Information Management: Manufacturer tightens inventory control with turnkey RFID system
RFID-based portal delivers automatic tracking tool for greater accountability and less waste.
Ascend Performance Materials, a provider of chemicals, fibers and plastics, identified that greater controls were needed around tracking distributed inventory in and between its five U.S. manufacturing facilities. After installing RFID systems at choke points in the facilities, the company improved inventory management for maintenance, repair and overhaul (MRO) supplies.
Among other MRO supply chain concerns, the company was constrained by a lack of visibility into inventory on hand in its multiple remote storage rooms at each manufacturing site. Additionally, the replenishment process was completely manual, which required considerable time for employees.
The installation of the RFID portals and an inventory management system provides the company with real-time visibility into its inventory. Tom Barrett, director of global indirect procurement for Ascend, says the improvements have increased visibility and productivity.
“Our employees have access to what they need without having to spend time looking for parts or walking across the facility to retrieve them,” he says. “On top of that, because they are confident that the inventory will be there when they need it, they are taking smaller quantities out of the system. The private inventory stashes have virtually disappeared.”
Within a year, one location saved more than $80,000 with the biggest cost savings coming from item usage reduction and removal of obsolete inventory. Barrett says there is less need for transport to off-site storerooms, increased use of reconditioned items, a reduction in stock-outs and reduced purchase order needs.
After identifying and cataloguing $24 million of inventory from more than 170 remote storage locations, the company saw a 20% improvement in storeroom fill rates, a 19% reduction in overnight shipping costs and $1.3 million in savings recovered from closed work orders. The company is in the process of installing a second RFID system, which is expected to boost annual cost savings to nearly $250,000.
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