Case Study – Mine products processing company
A major producer of metal ore had a mine including the plant that converts the raw ore into the product that is shipped to metal plants worldwide. The operation runs 7/24/365. Spare parts for the plant had originally been stored in a central warehouse. In the last 20 years, the responsibility for ordering and storing parts had shifted to the operating departments. The extent, value and usability of the material outside the warehouse were unknown. The parts still in the warehouse had not been converted to the current corporate numbering system nor had an inventory been taken in more than five years.
Our staff members were engaged to develop a master plan for re-consolidating spare parts inventory, project storage and handling requirements, develop a new layout to increase the warehouse capacity and design and prepare specification for tracking the inventory
Approach and Methodology
After studying the existing operation, including the parts stored in the plant and the available storage areas, the team determined that at a minimum the company needed to undertake a program to scrap unusable parts, consolidate the usable spare in the warehouse after increasing the capacity by more than 1/3 and return excess but usable product to vendors wherever possible.
Working with department managers, vendors and temporary staff drawn from retired workers, a plan was developed and implemented to determine what parts where non-emergency or rarely needed items, determine the item identification for those items and apply barcode tags to all material that will be stored in the warehouse. Vendor support for bar coding of new purchase was arranged.
Although still in progress, initial information is that purchase or parts are being reduced as the departmental inventories are consolidated and made available to the plant. The full impact of bar code identification has yet to be realized. The increased storage capacity of the new warehouse layout and bar coded location identification is allowing an inventory to be taken with high levels of accuracy. The concept has been expanded to all corporate production location.