Rationalizing purchases and management of spare parts

Details

Company International paper manufacturing group
Area Purchases and management of spare parts

Rationalizing purchases and management of spare parts in a multi-site company

Challenges

  • standardizing codification and optimizing spare parts management of the group worldwide
  • reducing total amount of immobile stock in spare parts warehouses

Aims

Simplification: reduction in variety and number of codes and clear identification of individual spare parts, avoiding errors of insertion and duplication

Efficiency: facilitating search for specific spare part on the basis of its technical features using the entire warehouse network in the different branches of the Group

Cost saving: adopt advanced management policies and optimization algorithms

Controlling: introduce KPI on the performances of the warehouse and redefine the Framework Agreements of the main spare parts suppliers

Transparency: have a purchases flow that is traced and controllable in real time
Solutions

Solutions

The process of optimization of warehouse management was structured in various phases:
design of new codification standard

  • coding of all items in the warehouses
  • correction of the errors of the old coding and unification of interchangeable codes
  • redefinition of layouts and introduction of controlled accesses
  • training of warehouse workers and information to maintainers
  • identification and elimination of obsolete items
  • management of low-turnover codes with a view to disposal and sharing
  • introduction of algorithms for inventory optimization
  • design and development of KPI dashboards
  • review and/or introduction of Group procedures
  • introduction of Framework Contracts

Main results

  • enabled exchanges within the various Group offices thanks to the unambiguous coding and reliability of the codes (+ 50% of intercompany exchanges in 1 year) and to the possibility to search for spare parts according to the specific technical characteristics
  • re-layout of the warehouse for alignment with the Group’s infrastructure standards
  • identification and elimination of obsolete items with the release of storage volumes and the possibility of new layouts
  • blocking of purchases for materials in excess of stocks and/or slow moving (potential saving due to non-purchase equal to 18% of the immobile stock)