MRO Spares Consulting Services
The Pinnacle team can help your organization lower spares inventory while increasing cash flow, profit and reliability. With over 35 years of experience in developing, implementing and managing supply chain functions, the Pinnacle team can design a plan for your organization that will have a significant impact on your bottom line.
The Importance of Being Cost-Efficient
The increase in global competition is driving companies to focus on cost leadership as one of the key strategic enablers for achieving and maintaining a competitive advantage. Optimization and overall reduction of MRO spares is a significant cost-reducing opportunity that has been largely neglected, partly due to the fact that reducing levels of MRO spares is generally thought to have a negative impact on reliability. Thus, many times, the corresponding trade off is to accept a much higher spares cost.
Typical Findings
Research shows that in a typical plant 25 to 35 percent of the spares in stock are unnecessary. Moreover, on average, 50 to 70 percent of stocked spares have not been used in three years or more. The carrying cost alone, which can run as high as 35 percent, may be the difference between a profitable plant and a plant that is simply not cost-competitive under certain business conditions.
Our Strategy
After an analysis of your organization’s current processes, Pinnacle's team of optimization experts can customize a strategic approach to MRO Spares Inventory Optimization that is consistent with your overall strategy to achieve cost leadership and improve asset reliability.
Success Stories
The implementation of a MRO strategy for one company produced the following results:
- Eliminated 60 percent of the number of operating supplies from inventory
- Reduced cost by $13 million per year
- Reduced number of suppliers by 70 percent
Another company experienced cost reduction in excess of 76 percent and inventory reduction of 1400 percent after implementing a standardization strategy that was developed after an analysis of their current processes and practices.
