Tata Steel UK saves £2 million on stores with Brammer 19 April 2013

Savings of more than £2 million are being reported by Tata Steel Europe, for its UK operations, following a nationwide inventory management project by industrial maintenance, repair and overhaul (MRO) specialist Brammer.

Chris Ditton, programme manager for stores transformation at Tata Steel, says that the acquisition of Corus by Tata Steel in 2007 was the catalyst for change, with Brammer being appointed to deliver MRO supply, inventory and value propositions associated with bearings and other engineered products.

He explains that TSE's decentralised UK MRO stores extended to more than 700,000 SKUs, due in part to multiple descriptions being used for the same item across different sites. Operatives were not always able to establish whether an item was in stock locally or at another location, leading to SKUs with a combined value of more than £400m.

Brammer began with an audit of each stores operation in a project lasting 4,000 man-hours. Focusing on bearings, the team viewed 26,000 SKUs and validated every item, selling or scrapping obsolete bearings, or those no longer fit for purpose.

The firm also identified 2,500 SKUs as being available within two to five working days – meaning that many did not need to be in stock.

"Our partnership with Brammer has so far delivered £2.2m of cost savings opportunities," confirms Ditton.

"However, due to the sheer scale of our UK operation, we estimate that in the last two years we've extracted only around 20% of potential cost savings," he continues.

"There's more to be done, but without Brammer's expertise we could not have come so far, so quickly. We now have a nationwide inventory management vision and strategic deployment, which will continue to identify and deliver savings, as well as increasing efficiency."

And Ditton adds that stores at the main Scunthorpe and Port Talbot hubs, which together accounted for 70% of inventory and spares spending, are now undergoing modernisation. Also, barcoding and real-time data management are now being rolled out across all sites.

Interestingly, he says that the process of stores transformation has also resulted in closer co-operation between engineering, procurement, stores and finance.

"TR=he results so far have been very encouraging," he says.

Brian Tinham

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Brammer UK

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