Halliburton – Vendor Managed Inventory
Submitted by Halliburton
Impact
The average consumable spend per workshop hour Dec-14 to Jan-15 was £2.04 per hour.
The average consumable spend per workshop hour in Jan to Mar-16 spend was 81p per hour (i.e a 60% reduction in consumable cost per workshop hour)
Not included in the above figures are the saving and reductions that Vendor Managed Inventory (VMI) machine provides in the following:
- inventory stock holding (releases working capital);
- saves admin/processing time on: raising purchase requisitions/purchase orders, goods receipt, storage/counting, goods issuing; and most importantly,
- saves the workshop technicians time in them walking to the stores to ask for basic consumables.
Description of Best Practice
A VMI machine was installed and became operational within one of Halliburton’s workshops in Aberdeen in March 2015. These machines hold fast moving consumable workshop items such as PPE, abrasives, glues, tape, aerosols, etc, and allow technicians controlled access to withdraw these goods straight from the machines instead of the traditional trips to stores or raising requisitions. Not only do these machines save the technicians time but they avoid the entire requisition/purchasing/invoice processing effort/costs involved with traditional sourcing as the contents remain the property of the supplier until used. The machines are connected directly to the internet and send stock usage info to the vendor’s office 3 times daily so that replenishment (against min/max levels) can be planned multiple days weekly as required. Monthly billing and online interface simplify administration while allowing detailed reviews of usage patterns. Swipe card security, touch screen and photo catalogue interface makes average “picking time” circa 15 seconds.
The VMI machines are supplied free of charge by the vendor and set-up costs are very minimal (electrical power and a native internet connection) and the machines are reconfigurable and can be relocated.
The usage of the machines is monitored and weekly and monthly usage reports are automatically e-mailed to facility supervisors and materials for review – supervisors were easily able to identify unusual or excessive use and challenge individuals.
Contact: John Suggett
john.suggett@halliburton.com
