SDI MRO Connected
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The document provides an overview of capabilities for improving materials and storeroom management through a more connected enterprise-wide solution. It discusses how firms are investigating such solutions to address issues like unplanned downtime, inaccurate inventories, poor on-time delivery, and work order delays due to their current decentralized and fragmented approaches. The overview then presents the SDI solution for connecting every link of the maintenance, repair, and operations supply chain to reduce total cost of ownership and improve operational uptime through offerings like data management and analytics, sourcing and procurement services, and engineering services.
SDI MRO Connected
- 1. Presented by: Capabilities Overview March 2015 Capabilities Overview MRO MATERIALS AND STOREROOM MANAGEMENT John Kronenwetter Vice President
- 2. Copyright 2015 SDI, Inc. All rights reserved. Why are firms investigating a more connected, enterprise-wide solution? Equipmentunplanneddowntime ThousandsofSKUs InaccurateInventoriesandtoomuch Pooron-timedelivery Workordercompletiondelays Tensofthousandsoftransactions Decentralizedspend/Highlyfragmentedvendorbase Lackofvisibility,technologyenablers&informationsystems Nocentralauthority-stakeholderscrossmultipledepartmentswithconflictingagendas • Accounting–lowesttransactioncost • Finance–minimuminventory • Maintenance–partsavailability • Operations–laborproductivity Under-resourced,neglectedcategory MinimalinvestmentduetodifficultyincalculatingROI/unknownTCO Risksandcosts(direct&indirect)arenotclearlyvisibleorcontrollable 2
- 3. Copyright 2015 SDI, Inc. All rights reserved. Competing Agendas & Conflicting Interests Structurally, this approach has been fragmented between MRO stakeholders across multiple departments – can’t align MRO with other strategic initiatives (OEE, Lean, Six Sigma, sustainability, operations excellence) • I.T. – systems compatibility, data integrity, analytics &reporting • F&A – minimum inventory &PO transaction costs • Storeroom – fire fighting • Reliability–Overall EquipmentEffectiveness (OEE) • Maintenance– parts availability • Operations – production optimization • Sourcing &procurement – lowest material price & total cost of ownership This fragmentation makes it all but impossible to align MRO with other organizational strategies such as overall equipment effectiveness (OEE). 3
- 4. Copyright 2015 SDI, Inc. All rights reserved. Silos of Pain Atypical organization's MRO processes are usually fragmented into many sub-processes and tasks that are carried out in departmental silos. Often, no one is responsible for the overall performance of the end-to-end supply chain and the departments have conflicting interests. These suboptimal practices result in “silos of pain”. These silos evolve as individual departments implement localized and isolated MRO-related management tactics that ripple through the organization, most often in terms of added costs and inefficiencies. 4 Counterproductive behaviors won’t change until individuals or departments see and understand the enterprise impact. Maintenance & Engineering IT Finance & Accounting
- 5. Connected = Efficient and Productive 5 The hidden costs can exceed MRO parts spend by 200%!
- 6. Copyright 2015 SDI, Inc. All rights reserved. SDI connects every link to reduce MRO TCO and improve operational uptime Leadingprovider with40+ yearsexperience deliveringservicesinNorthAmerica $300millioninspendmanagement with6,000+ suppliers End-to-endservice offeringincludes datamanagement and analytics, strategicsourcing, procurement topayment, storeroommanagement, andengineering services Servingcustomers inchemical, food&beverage,heavy industrials, pharmaceuticals, transportation,medical devices, andeducation 6
- 7. Copyright 2015 SDI, Inc. All rights reserved. Connecting MRO for leading companies: 7
- 8. 8 Data management & analytics Source-to-pay procurement process Receiving & storeroom operations Engineering Services 8 How to achieve maximum value from your MRO Supply Chain
- 9. Data Management & Analytics. - Reduce Consumption 10-15% Inventory MRO SKUs and location. Cleanse data to standardize parts catalog and set proper data taxonomy. Analyze SKU data for duplication and identify critical, existing and obsolete inventory SDiExchange cloud-based portal provides all transactional detail, reporting, analytics and inventory control Establish inventory forecasting methodology and set risk tolerances 9 Data Management & Analytics Source-to-Pay Process Receiving & Storeroom Operations Engineering Services
- 10. Source-to-Pay Process. - Reduce Processing Costs by Over 50% Six Sigma sourcing process in 40+ categories with 6000+ suppliers to achieve price savings. Design workflow and approval hierarchy Select strategic suppliers and establish PunchOut capabilities with each Paperless processing eliminates manual intervention and reduces processing error rates Shared Services model for greater control and leverage of our entire portfolio for more efficient, compliant buying operations. Significant reduction in AP processing costs, SDI becomes the single supplier, billing 2x per month 10 Data Management & Analytics Source-to-Pay Process Receiving & Storeroom Operations Engineering Services
