 IESA
provides ConvaTec with a healthy outlook for MRO management
ConvaTec Limited is the UK division of the Bristol-Myers
Squibb Company, the world's leading manufacturer of ostomy care
and modern wound and skin care products. As a large-scale manufacturer,
the company invests heavily in goods and services for its maintenance,
repair & overhaul (MRO) functions but has historically received
little by way of management information on supplier performance,
unit cost pricing and MRO inventory. The lack of a formal purchase
control system had also resulted in a proliferation of suppliers
and a fragmentation of spend.
Looking to reduce the cost base of outsourced goods and services,
ConvaTec appointed Integrated Engineering Stores Associates (IESA)
to deliver a fully integrated system capable of consolidating spend
and suppliers, achieve price and service leverage, reduce the transaction
burden and provide accurate inventory monitoring.
 IESA’s
first move was to bring stock into a robust ERP system. Every item
in the stores was manually catalogued and coded and historic supply
data was established through analysis of the previous year’s
purchase and issue records. Using this ERP model, IESA built a detailed
profile of the site’s requirements, which was then developed
to accurately establish the supply agreements necessary to meet
the day-to-day demands of the site.
IESA also provided ConvaTec with a significant capital injection
to the balance sheet by purchasing the client’s whole MRO
inventory. IESA also guarantees that ConvaTec only pays for the
items it uses – thus taking on all inventory risk.
IESA has transformed ConvaTec’s order procedures. Volumes
have been cut, movements are accurately monitored and ConvaTec is
able to match supply to the true demands of the site.
ConvaTec has also witnessed a dramatic increase in the accuracy
of MRO management information. Stock control methods and invoice
management have been revolutionised almost overnight. By outsourcing
these processes, ConvaTec has removed the administrative burden
associated with more than 25,000 issues, receipts and invoices each
year. It now receives just one invoice per month from IESA, broken
down to the individual who has used the goods and analysed across
business units and cost centres.
Steve Lowkes, Engineering Manager for ConvaTec at Deeside, commented
on the project: “ConvaTec has enjoyed tremendous growth over
the last 20 years, but the controls in our engineering stores have
not kept pace. We considered reorganising this in-house, but with
IESA we have been able to bring in these improvements very rapidly
and cut out months of development work.”
IESA Chief Executive, Ben Caldwell said: “Our main objective
is to achieve better performance and lower prices in order to earn
profit for our clients. With ConvaTec we have been able to provide
solutions that achieve this in a relatively short period of time.
The next stage of development will see the roll-out of the on-line
web catalogue, making the stores visible across all ConvaTec sites,
together with a comprehensive MRO web resource containing over 70,000
products.”
For more information on ConvaTec visit:
http://www.convatec.co.uk |
