearings needed to make the repair and often went out to purchase new parts to make the repair when the inventory was on-hand some place on the campus, but no one knew where.”
The storeroom was “an afterthought before SDI,” added Moore. “It was minimally staffed but subject to stock outages and frequent down time. There was no dedicated management of the storeroom. We provide a focus there to improve it.”
Define your MRO objective
In its whitepaper, “10 Essential Points, MRO Supply Chain Transformation,” SDI confirmed its objective “to transform the MRO supply chain from the initial state to one with appropriate automation, performance monitoring, metrics and delivers an overall reduction in total costs.”
There are 10 key points to consider when upgrading, enhancing or refining MRO. Number 10 in the list, includes a number of essential items. They include strategic sourcing; spend analytics and reporting; dedicated teams for end-to-end transaction processing; online customized catalog creation and maintenance; budgeted controls and workflow; compliance monitoring; non-linear forecasting and replenishment; inventory management systems; and commodity expertise.
The key, SDI stated in the whitepaper, is to “understand the fundamentals of MRO.” “The first step is setting realistic objectives and building a flexible framework to allow for the breadth and depth of MRO and facilitate a successful transformation.”