Case Study

"eRPortal has helped Savage Arms reduce on hand parts and MRO inventory by 23%--we run a more efficient Parts Management System, with fewer people."

Al Kasper, President and COO, Savage Arms

Focus on

Manufacturing

Customer

Savage Arms, Inc.

Company Profile

Founded in 1894, the history of Savage Arms has been one of innovation, value, and industry-leading accuracy. In 2003, Savage Arms introduced the revolutionary AccuTrigger®, which established a higher standard by which to judge all other factory triggers. While the innovation has continued in 2004, so has the Company’s growth. With two manufacturing facilities, one in Westfield, MA and the other in Canada, Savage Arms has experienced in an increase in revenue of nearly 70 percent over the past five years.

Issue

To support production, Savage Arms needs to keep on hand a huge array of MRO (materials, repair, and operations) supplies to meet the needs of its manufacturing process. As production increases, so does the variety, volume, and number of locations of MRO/Parts supplies. The Company had found that it was allocating too many man-hours to the management of these materials. Savage’s spending is in the millions of dollars on MRO supplies annually, and their process was out of control.

Challenge

To improve controls and modernize the management of Parts Supplies, Tool Crib and MRO inventory processes.

Solution

Built with a robust SQL Server engine, eRPortal ToolCrib and MRO Materials Manager was chosen to provide an automated and integrated solution for Parts and MRO goods management. With serialization and bar code technology, every tool, spare part, and inventory item was recorded into the system, enabling automated cycle counts at scheduled intervals or on demand. Min/max inventory levels were set to help insure appropriate on-hand quantities, while reducing excess inventory. Standard reports, such as Min/Max, Item Reorder and Usage Reports were also configured to provide regular and consistent information on MRO goods inventory levels and costs and usage allocation.

eRPortal’s consignment inventory feature, which enables consigned inventory to appear as on-hand inventory from a user standpoint was also configured. This feature enables Savage Arms to internally manage consigned inventory while reducing costs with negotiated consignments rates.

Results

• Improved Control. With improved inventory visibility and reporting, management could easily monitor usage. Savage was immediately able to realize a 40% drop in consumable items use. The usage of loaner tools is more effectively tracked, and Savage has dramatically reduced stock-out occurrences due to more accurate, and real-time, inventory information.
• Reduction in MRO inventory. Since eRPortal’s installation, Tool Crib and MRO inventory as a percentage of overall production has decreased by 23%.
• Reduction in the cost of managing supplies. Savage Arms reduced the number of people required to manage its tools, parts, and MRO by three (3 full time staff) and reduced manpower in Purchasing by one-half (1/2 full time staff).
• Savings from consignment inventory. Savage Arms has begun to realize savings in MRO expense of between 15-25% on its consigned inventory. The Company plans to expand its consignment inventory program with its vendors.