An extensive nationwide inventory management project by Brammer, the UK’s leading distributor of industrial maintenance, repair and overhaul (MRO) products and services, has delivered more than £2 million in cost savings for Tata Steel Europe, the pioneering global steel company.
The acquisition of Corus by Tata Steel in 2007 was the catalyst for significant change within Tata Steel Europe’s (TSE) UK stores operations as part of the adoption of an integrated manufacturing strategy. With 20 production sites across the UK, including two major manufacturing hubs in Port Talbot and Scunthorpe, it was felt that standardised stores processes could deliver both time and cost savings for all sites. Brammer was appointed to deliver MRO supply, inventory and value creation propositions associated with bearings and other engineered products, based on its ability to deliver cost savings and the quality of its service.
TSE’s decentralised UK MRO stores management had high inventory levels, in excess of 700,000 SKUs, due in part to multiple descriptions being used for the same item across different sites. Employees were therefore not always able to establish whether an item was in stock locally or at another location, leading to unnecessary ordering and SKUs with a combined value of more than £400m, and variable stock accuracy.
In reviewing TSE’s stores, Brammer began with a full audit of each existing stores operation in a project lasting 4,000 man-hours. Focusing on bearings, the team viewed 26,000 SKUs and validated every item with a clear description, selling or scrapping obsolete bearings, or those no longer fit for purpose. Brammer also identified 2,500 SKUs as being available within 2-5 working days – meaning that many items did not necessarily have to be kept in stock.
Chris Ditton, Programme Manager – Stores Transformation at Tata Steel, explained: “Our partnership with Brammer has so far delivered £2.2m of cost savings opportunities. However, due to the sheer scale of our UK operation, we estimate that in the last two years we’ve extracted only around 20% of potential cost savings.
“There’s more to be done, but without Brammer’s expertise we could not have come so far, so quickly. We now have a nationwide Inventory Management vision and strategic deployment which will continue to identify and deliver savings, as well as increasing efficiency.”
Peter Dean, Brammer Key Account Manager for TSE UK said: “Following the exhaustive audit, the Brammer team implemented centralised master data management to minimise confusion and duplication within stores at TSE’s UK plants. The customer-led vendor consolidation also ensured the best price and correct specification of each item ordered.”
Chris Ditton added: “Stores within the main hubs at Scunthorpe and Port Talbot, which together accounted for 70% of inventory and spend on spares, are now undergoing considerable modernisation, while across all sites barcoding and real-time data management are being rolled out. The process of stores transformation has also resulted in closer co-operation and alignment between the engineering, procurement, stores and finance departments within TSE, and the results so far have been very encouraging.”
source: Brammer UK
