In an uncertain economy, the pressure to save costs wherever possible weights heavy on manufacturing employees. However, they do not need to figure out when and where to cut costs within their manufacturing plants alone. Here is how a Fortune 500 automotive company saved over 70% on indirect material and MRO costs with the help of AH Group.
Scenario
A Fortune 500 automotive company wanted to ensure its team could achieve corporate financial goals in an unpredictable economy. With looming threats of a recession, the automotive company needed to prepare for consumer spending on new vehicles to slow. This meant finding creative ways to save on the costs of manufacturing new vehicles in order to continually hit profit margins.
Objective
The automotive company’s team found potential cost savings within the maintenance sector of their manufacturing plants. However, unlocking this savings while maintaining efficiency in the manufacturing of vehicles would not be a simple task. While there may have been opportunity for savings, the company did not want to change the maintenance portion of their manufacturing process too much, as that would mean taking time away from manufacturing productivity to train staff on new procedures. They had to find a way to save on plant maintenance costs without sacrificing productivity.
Initiative
Enter AH Group, the automotive company’s new partner for MRO Repair & Warranty services. The automotive company began using AH Group first for MRO Repair and Warranty Management help. AH Group began working with the automotive company by providing them an on-site representative in each of their plants to help teach plant staff about processes and facilitate repair services. The AH Group team leveraged our network of 3,000+ repair suppliers and economies of scale to help the automotive company repair more failed components than ever before at AH Group’s preferred pricing.
AH group was also able to introduce best-in-class data collection and reporting services to the picture. By beginning to collect data on activity within the company’s plants, the automotive company’s corporate teams were able to gain a high-level understanding of their production process across plants. By encouraging all failed MRO and machinery components to come through AH Group’s process and team, AH Group was also able to help the automotive company recover over two million dollars annually through warranties on items that had failed prematurely and within the warranty periods. This helped them uncover hidden opportunities to save even more than they originally anticipated through repair.
Result
Because of AH Group’s on-site representatives, vast network of repair partners, and data services, the automotive company was able to save over 70% in maintenance costs in one year. The automotive company’s staff was able to easily adapt to repair processes with the help of their on-site representative, allowing them to fully utilize our repair network and repair more parts than ever. The company’s corporate purchasing team was also able to uncover additional cost savings opportunities through our data collection, analytics, and reporting services.
Curious to explore how AH Group can make the most of your maintenance budgets? Reach out to us at info@ahgroupna.com and discover the untapped cost saving opportunities within your manufacturing sites.