Packing in savings with smarter processes

The costs associated with indirect procurement can be double the amount spent on the products themselves; a simple statistic that hides some tricky challenges.

 

As one of the largest providers of industrial supplies, RS Components is in a unique position to understand the needs of its customers, help them improve their processes and introduce efficiencies.

 

Procurement teams and engineers face many challenges when it comes to the maintenance, repair and operations (MRO) of their organisation’s assets and facilities. The supply chain for indirect materials is complex due to the number of stakeholders involved, a fragmented supply base and the sheer volume of products split across multiple categories. In addition, there is constant pressure to reduce costs.

 

So, if your organisation spends £100,000 on purchasing products over the course of a year, you may be spending a further £200,000 on processing or soft costs.

 

Manufacturing companies need to operate at scale – high volumes, consistent outputs, and carefully managed costs. One small problem can easily be amplified, whether it’s unplanned downtime, or an unexpected expense.

 

In our Indirect Procurement Report 2019: The Future of MRO, published in association with the Chartered Institute of Procurement and Supply, we found that people responsible for indirect procurement and MRO supplies face a range of pressures both on a day-to-day basis and at a strategic level.

 

The need to reduce operational budgets comes top (62%), closely followed by the need to reduce inventory costs (42%), the pressure to improve asset performance (39%), and a lack of spend visibility (41%).

 

We’ve been working closely with Berry Superfos Blackburn, a business that has spent more than 50 years at the forefront of packaging design and innovation. It designs, develops and manufactures innovative plastic packaging solutions, such as injection-moulded and thermoformed packs. Their solutions are designed to add value to their customers’ products no matter what and where their market is.

 

Its' global, extended value chain means there are multiple stakeholders across the business with a need for both urgent and non-urgent parts on an ad-hoc basis.  

 

But with just one main order placer responsible for collecting requests, sourcing and ordering these parts, the system for getting hold of much-needed parts could become bogged down by bottlenecks and unproductive time.

 

Requests for orders could arrive via email, or as verbal requests, and often lacked crucial details around part numbers. And whether the item was a replacement spanner for an engineer or a big-ticket item, the process for order requests was the same.

 

Confronted by this challenging set of circumstances, we knew we had the insight, expertise and solution to tackle this common customer pain-point.

 

Solution 

Following initial discussions with the customer, we proposed the installation of RS PurchasingManager® and RS ConnectPoint®, which is the latest addition to our growing eco-system of value-added solutions powered by our commitment to ongoing digital innovation and omnichannel operations.

 

RS ConnectPoint® provides users with an intuitive touchscreen terminal so they can quickly connect to the RS PurchasingManager® platform, where they can find the exact part they need and order it. It has been installed in the customer’s workshop, next to its stores. And although RS Components isn’t the only MRO supplier working with Berry Superfos Blackburn, thanks to the improvements we are making and the additional value now being delivered, that relationship is only set to grow stronger.

 

The new solution gives the 20+ maintenance team easy access to over 500,000 products without the need to return to an office to browse a website on a PC. It does away with the need to call local suppliers or visit them in person to find parts and place orders. It also connects to our nationwide network of RS Local branches, so the customer can speak to their nearest centre. 

 

RS ConnectPoint® also comes with ImageFinder, innovative technology that lets the user take a photo of the item they need, before presenting them with a list of matching parts. While it’s currently in Beta, this is another step forward in reducing complexity, boosting convenience, and saving time.

 

One of the key benefits of RS ConnectPoint® is that it is saving time and freeing people up to be more productive. “If I think about how long it takes to place orders, there’s a clear difference,” says Dean Grimshaw, Engineering Supervisor, Berry Superfos Blackburn. “It probably takes around four times as long to place an order with our other MRO partners than it does using RS ConnectPoint®.”

 

 

We have also been able to help the customer analyse its historical spend data and identify patterns of MRO requirements. That has led to the creation of a series of monthly orders that encompass the items most frequently ordered, which has also helped reduce time and we calculate around £30,000 of processing costs for the customer.

 

“One of the most visible differences has been the dramatic fall in the number of orders we place,” Grimshaw says. “In all, more than 400 individual requests have now been consolidated into 12 monthly orders.”

 

As always with MRO purchases, the item price is only one part of the equation. In an industrial setting where an engineer needs a part, the time they lose leaving their workstation, walking to the purchasing team, and discussing what product is needed all adds up, too. And if they need to go off-site altogether and personally visit a supplier, even more time is lost.

 

RS ConnectPoint® has successfully transformed operations at Berry Superfos Blackburn in a short space of time. The benefits are clear to see, as is the value we’re delivering to the business. Our speed-to-order proposition is one, as is the way we’ve been able to save time – a scarce resource in any busy organisation.