- 11. Copyright 2015 SDI, Inc. All rights reserved. 11 Data Management & Analytics Source-to-Pay Process Receiving & Storeroom Operations Engineering Services Receiving & Storeroom Operations - Increase Productivity by 30% - Reduce Inventory 15-25% Deploy MRO expertise and storeroom SOP’s. determine best method to secure the storeroom Implement surrounding technologies to SDiExchange - bar coding, cycle counting, warranty and repair tracking, ERP interface, SDiMobile, vending and point of use. Deconstruct the SDI Best-in-Class assessment and develop a 12-month project plan to achieve BIC status Align storeroom functionality and the work order and planning process Set agreed to metrics to measure performance and service
- 12. Copyright 2015 SDI, Inc. All rights reserved. 12 Data Management & Analytics Source-to-Pay Process Receiving & Storeroom Operations Engineering Services Engineering Services Drive 8-10% Value Creation to the P&L Largest team of certified and licensed reliability engineers focused solely on MRO. Conduct data analytics, review process efficiencies, and identify cost improvement opportunities with your team. Pinpoint issues with equipment – repeat failures, unplanned downtime, costly or inefficient applications, longer life products, improved maintenance strategies Standardization, OEM commercialization and reverse engineering to increase product availability and/or life as well as reduce cost Initiate all savings and productivity improvement projects in SDiPowerSteering
- 13. Copyright 2015 SDI, Inc. All rights reserved. Parametric Google-likesearch engine Web-based,access fromanywhere PunchOutto key suppliers Electronic orderapprovalhierarchy Catalogandnon-catalogrequests Workflow Easy part-addprocess Robust onlinereporting Virtual warehouse Improves spendvisibility SDI Exchange : Custom Catalog, Order Processing & Inventory 13 Master Data Management Inventory Management Inventory Forecasting Budgetcontrols Order Status
- 14. Copyright 2015 SDI, Inc. All rights reserved. SDiExchange – Technology Specifically for MRO 14 SDiExchange eCatalog and eProcurement SDiTrack Warranty & Repair Tracking SDiMS $- $100 $200 $300 $400 $500 $600 $700 $800 1 3 5 7 9 11 13 15 17 19 21 23 Thousands Projected Inventory On-Hand Months Demand Forecasting SDiConnect Seamless SAP Interface SDiMobile Barcode and Electronic Signature SDiStoreroom Smartphone Application SDiVending Storeroom Automation and POU SDiPower Steering Project Management and Tracking
- 15. Copyright 2015 SDI, Inc. All rights reserved. Vending Solutions Every SDI vending solution is customized to the requirements Actual parts and usage Volume of daily transactions Level of inventory control requirements Size and layout of the facility Number of employees 15
- 16. Your MRO Connected Enterprise SDI connects, coordinates, optimizes & aligns every link in the chain, typically delivering up to 350% ROI to our clients. 16 Data Management & Analytics Source-to-Pay Process Receiving & Storeroom Operations Engineering Services 16
- 17. Copyright 2015 SDI, Inc. All rights reserved. Savings Opportunities & Productivity Improvements Masterdatamanagementandnewpartsregistration Spendvisibilityandanalytics Leveragedandconsistentpricing Compliancetocontractsandincreasedincentives Freightexpensereduction APprocessingreduction Productstandardization OEMconversionandreverseengineering Inventorymanagementandforecasting Inventoryreduction Warrantyandrepairtracking Laborcostreduction MaintenanceproductivityimprovementsleadingtoincreasedOEErates 17 Achieving Best in Class MRO and Storeroom Management Status The results:
- 18. Copyright 2015 SDI, Inc. All rights reserved. Next Steps 18 The path forward for MRO success. The process: Understandthechallengestobeovercome Sizeandscaletheproject Datashare Identifytheteaminvolvedandtheinternalprocessahead Selectplant(s)forsupplyChainAssessment Establishatimelineforcompletion TourSDI’sSharedServicesCenter Reportoutofassessment Agreeuponthesavingsmetricstobereported SDIpresentsfinalsolutiontotheMROteam Scopeimplementationandtimeline
- 19. Copyright 2015 SDI, Inc. All rights reserved. Next Steps MROData&Spend Sourcing&Procurement Systems&Technology Storeroom&Inventory Engineering&Maintenance Production&Operations Finance&Accounting 19 Align stakeholders to move forward with a comprehensive assessment. SDI diagnostic of your: The strength of this approach lies in its ability to reveal pain points and inefficiencies in the process, identify savings opportunities, drive departmental synergies and ensure sustainable performance improvement connecting the MRO supply chain to the needs of the business.
- 20. Copyright 2015 SDI, Inc. All rights reserved. MRO Total Cost of Ownership - Example 20 CATEGORY COST COMMENTS SDI IMPACT MRO MATERIAL SPEND $5,600,000 MRO & OEM, Stock & non-Stock 5-12% FREIGHT COST $448,000 Estimated at 8% 50-60% STOREROOM LABOR COST $156,000 Single shift, 2 FTE's, fully loaded 0-100% INVENTORY MANAGEMENT $952,000.00 Carrying cost 12%, 5% slippage 10-20% TECHNOLOGY $35,000 Inventory management system, not tied to CMMS 100% MRO SOURCING $132,000 OEM / Commercial, 2 FTE's 0-100% MRO PURCHASING $66,000 OEM / Commercial, 1 FTE 0-100% AP PROCESSING COSTS $241,758 Average voucher size $275, 20,350 processed, $11.88ea 80-100% MASTER DATA MANAGEMENT $0 No dedicated resources or formal process to manage N/A MAINTENANCE PRODUCTIVITY $333,432 Includes wait time, parts search, ordering 20-30% $7,964,190 11-23% Nearly 150% of Material Cost