their point-of use. Grainger recommended
installing KeepStock Secure dispensing
machines to make PPE products more readily accessible to the nine different production areas in the facility and minimize the
number of trips to the main tool crib.
The Productivity Cost Of Inventory
Before the machines were installed, a
round trip to the tool crib averaged six to
eight minutes, and total foot traffic represented more than 20,000 annual trips. By
reducing foot traffic and employee travel
time, as well as allocating the time to scan,
deliver, and put away products to Grainger
resources, the manufacturer realized a 77
percent efficiency gain in processing time.
The KeepStock machines reduced inventory costs by moving PPE items to their
point of use, which was the program’s primary objective. However, as the data from
the machines was reviewed, the results
gave insight to more cost savings opportunities. The manufacturer created measurements to evaluate Weekly Costs, Item
Usage Cost by Employee, PPE Cost/Labor
Hour, Top SKU Spend, and Cost by Area.
Measure The Savings
For the first time, a baseline was estab-
lished to track individual use of PPE items.
Weekly consumption rates of PPE declined
significantly as employees used the vending
machines, resulting in a 32 percent reduction in the PPE cost per labor hour and an
annual savings of $150,000. In addition to
creating accountability among employees,
individual usage data provides a baseline
to effectively measure changes or quality
enhancements to the PPE the manufacturer
decides to supply for employees.
Exact item usage data, down to the specific area and individual using the item,
helps staff evaluate if the best product is
being used for each application on the production floor. For example, one employee
never realized the gloves he used multiple
times each day cost $40 a pair. One conversation and the results were immediate
— usage of the gloves fell into place with
the other production areas, resulting in
$10,000 in annual savings.
There is always something driving usage.
Sometimes there’s a perception that the
products are “free,” according to the facility’s Supply Chain Leader. As more data is
reviewed and opportunities are evaluated,
more cost savings will be realized by effectively managing the inventory on hand.
Manage Inventory To The Bottom Line
The best inventory management programs are supported by strong data. When
inventory usage data is properly evaluated
and used to make changes, businesses can
realize significant savings from every step
of the procurement process — from stocking and consumption to analyzing and measuring adjustments.
“Anybody can get you a dispensing
machine; it’s not about putting a bunch of
machines filled with products and resources in a plant just to get more revenue,” says
Robert Hammond, Grainger Consulting
Manager. “It’s the whole partnership:
what’s coming in, is it the best valued
product, who’s using it, how much is needed, what comes out, and why? It’s about
creating a continual cost savings strategy
for the long term.”
To learn more about inventory solutions,
Please note: Eligibility for KeepStock Store is
subject to certain qualifying criteria, might require
an on-site assessment to be conducted by Grainger’s
Consulting Services Group, and shall be subject to
written agreement on certain facility operation matters. Contact your Grainger Representative for more
information and details regarding availability.