Multi-site UK pharmaceutical manufacturer

Challenge

To limit the dependence on OEM suppliers in mainland Europe by converting OEM supplier parts to MRO consumables.

This will reduce both lead time and unit cost.

Objectives

  • To run a number of OEM to MRO conversion projects as part of IESA's inventory management programme.

Solution

IESA prepared a list of all the OEM parts which should be considered under the OEM to MRO conversion projects.

After gaining the approval of the client stores manager and engineers, IESA's stores and procurement team classified the parts into various commodity groups and then invited the appropriate key suppliers to run a stores survey on these parts.

The stores survey results were used to split the identifiable/convertible parts apart from the non-identifiable parts.

The next stage was to run a tender for the identifiable parts and to present the cost saving opportunities to the client.

On successful completion of the testing, all parts were changed on IESA's system to the MRO vendor for fulfilment of future orders.

Benefits

  • The client benefited from a reduction in the lead time and reduced risk of downtime as the parts were sourced from IESA's key vendors instead of from mainland Europe.
  • The client no longer needed to stockpile parts, removing the liability from the client's balance sheet and subsequently reducing their working capital requirements.
  • A further benefit was the average unit cost reduction of 25% and a reduction in carriage charges.