How to Minimize Your Manufacturing Floor Costs

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1 HOW TO SAVE MILLIONS IN INDIRECT INVENTORY You can t fix what you can t see. MSC INVENTORY MANAGEMENT FOR MRO & METALWORKING

2 Today s manufacturers have a big opportunity when it comes to indirect costs those unseen and unplanned costs every manufacturing floor faces such as excess inventory, lost productivity and expediting costs. That s because there is an estimated $145 billion of maintenance, repair and operations (MRO) inventory sitting hidden inside companies all over the U.S. Nearly 70% of it will never be used. That s $100 billion in waste. But it doesn t have to be this way. With the right tools, you can uncover your idle, non-working inventory costs to save time and money, and keep your operations up and running, and competitive.

3 We think of direct and indirect costs like the garage and attic of a house. Direct materials are like the garage. It s core to your operations, everyone sees it and it gets a lot of use every day. The industry cleaned the garage by squeezing costs out of those direct materials that go into your end product. Indirect materials are like the attic that hidden part of the house no one wants to think about. Like the attic, indirect materials can be overwhelming. They are important, but involve thousands of suppliers, millions of SKUs, and unpredictable and fragmented spend.

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5 To gain the visibility you need, you can: Look for time Use technology as your flashlight Get another set of eyes We help you gain visibility to take cost and complexity out of your supply chain to get the most value from your assets. You can develop lean processes for continuous improvement and can pump realized savings back into your business.

6 Line speed is up by 50%, tool use is down by 57%. Total savings are estimated at $335,000/year. OSMUNDSON MANUFACTURING CO.

7 Look for time. When you squeeze time out of your supply chain, you become leaner, more productive and more flexible. Leaner supply chains drive shorter lead times, faster speed to market and more new product introductions. All of this means faster time to profit and a flexible supply chain to manage dynamic customer demands. With MSC s ControlPoint Inventory Management solutions, you gain a clear view of what you have, where those items are in your operation, and how and when they re being used. Our team can suggest alternate tools or additional training to increase your return on investment. You save time, eliminate unnecessary work and overbuying, and can better manage consumption because individuals are accountable for what they use. You can also make sure critical items are available when they re needed without over-stocking items you don t need on hand.

8 Handheld scanning through vendor managed inventory, a vending solution and consolidating purchases make it easier to see and manage inventory. UNILEVER ICE CREAM DIVISION

9 Use technology as your flashlight. Technology can shine a light on your tooling and indirect materials so you can better see and manage the total cost of your inventory. Using technology will save you time and money from loading bar-coded package labels with information for easier tracking and order accuracy to online ordering and streamlined procurement. Our solutions generate easy-touse reports that allow you to see who is using what, when they re using it and where to build in accountability and help manage consumption. On average, our customers reduce consumption by 25% or more.

10 RESULTS Greatly improved productivity and profitability, and more than $170,000 savings in the production of tubes, button covers and linkage components making WSM more competitive They study our processes and pain points and with every tool they recommend and with every technical suggestion they make we trust them even more. John Condoleon PRESIDENT, WARREN SCREW MACHINE

11 Get another set of eyes. A good partner helps you see the bigger picture. When it comes to taming indirect costs, strong partnerships and productivity go hand in glove. We help you gain a clear view of your inventory by serving as an extension of your MRO supply chain and help keep it running smoothly, efficiently and cost-effectively. We get to know your business, review your practices and walk your production floors to recommend ways to shave time from your processes and drive breakthrough productivity improvements. Many tap MSC for our unparalleled metalworking expertise, depend on the product brands we carry, and take advantage of our quick delivery of more than 1 million products.

12 MSC DELIVERS

13 WITH EXPERIENCE, RESULTS

14 We help you take cost out of your production environment through best practices. We carry vast inventory so you don t have to and guarantee next-day delivery for just-in-time efficiency. We help you get to market faster because you are able to leverage our supply chain. We help you run a better business at a lower cost because we focus on the hidden costs and inventory management challenges of MRO and metalworking materials.

15 With ControlPoint Inventory Management solutions, we help you turn your supply chain into a competitive advantage. Continuously. We start with a Business Needs Analysis to understand your business and recommend ways to save time and streamline processes. We document projected savings. Because our experts come from the shop floor, we draw on our years of supply chain management experience and metalworking expertise to customize a solution for your business through one or a combination of: Vending to offer a clear view of your inventory supply chain. Easy-to-use reporting gives you the insight you need to monitor what s being used so you can run your business more efficiently with solutions that provide breakthrough productivity improvements, lower overall spend and better manage inventory levels to free up capital to invest in the business. Vendor Managed Inventory that cuts procurement time and ordering costs. From the production floor to the tool crib, you maintain full control of the ordering process and your spending levels. We are on site regularly to keep your inventory levels in check and to conduct scans to replace inventory, as needed. Customer Managed Inventory that lets you take control of replenishing commonly used MRO and metalworking items electronically by scanning parts yourself and ordering online 24x7. eprocurement to help you cut costs and become more productive by doing business electronically. Inventory Management Software that is our standalone crib management software to track inventory levels as well as incoming and outgoing product from the crib to the plant floor. Onsite Services where, when appropriate, we place associates on site to manage inventory for the customer, and in some instances, provide an onsite store.

16 Inventory Management Based on more than 70 years of experience, we understand MRO supply chains and how to use them effectively. We ll help you tame your indirect costs to keep your operations up and running, costeffective and competitive. We back our work with experienced technical support and more than 1 million items. To start driving productivity and cost savings today, please call us at or visit us at mscdirect.com/controlpoint.