Renaissance Hotel – Seattle May 3, 2007
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Transcript of Renaissance Hotel – Seattle May 3, 2007
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Presented by: Pat Thoms, Platte River Power Authority
& Jim Calvert, I.M.A. Ltd.
Renaissance Hotel – Seattle
May 3, 2007
APPAAmerican Public Power Association
Identifying Savings
Within
Maintenance Stores Inventory
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APPAAmerican Public Power AssociationAgenda
Maintenance Inventory Facts
Benefits Realized from Clean Data
Return on Investment (ROI)
NorskeCanada Case Study
Platte River Case Study Open Discussion
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Maintenance Inventory Facts
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APPAAmerican Public Power Association
Maintenance Inventory Facts
• 10%-20% Excess-Active Inventories exist -- “A” items overstocked
• Active Inventory Value
is typically a 1:1 ratio Annual Spend
:
• Inactive/Obsolete (Emotional Inventory) represents at least 38%-40% of Inventory Value
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APPAAmerican Public Power Association
Maintenance Inventory Facts
• Duplicate Items exist:@ 10%-20% per Single plant@ 20%+ across Multi-plant corporations
• Industry Standards suggest that Spot Buy/Direct Purchases represent up to 30% of Annual Spend
• Spot Buys/Direct Purchases usually incorporate a 10% premium over unit cost
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Inventory Segmentation
Electrical 26%
Required Active 27%
Inactive 53%
Excess Active 20%
Critical Spares 15%
Slow Moving Stock 22%
Obsolete Materials
16%
Bearings 21%
Fluid Power 15%
Instrumentation 12% P.V.F.
12%
Electrical 26%
Ind. Supplies 14%
OEM 40% MRO
60%
APPAAmerican Public Power Association
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Benefits Realized from Clean Data
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APPAAmerican Public Power Association
Benefits Realized from Clean Data
• User-friendly data for everyone (Maintenance, Stores, Procurement)
• Opportunity to Standardize on Manufacturers/Products
• Potential to Consolidate the Vendor base/Leverage Unit Cost
• Opportunity to Reduce Inventory Investment and Free up Cash
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APPAAmerican Public Power Association
Opportunity to Identify and eliminate duplicate items
Complete, generic item descriptions (McMaster-Carr, Grainger)
Consistent structure & nomenclature throughout the database
Benefits Realized from Clean Data
“Virtual” warehouse of inventory across the corporation (Corporate Catalog)
Opportunity to Share Critical parts, Spares, etc.
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Return on Investment (ROI)
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APPAAmerican Public Power Association
• Virtually Every Project Requires ROI Support
• Companies Require 6-12 Month ROI to Justify Spend
• Companies are Required to Invest Time & Resources to the Recovery Process
― I.M.A. can Work with Suppliers re Disbursement of Overstock
― Internal Experienced Resources are also Necessary― Address items lacking proper information― Adjust min/max stocking levels― Identify obsolete parts
Return on Investment (ROI)
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APPAAmerican Public Power Association
Return on Investment (ROI)
Sample Client Data:
15,000-40,000 sku’s per plantNo Single Corporate MRO CatalogCorporate Supply Agreements
• Multi-site client (7 plants)• > 240,000 total sku’s
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APPAAmerican Public Power Association
Return on Investment (ROI)
Single Site Data:
• 17,671 sku’s• $11,623,737 Total Inventory Value
68% of inventory is inactive32% is active
(valued at $3,719,596)
Annual spend value $3,599,887 (1:1 ratio)
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APPAAmerican Public Power Association
Return on Investment (ROI)
Single Site Data:
13% of inventory has excessive on-hand quantities
Value of the Excess is $911,113(24% of active inventory)
Eliminate duplicates
Return parts to vendor for credit
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APPAAmerican Public Power Association
Return on Investment (ROI)
Single Site Data:
299 MRO vendors• Bearings & PT = 28• Electrical = 97• PVF = 30• Air, Hydraulics, Fluid Power = 111• Industrial Supplies = 61• Mobil Equipment = 5• Instrumentation = 75
3,762 annual purchase orders generatedSpot Buy purchases @ 12% = $431,986
Leverage purchase volumes within/across sites
Consolidate product lines
Reduce Supplier base
Reduce Spot Buy purchases
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APPAAmerican Public Power Association
Return on Investment (ROI)
Single Site Data:
• Project cost: ~$90,000
• Savings: >$911,113
minimum ROI is 10:1
• Similar savings are found at each site across the company
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APPAAmerican Public Power Association
I.M.A. Value Proposition:
• We help companies seize control over their MRO inventory. Our services consistently generate a greater than 10:1 return on investment and improve maintenance efficiency.
