An 'Insite' into spares control
September 1st 2009

An innovative approach to maintenance spares management can deliver significant financial and operational benefits to manufacturing companies, as Ian Ritchie,managing director of Brammer, explains

MRO spares management is a complex issue for manufacturers, with rapid access to spares vital to avoiding costly downtime. However, the required spares are often of low value and required infrequently, while the sheer range of components needed can be daunting. And for many, that means an inefficient process dealing with a wide variety of suppliers across many different product categories.

This leads to engineering, purchasing and administration time being spent identifying the required products, finding suppliers, negotiating prices, receiving and managing goods as well as ongoing stock management costs.It is further complicated with parts often required at short notice – often immediately – to prevent plant-critical downtime.

This process impacts heavily on purchasing and maintenance team productivity. For maintenance teams, it often leads to a focus on fire-fighting – dealing with immediate requirements to keep production lines running – rather than strategic projects to improve output and efficiency, or preventative maintenance to reduce future risks of downtime.

Reducing working capital Stock management is also frequently an issue, with a large value of stock being held 'just in case' as reliable management data on component usage often does not exist. This means cash unnecessarily tied up in inventory and the risk of a productioncritical component being unavailable when needed. At a time when cash is king, any actions which can be taken to eliminate unnecessary inventory and waste in business process transactions should therefore be welcomed for the cost savings and working capital reduction it can deliver.

The ideal solution is one which not only reduces MRO spares processing and handling costs, but also rationalises the supplier base, numbers of spare parts used and stock held, while guaranteeing quality and continuity of supply.

One solution that is helping an increasing number of major companies to reduce total acquisition costs, reduce working capital and improve production output and efficiency, involves the establishment of what is effectively a Brammer branch on a company's premises, serving only that company and geared entirely to meeting its needs. A Brammer 'Insite' simply bypasses many problems associated with in-house spares management by effectively outsourcing all procurement and inventory management issues to Brammer.

Insite into Alcoa

An example of this is the 'Insite' established by Brammer for Alcoa, when it constructed a greenfield primary aluminium smelting facility in eastern Iceland. Insite operates on a 24/7/365 basis, with a 10-strong team handling all ordering, storeroom replenishment, goods receiving, inventory management, internal delivery, kitting and staging services and technical support.

Brammer has been working onsite since the construction phase of the project to create a sustainable, cost-efficient source of supply, managing stores, designing and managing the warehouse and supply chain to ensure spare parts availability with transactional costs minimised. To assist Alcoa with vendor reduction and deliver transactional and business process cost savings, Brammer established both a local supply chain for consumables, PPE and site maintenance products and an international supply chain covering some 5000 individual product lines.

The company's technical and sourcing expertise is used to deliver cost savings for Alcoa in a range of engineering and production-related projects, most notably through OEM parts conversion. This involves Brammer identifying spare parts being sourced from an OEM, which Brammer then provides at lower cost due to its purchasing economies of scale, or identifies a fit-for-purpose alternative assisting an engineering standardisation programme. Brammer is also using its technical expertise to help Alcoa achieve energy cost savings. One project has seen Brammer recommend the changing of the Vbelt drives on blower fans to reduce energy consumption and improve the efficiency of the production line.

By the end of 2008 Brammer had delivered close to £1 million in operational cost savings through activity during establishment of the supply chains, savings on capital equipment and spares, and individual projects to reduce energy usage and spares inventory.

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