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The savings aren't even the best part
It’s not unusual for a business to buy up to 70% of its spare or replacement machine parts from the original manufacturer or a single supplier. Which means it’s not unusual for them to pay higher prices, to wait longer for parts, and to put their production at risk through supply chain interruptions. That’s why a major pharmaceutical manufacturer invited ERIKS to look at reducing their parts inventory, improving their supplier network, and reducing costs. And the best part was the teamwork involved.
With an OnSite team in place, ERIKS already had a presence at the customer’s facility in Ireland. But this team had no involvement with the customer’s own stores or spares procurement. However, when the customer realised their OEM parts spending had reached an unacceptable level, ERIKS were invited to liaise with the customer’s own engineering spares team, to find the most effective way to make savings.
With the customer team’s in-depth knowledge of their procurement needs, and ERIKS’ strong supply network, the scene was set for a parts conversion project that would deliver not only parts, but savings and efficiencies too.
What’s in a name?
One way that original equipment manufacturers try to keep control of parts inventory is by providing only the most basic part descriptions and names. This makes it hard for customers to identify parts for sourcing from other suppliers.
So one of the first steps that ERIKS and the customer took together was to create a uniform parts description and part number process. With this information at their fingertips, anyone ordering parts could then be sure of identifying the correct part – and have the ability to shop around for the best price.
With maintenance and repairs keeping them quite busy enough, engineering teams don’t have the time or resources for parts shopping.
But with new descriptions and part numbers to hand, it’s easier for anyone to source parts. So at the customer’s request, ERIKS stepped up to provide support, by scouring their extensive bank of preferred suppliers for the right parts at the right price.
And if the ERIKS OnSite team felt there was an even better price out there, they could call on ERIKS Engineering in turn, or ultimately ERIKS Procurement, to get the best possible deal in the shortest possible time.
Ordered to order
Parts ordering and stores management are still very much the customer’s remit. But core parts are now more easily identifiable thanks to the name and number conversion process.
So ERIKS can ensure they are readily available on the ordering system for whenever a new part is required.
This enables the customer’s team to quickly and easily find the best price from a preferred supplier.
Meanwhile ERIKS OnSite team can hold high-risk and high-turnover items ready in stock, to shorten delivery times and help keep production rolling. With on-site space in short supply, ERIKS also hold extensive stocks at a local hub for fast delivery to the customer’s site when required.
More parts for less
The parts conversion process has helped savings and efficiencies to continue to grow for the customer.
With parts sourced at lower prices, and a reduced inventory, the customer’s total cost of ownership is lower. With shorter and more efficient supply chains, sustainability and reliability are improved, and the risks of downtime and lost production are minimised. And of course, the parts conversion project has helped to achieve the customer’s initial aim: to reduce capital expenditure and maintain it at a more acceptable level.
In the earliest days of working with the customer, ERIKS were supplying just 17 line items. However, from 2016 to the parts conversion being completed in 2024 the line item count increased to 524 offering an overall saving to the customer of €524,739.
So if anyone was ever in doubt about the power of partnership between the customer’s teams and ERIKS, they’ve definitely been converted by now.
For more information on ERIKS OnSite Solutions, contact your local ERIKS Service Centre, who will be happy to discuss your options.
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