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APPAAmerican Public Power AssociationI.M.A. Services
Catalog Management
Cleansing Analysis
ROI Facilitation
The Total
Solution
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Platte River Power Authority (PRPA)Case Study
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APPAAmerican Public Power Association
Platte River Case Study
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APPAAmerican Public Power Association
Platte River Case Study
Why the Need? PRPA was in search of new Maintenance
Management System ― Old system had 26 characters for part
description (+ long description field)
― Descriptions were inconsistent (20 years of different employees entering items)
― Maintenance was having a hard time finding parts they needed for a job
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APPAAmerican Public Power Association
Platte River Case Study
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APPAAmerican Public Power Association
Platte River Case Study
What We Did
Core team considered 6 systems
― Soon short listed to 3 --- presentations
Purchasing/Inventory/AP modules not included in initial plans
― But, why buy the puzzle when 3 key pieces were missing?
scope changed
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APPAAmerican Public Power Association
Platte River Case Study
What We Did
Avantis system selected― Avantis offered the option for cleansing
inventory parts (I.M.A. Ltd.)
― System had >200 character description, ability to attach drawings, pictures, etc. to items
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APPAAmerican Public Power Association
Platte River Case Study
What We Did
Up-front cleaning on our own― Populated missing manufacturer names
― Corrected spelling mistakes, dashes, hyphens, etc.
― Cleaned up vendor names
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APPAAmerican Public Power Association
Platte River Case Study
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APPAAmerican Public Power Association
Platte River Case Study
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APPAAmerican Public Power Association
Platte River Case Study
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APPAAmerican Public Power Association
Platte River Case Study
What We Did
For Data Cleansing, we worked with I.M.A. Ltd.
― 9,232 sku’s
― Submitted 2 reports:
― on-hand inventory
― vendor purchase history (4 years)
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APPAAmerican Public Power Association
Platte River Case Study
Results Cleansed data was loaded into our system
― Awesome new descriptions
― Now parts can easily be found
― Low duplicate part ratio (<1%)
New Avantis system allows drawings and pictures to be attached to item, which really helps planners
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APPAAmerican Public Power Association
Platte River Case Study
Before & After Samples:
BEARING, TAPER ROLLDescription
Mfg P/N
TIMKENMfg Name
203957Item #
1000005Control #
BEARING, CONE/CUP, TAPERED ROLLER, CONE P/N HM807049, CUP P/N HM807010
Description
Mfg P/N
TIMKENMfg Name
203957Item #
Before After
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APPAAmerican Public Power Association
Platte River Case Study
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APPAAmerican Public Power Association
Platte River Case Study
Before & After Samples:
BEARING, TAIL PULLEYDescription
Mfg P/N
FAFNIRMfg Name
209784Item #
1000005Control #
BEARING, BALL, 1.7717” ID X 3.3465” OD X 1.0629” WD SINGLE ROW, CONRAD, 2 SEALS, WIDE RACE, TAIL PULLEY
Description
209KRR3Mfg P/N
FAFNIRMfg Name
209784Item #
Before After
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APPAAmerican Public Power Association
Platte River Case Study
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APPAAmerican Public Power Association
Platte River Case Study
Before & After Samples:
SWITCH LIMIT OIL TIGHT NEMA 4/13
Description
Mfg P/N
ALLEN BRADLEYMfg Name
208859Item #
1010092Control #
SWITCH, LIMIT, LEVER SPRING RETURN 600V 550/600VDC 10A AC 0.1A DC 2NO 2NC NEMA 4/13 SERIES F
Description
1747-L531Mfg P/N
ALLEN BRADLEYMfg Name
208859Item #
Before After
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APPAAmerican Public Power Association
Platte River Case Study
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APPAAmerican Public Power Association
Platte River Case Study
Before & After Samples:
ALLEN BRADLEY PROCESSOR
Description
Mfg P/N
ALLEN BRADLEYMfg Name
300292Item #
1000148Control #
PROCESSOR, SLC 5/03 4096 INPUT 4096 OUTPUT 500MA @ 5VDC 175MA @ 24VDC 8K MEMORY
Description
802T-ATPMfg P/N
ALLEN-BRADLEYMfg Name
300292Item #
Before After
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APPAAmerican Public Power Association
Platte River Case Study
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APPAAmerican Public Power Association
Platte River Case Study
Before & After Samples: Duplicates
GASKET 2 X 2 1/2 X 1/32Description
1E5629X0072Mfg P/N
FISHERMfg Name
203700Item #
1008561Control #
GASKET, 2” ID X 2-1/2” OD X 1/32” THK
Description
IE569X0072Mfg P/N
FISHER CONTROLSMfg Name
203700Item #
Control #
GASKET, 2 X 2 1/2 X 1/32Description
IE569X0072Mfg P/N
Mfg Name
207015Item #
1008561Control #
GASKET, 2” ID X 2-1/2” OD X 1/32” THK
Description
IE569X0072Mfg P/N
FISHER CONTROLSMfg Name
207015Item #
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Open Discussion
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APPAAmerican Public Power Association
Thank-you for this opportunity
& for your time!