With today’s ever-tightening budgets, companies can no longer afford the luxury of a large maintenance workforce, with the result that existing maintenance engineers are experiencing greater demands on their time. Outsourcing the operation of the company’s MRO (maintenance, repair and operations) and stores and maintenance spare parts procurement is often the solution, says Paul Jenno of ERIKS Integrated Solutions, a division of ERIKS UK
In today’s economic climate, productivity is crucial; and there is great pressure on maintenance engineers to solve equipment breakdowns with the minimum of downtime. If the spare part in question is on site, then this may be reasonably straightforward, but if the part is missing, then raising requisitions, liaising with purchasing to source the part as quickly as possible and actually fixing the problem once the part has arrived can be an extremely lengthy process – and as we all know, time is expensive.
There are also less visible but equally significant consequences to wasting engineering time – time that could be far more usefully spent working on energy saving measures, investigating plant performance with a view to increasing efficiency, or undertaking preventative maintenance.
So what’s the solution? How can MRO stores be restructured to avoid the waste of engineering time without making a large investment,? The answer is to outsource the whole stores operation to a company that has specialist experience in MRO operations. Let’s see exactly what this involves.
Right on time
Essentially, the third party company takes over every aspect of managing the stores. The stores operation effectively becomes a business within a business, with the maintenance engineers as its customers. The new stores operation is run not by a stores supervisor but by an experienced manager who is targeted on operating the stores efficiently and cost-effectively and in such a way that the needs of the customers – the maintenance engineers – are given top priority.
To help meet these targets, specialised systems developed and refined over years of experience should be introduced. These should include a paperless stores management software solution, capable of accurately keeping track of tens of thousands of products and ensuring that timely orders are always placed for stock replenishment.
This not only means that components in the stores can always be located quickly, eliminating the desperate hunt for the right part in the event of a breakdown; it also means that the requisition process is streamlined. The result is that maintenance engineers can depend on the part they need being in stock when they need it, and they can also access it quickly, thereby saving their own time and reducing plant downtime.
Naturally, the stores personnel handle all the ordering of stock from external suppliers, and all the order chasing to ensure that the orders are fulfilled on time. Since they see the maintenance engineers as their customers, they are also able to provide new value-added services.
A good example is kitting. If a planned overhaul on a machine is scheduled, the stores staff can produce a complete kit of all the replacement components that will be needed. All the maintenance engineer has to do is go to the stores and collect the single box that’s ready and waiting – a far cry from the old approach of a time-consuming search through dozens of bins to find the necessary parts.
Hopefully, this sounds like an excellent arrangement, but it would be fair to ask where the hard savings are going to come from.
As one of Europe’s largest engineering groups, ERIKS has great buying power and can invariably negotiate better prices for the components it buys than a company that sources its own MRO stock. In addition, because of its efficient stores management systems, wasteful over-stocking is eliminated. Then there are the considerable cost savings resulting from downtime reductions made possible by the enhanced efficiency of the MRO operation.
Freeing up the buyers
There are also benefits for other parts of the organisation, particularly the purchasing department, who are usually required to source obscure components and negotiate the best prices and deliveries with numerous suppliers. Now they can leave this to the third party, freeing up their time for more valuable activities. MRO can quite often account for less than 10% of a plant’s spend but over 60% of its procurement department’s transactional activity.
Having just one MRO supplier to deal with frees up the buyers to concentrate their efforts on getting the best terms for the really large and important contracts, such as raw materials, energy, telecommunications services or the company vehicle fleet.
There can be little doubt that maintenance engineers are doing their best and most useful work for their employers, and the work they like best, when they are engaged on engineering tasks. MRO outsourcing can make this happen and at the same time, provide a modern solution to old-fashioned stores operations.