Systems to cut the cost of spares management

Cost savings on engineering spare parts far greater than those possible from screwing down OEM suppliers or distributors, or using MRO (maintenance, repair, overhaul) web exchanges, are being promised by SparesFinder. The company, which set up in the UK five years ago but has now developed a portal-based data cleaning and parts classification and management system that integrates with SAP, reckons it can save users sums 10 times greater – by tapping into their existing distributed inventories. Roger Hutton, SparesFinder CEO, says large manufacturers with multiple sites and similar operations should take note because they will inevitably have built up duplicates and legacy parts across the sites, but can’t see them on their ERP systems. “Rather than them buying more new spares when they’re needed from whatever source, we can help them source the parts from their own warehouses wherever they are,” says Hutton. “We can save them 100% of the cost, apart from the logistics of moving them, particularly if, as so often happens, other sites that have the parts are no longer using the relevant machines anyway.” SparesFinder’s key offering is a web-based parts data cleaning system founded on the firm’s own muti-language, multi-attribute parts classification and search engine. That helps users to first capture and wash their parts databases, wherever they are and on whatever systems. Dubbed Masterpiece, and the result of considerable development work with a global tobacco manufacturer under an ongoing $1m contract covering 1.3m line items, that software is starting to prove attractive. “It increases the value of a global manufacturer’s ERP system down at the asset management level, encourages use of the system and ultimately saves them a lot of money,” says Hutton. Currently, SparesFinder does the initial data loading and cleaning, leaving users then to add specialist knowledge on an ongoing priority and value basis, with engineers getting onto the system via their web browsers. To give an idea of cost, that system is currently in use at a European pulp and paper company with seven sites and 220,000 MRO line items, and price for that project was around £150,000. “They’re tackling their top 40,000 line items by value in the first three months, then another 60,000 over the remainder of the first year, and working on the rest over the next five years to remove duplication and what will have become obsolete rubbish. “Once that work has been done they’ll be able to move up to our Insight analysis and reporting tool to consolidate their MRO safety stock management and procurement.” Taking it further Hutton expects the firm, and others like it, to move up to the top level, with its InSource tool. That software integrates with SAP, sitting between MRO purchase requests and procurement, and trapping items above a threshold value, comparing against global holdings and recommending parts transfers between sites where rules-based logistics permits. For higher value items, it mandates investigation of an internal parts movement. The tool also links through to supplier catalogues and provides automatic updates to facilitate new parts procurement when that is necessary. The same tool can be used to optimise MRO parts holding locations, for example, ensuring that where one site is no longer using the machinery for which the parts were acquired, they can be shipped to where they’re needed for management locally. The bottom line: the potential to reduce overall MRO safety stocks and hold them wherever makes most sense against value and usage. Currently, the software and service is aimed at large multi-nationals, but it has been taken up by informal groups of manufacturers, notably the oil and gas industry in Aberdeen. The issues there are, will plant managers be satisfied with spares that might have been languishing in the corner of a parts warehouse for five years, and will purchasing departments readily open up already rationalised approved suppliers lists? .