Weetabix signs a three year outsourcing contract
13 November 2008
Weetabix has signed a three year outsourcing contract with Eriks Integrated Solutions, a division of Eriks UK, to take control of its MRO (Maintenance Repair and Operations) procurement and stores operation at its Burton Latimer site in Northamptonshire.
Weetabix signs a three year outsourcing contract
Key tasks for Eriks on the site are that they take responsibility for the stores, reduce the time engineers spend sourcing products and ensure compliance with purchasing procedure, that they provide detailed information about how the maintenance budget is spent resulting in reduced MRO consumption with increased productivity.
Prior to its outsourcing contract with Eriks, Weetabix was aware of the improvements that could be made to its MRO operation centred on a large, traditionally run store administrated via a paper-based system. As Tony Lennon, Head of Purchasing for Weetabix said, “We were looking to achieve best practice in this area; for a more technical solution that allowed us to gain leverage in terms of MRO procurement but also considered the manpower element and the management of equipment obsolescence.”
Weetabix invited five companies to tender for the contract ranging from local suppliers to national distributors. However, Eriks ability to offer local knowledge and national coverage proved a winning combination. As Damian Magill, Chief Engineer at Weetabix said, “Eriks’ understanding of our business and our objectives was very clear and the company is well-rehearsed in delivering the solution we required.”
A major part of the solution has been the conversion of a building on the 75-acre Weetabix site, which had previously been used to house redundant equipment, with a new, 10, 000 item capacity, purpose-built store and new offices.
A second important element has been the way in which Eriks has addressed the personnel needed to run the operation. One of the Weetabix employees transferred to become an Eriks employee which as Damien Magill pointed out “was absolutely vital as this made knowledge transfer very easy and facilitated the integration of the new system with the engineers.” Eriks supported the promoted stores supervisor with a member of staff who’s function was to progress orders – a placer and chaser according to Paul Lynch from Eriks. In addition, a service centre manager from within the Eriks organisation was promoted from another site to be the manager of the Weetabix site.”
Thirdly, and most importantly the paper-based system for requisitioning engineering spares has been replaced by Eriks’ own paperless stores management software solution which, through the use of bar coding, enables the 9,500 stock items to be traced accurately through the system. The advantages of this software, developed in-house by Eriks, are not only the replacement of the paper system but the management information which can be gleaned from the data produced. For the first time Damien Magill has the information available to see which assets on the site are consuming the most spares. He said, “We now have regular information on what items are being taken from the stores by which person and to which factory. With this information we can make improvements in our processes through benchmarking how one asset performs against another for example.”
An added benefit to Weetabix is that by leveraging the enormous purchasing power of the Eriks Group it is able to reduce the purchase price of its MRO products, which, over the three years of the contract will lead to a significant saving in itself.
Having been in a place for a couple of months Tony Lennon believes the transition to the system has been seamless. Lennon said, “Previously, we put a great deal of effort into managing the MRO procurement, which was, compared to raw material procurement a relatively small spend. However, this new arrangement with Eriks sees us optimising our purchasing position in all markets while at the same time reducing our purchase price and administrative burden.”
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