Global insulation group

The situation

Globalisation of supply has created opportunities for companies to specialise to an incredible degree – serving customers with consistent, niche products anywhere in the world. But that also means maintaining multiple manufacturing and logistics operations, which are not always as aligned as the products they produce.

That was the problem facing this global manufacturer of insulation products for the construction industry. Management was concerned that maintenance, repairs and operations (MRO) – essentially, parts and servicing for its machinery – was inconsistent. standardising on an optimum approach, they reasoned, could save a significant chunk of the USD $11m (£7.5m) annual spend on MRO.

The solution

Management’s instincts were spot on, as Proxima’s team discovered. But the issue wasn’t simply one of inconsistent approaches. There were sites where stocks of spares were being totally neglected – poorly accounted for, but also inconsistently recorded and sometimes even completely forgotten about in dark or inaccessible stock rooms.

We discovered sites with no register of inventory at all, or which relied on one maintenance worker to keep track of what was in stock. Overstocking was common – as a guard against plant downtime. But in some cases, factories were keeping stocks of spares for machinery that had ceased to be used many years before.

At a basic level of procurement excellence, we were immediately able to apply best-in-class approaches to MRO – such as classifying spares and service contracts to identify priority needs – with a one-hour turnaround to keep plants running – through to non-critical items, which could be fixed next day.

But there were more gains to be had. A key pillar of Proxima'sapproach is Enablers – the technology and supplier relationships that ensure a supply ecosystem is efficient and responsive. So we worked with one key supplier to roll out their own stock management system into all the locations (at zero cost) – with the proviso that it could be used by other, non-competing suppliers.

Together with much closer co-ordination between plants to reduce duplicate stocking and share ideas for better machine maintenance, this created a dramatic improvement in stock levels and more efficient access to the right spares at the right time. Then by establishing working groups at each plant, we helped create an employee-led optimisation culture. They helped standardize the design of stock rooms, creating well-lit and clearly organized facilities that supported better stock management.