Illustrative Case · Packaging
A representative composite based on patterns we see across comparable mid-market manufacturers. Figures are illustrative. No individual client is depicted.
Across MRO parts and maintenance services.
MRO stock cut from $9.6M to $6.8M.
Hours lost to missing parts fell from 410 to 150 a year.
Lower cost and better uptime at the same time, from one operational fix.
The situation
Spending more on spares and still running out.
Each of the three plants managed its own maintenance storeroom. Parts were reordered on instinct, stocked under different part numbers, and bought urgently whenever a line went down. Maintenance service contracts had been renewed for years without review.
The plants were carrying more inventory than ever, yet lines still stopped for missing parts. Operations saw it as a maintenance problem. Procurement saw it as a cost problem. It was both.
The diagnosis
Too much of the wrong stock, too little of the right.
The storerooms were full but poorly matched to what the lines actually needed. Duplicate part numbers hid the real stock position, so plants reordered parts they already had and missed the ones that mattered.
- 24% of MRO part numbers were duplicates of the same item under different descriptions.
- 31% of MRO orders were emergency purchases, typically at a 20% to 40% price premium.
- $9.6M of MRO inventory on hand, with about a third untouched in more than two years.
- Five maintenance service contracts had no performance terms and had not been rebid in over six years.
Every measure moved in the right direction at once. Lower inventory and fewer stockouts are not a trade off when the stock matches what the lines actually use.
What we did
Fix the storeroom, then fix the contracts.
We cleaned the parts catalog, reset stocking levels to actual usage and criticality, and rebid maintenance services with performance terms attached.
Operating flow
Mapped how parts moved from request to storeroom to line, and set min and max levels by criticality instead of habit.
Enabling technology
Cleaned and merged the parts catalog across three plants, so every item has one number and stock is visible network wide.
Adoption in practice
Gave maintenance planners a weekly stock review and a simple rule for emergency buys, so urgent orders became the exception again.
The outcome
Cheaper to run, and the lines stay up.
Cost
$4.3M in annual savings: $2.6M from consolidated MRO buying and fewer emergency premiums, $1.7M from rebid maintenance services.
Cash
Inventory fell from $9.6M to $6.8M through cross plant sharing and the disposal of obsolete stock, releasing $2.8M.
Uptime
Downtime caused by missing parts fell 63%, from 410 to 150 hours a year.
What made it stick
Rules the storeroom actually follows.
MRO savings usually disappear as soon as the next breakdown triggers a panic buy. Here, critical spares are set by criticality, emergency purchases need a reason code, and service suppliers are paid against uptime targets. The storeroom runs on rules, not memory.
Next step
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