Business problem:
Unplanned purchase of engineering spares and consumables led to extra stocking, uneconomic ordering and inefficient inventory management process. This further led to locking of cash and adding an extra burden to expenses
Solution Approach:
- A detailed analyses of inventory management process
- Order and procurement
- Consumption
- Storage
- Spend categorization
- Dipstick vendor survey to assess factors for better pricing
- Analyses of engineering stores operations and requisitioning mechanism
- Assess correlation between consumption & procurement
- Assessment of process equipment in salvage to identify the possible utilization and potential salvage value
Key Outcome and benefits:
- One-time cost-out of over $ 750,000 and annual savings of over $ 175000 every year through inventory management
- Savings of over $100,000 every year through consumption reduction
- Identified equipment from scrap and salvage department that can be auctioned
- Total benefit of $ 750,000 (one time) and recurring benefit of over $ 275,000 on the spend base of $3.25 Mn.
