Rail Spares – Process Review Case Study

We are Supply Chain and Logistics Consultants who have been in business for over 25 years and have a very successful track record and a high rate of repeat business.

The Project

Review the on site storage of spare parts process on a national basis, with a view to implementing best practice across the 5 national regions.

Background

Split into a number of regions, the procurement of spares was carried out centrally. However once the parts were delivered into individual regions and sites, the process was both fragmented and inconsistent. Given the difference in scale of the materials stored, this created severe shortages in capacity, leading to stock shortages & increased costs.  The aim was to review and create a common process that delivered both improved performance and service levels. As a consequence of improved control, cost and stock levels would be reduced greatly.

Activities

The activity started with a full process review of the supply chain and its various components. This ranged from large internal manufacturing supply, to external 3rd party suppliers and even on site manufacture of civil engineering structures and concrete fabrication.

Purchasing trends and processes were investigated and the demand requirements across the different regions were compared. Evaluation of the transport costs formed part of this investigation.

Regional storage facilities and the affiliated trackside locations were visited to understand how the final materials were handled, stored and finally installed. This final part of the review looked at stock turn, availability and accuracy. Having the correct materials available in line with trackside ‘possession’ was critical to the success of the installation in the time allowed.

Outputs and Results

  • Created a logistics structure with resource specifically responsible for the movement, warehousing & accuracy of stock & materials. This was funded by consolidating the existing functionality into one central team, thus saving resource across several different teams in several different regions.
  • Reduction in stock loss and re orders overall of 12% annually.
  • Streamlined logistics contracts with preferred national carriers producing cost savings of 16% annually.
  • Created a single process & works manual for all regions resulting in best practice being adopted nationally.
  • Created a common set of metrics to measure both internal & external performance on a monthly basis. This was adopted at board level as a true business KPI & used as a key driver within the continuous improvement department.
  • Rolled out fully the recently implemented company ERP system to include warehousing and materials control.
  • Installation downtime on trackside possessions was reduced due to the increased availability of spares & materials.

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