Mining Operator Achieves 23% Inventory Reduction with Zero Reliability Risk
Despite massive working capital tied up in inventory, a major mining operator struggled with material records that lacked reliability and significant data fragmentation.
Pain Points
400K+ MRO Material Records, $67M Inventory Value
- Inventory Hoarding
- High Non-Moving Stock
- Inflated Maintenance Costs
- Unplanned Downtime Risk
- Audit & Compliance Risk
- Poor Data Visibility
- The Solution
- Audit & Compliance Risk
- Poor Data Visibility
- The Solution
Solution
- Inventory Optimization Framework: Ensuring the right stock, right location, right time, and right cost with controlled working capital.
- Strategic Material Criticality Framework: Aligning spare availability and reliability with business impact using data maturity assessment and industry algorithms.
- Enterprise Master Data Management: Establishing a Single Source of Truth by identifying and eliminating duplicates to sustain optimized stock.
Step 1: Data Foundation
What Happens
- 10,000 duplicates eliminated
- 40,000 MRO records consolidated
- Single Source of Truth created
Business Impact
- 16.6% Cost Reduction
- $11.1 Mn Unlocked
Step 2: Inventory Intelligence
What Happens
- $67M inventory analyzed 40,000
- MCR, ABC, XYZ, VED applied
- 25K materials optimized (Min/Max, ROP, Safety Stock)
- $20M non-moving identified
Business Impact
- + 16.6% Cost Reduction
- $11.1 Mn Unlocked
Step 3: Procurement Optimization
What Happens
- Contract compliance: 60% → 80%
- $32.6M spend optimized
- 30% of MRO moved to JIT / VMI
Business Impact
- 10% Savings
- $3.2M Saved
Step 4: Warehouse Optimization
What Happens
- Replenishment aligned to usage
- Shelf-life & packaging optimized
- Storage & bin management redesigned
Business Impact
- 23% Reduction (Y1)
- $11.1 Mn Unlocked More (Y2) $20.1M Saved
BUSINESS VALUE
- $35M+ Total Cost Reduction
- Across Inventory
- MRO
- Procurement & Warehousing
