Avoiding USD 1.1 million in MRO Spend While Protecting Factory Uptime
Overview
A global leader in premium drinks manufacturing partnered with Entec International to transform its approach to Maintenance, Repair and Operations (MRO). In a period of 6 months, by using advanced insights, analysis, and adaptive I.T., Entec International partnered with the manufacturer to avoid USD 1.1 million in unnecessary MRO spend (23% of planned expenditure), while still maintaining full-service levels and operational reliability. In total, the client would have spent USD 5.0 million on MRO, but actual spend was reduced to USD 3.9 million, releasing critical cash for growth initiatives.
The Challenge
The manufacturer was under pressure from cash flow constraints but needed to ensure reliable factory uptime. Excess inventory tied up millions in capital, while duplicated parts, inefficient procurement, and weak supplier terms were inflating costs. The leadership team recognised that capital tied up in excess MRO stock could have been redirected into growth projects but reducing it without the right controls risked leaving the business exposed.
The Solution
Entec International delivered a comprehensive 3PMRO Advantage solution, combining data-driven analysis with hands-on supply chain management.
Key Actions Delivered:
- Supplier Negotiation - Secured improved pricing and improved supplier loyalty, securing long term low pricing and cost avoidance of USD 377 thousand.
- Supplier Terms - Negotiated extended credit periods and improved return on capital employed avoiding USD 112 thousand of finance costs.
- Duplicate Control - Identified 793 duplicate SKUs over six months, eliminating waste and reducing procurement errors. This equated to an immediate reduction of USD 34 thousand in carrying costs.
- Purchase Avoidance - Prevented unapproved or duplicated orders, saving more than USD 123 thousand in six months.
- Inventory Reduction - Removed slow-moving and redundant stock, cutting cash in tied-up capital within six months across multiple sites and countries saving a further spend of USD 172 thousand.
- Shipping Consolidation - Streamlined logistics to reduce freight inefficiencies, unlocking USD 216 thousand in savings within six months.
- Duty Savings - Delivered a further USD 81 thousand in avoided costs through duty optimisation.
Results
Through Entec’s intervention, the customer was able to realise USD 1.1 million additional funds to spend on growth project, strengthening the client’s financial resilience and creating long-term value. Crucially, this cash avoidance was achieved while maintaining the same level of MRO service and ensuring factory uptime was never at risk.
Get in touch
Have questions or need more information about our solutions? We’re here to help. Whether you’re looking to optimise your MRO processes or explore tailored services for your business, our team is ready to assist. Click below to reach out through our contact form, and one of our specialists will get back to you promptly. Let’s work together to achieve your operational goals.