The costs associated with indirect procurement can be double the amount spent on the products themselves

The background
When it comes to purchasing supplies and managing inventories, procurement and operations professionals are under constant pressure to reduce costs and keep lines running. It’s a fine balance given any weakness in the chain can lead to machine downtime if products aren’t sourced on time or correctly. Combined with the use of inefficient systems and processes, which can have a direct impact on both spend and productivity, it’s easy to see why buyers need suppliers who proactively support them on the journey towards purchasing excellence.

RS Components is an omni-channel solutions partner, offering an unrivalled choice of products combined with a series of innovative and value-added services and a world-class customer experience.

Working with customers to understand their challenges and identify where valuable gains can be made in terms of time, money and process, RS drives strategic improvements through a range of innovative solutions that match the existing capabilities and future ambitions of the customer.

The challenge
German manufacturing giant Siemens meets global demand with a lean approach at its Congleton site in Cheshire, where it produces more than one million variable drives and controls a year.

The Siemens R&D team were faced with an inefficient e-procurement process for ordering parts, which led to delays in stock arriving. This created bottlenecks further down the line and led to reductions in productivity that needed to be rectified.

With multiple personnel requesting urgent, ad-hoc parts and only a limited number of employees able to access the procurement system, the procure-to-pay (P2P) process was also inhibiting the performance of Siemens’ buyers and R&D personnel. Despite the low-value nature of many of the parts, an inordinate amount of time was spent on the process, which hampered the team’s ability to carry out their core roles and led to an increase in P2P process costs.

The solution
RS worked closely with the Siemens team to identify what action could be taken to streamline and improve the indirect material purchasing process. By using cost calculators, RS was able to demonstrate the savings that could be made through the use of its dynamic service solution, RS ConnectPoint™, in place of the existing ad-hoc ordering method.

RS ConnectPoint™ is an easy-to-use touchscreen terminal that allows the user to quickly find the part they need and order it. RS ConnectPoint™ is powered by RS Purchasing Manager™, a customisable web-based order management tool, which reduces costs involved in the procure-to-pay process of each order.

RS ConnectPoint™ has improved Siemens’ ad-hoc order process by eradicating previous bottlenecks; resulting in efficiency savings and a considerable reduction in ‘soft’ costs.

The outcome
Siemens’ focus on lean manufacturing and the challenge of eliminating unproductive and time-consuming activities from the purchasing process demanded a flexible supplier with an agile approach.

“RS ConnectPoint™ has saved Siemens £24,700 on the purchase-to-pay cycle and contributed to a reduction in time consuming activities”Janet Haslam, Senior Buyer, Siemens

RS Components worked in partnership with Siemens to overcome its challenges, helping them to make productivity gains and tangible cost savings. Using RS ConnectPoint™ has also simplified a previously inefficient process, freeing up valuable time for the engineers. Janet Haslam, Senior Buyer for Siemens, says: “ConnectPoint works in conjunction with our own eProcurement system and is used by our engineers to place ad-hoc requests. It has already saved Siemens £24,700 on the purchase-to-pay cycle and contributed to a reduction in time consuming activities.”

To find out how RS ConnectPoint™ can support your business please get in contact with us here.