Anixter's Supply Chain Solutions Cut Costs Through Standardization and Consolidation
A leading engineering support services company
- Lack of consistent, meaningful data across business units
- Business units managing local and diverse MRO supply base
- £32 million of fragmented annual spend with 4,000 suppliers
- Vending, store management system and VMI
- Supplier management, part number consolidation and inventory management
- On-site support and guaranteed savings through P2P and the INNOV8 program created by Anixter
- Achieved and exceeded guaranteed savings
- Over three years, saved more than 15 percent through standardization and consolidation in spend
- Strong collaborative partnership with the customer
Uncovering Inefficiencies Across a Multisite Business
A leading engineering support services company that manages multiple sites on differing IT platforms was struggling to achieve consistency in their supply chain.
With several divisions and business units they wanted consistent supply, price and quality for all locations. To achieve this, they needed to streamline their processes, reduce suppliers, and improve quality control and inventory management. Additionally, they were looking for a step-change in MRO procurement behavior in order to deliver greater value, continuity of supply, improved MI and supplier rationalization.
Structuring a Consistent Supply Chain
Anixter offered the customer a solution that included vending solutions, a store management system and vendor-managed inventory. Through these solutions, we were able to provide cost control and allocation, reduction of walk-and-wait time, consumption control and full traceability.
We took on 40,000 product lines, including MRO, consumables, and welding and reduced the number of suppliers from 14 to one. We consolidated their part numbers to provide standardization and rationalization of product and price. Our inventory management allowed the customer to have stock available at all times, even with fluctuating demands.
We also offered on-site support, technical support and guaranteed savings to the business through P2P and the INNOV8 program, which enabled standardization, SKU reduction and continuous review of service and product to offer improvements and cost savings to the customer.
Cutting Costs Year After Year
With Anixter, the customer has just one supplier for a wide range of commodities and services. By working with each business unit and learning about the local customer needs, we were able to tailor our services to each unit and offer a consultative set of solutions to improve processes, procedures and focus on core competencies.
We guaranteed the customer specific savings in the first three years, including a very aggressive double-digit savings target in year one. We achieved those savings the first year and even exceeded them the following two years. In all, Anixter saved the customer over 15 percent in operational efficiencies and product cost improvements over three years through standardization and consolidation in spend across the group.