Case study - Vendor managed inventory
Leading international airlines provider
- Flying over 5 million passengers a year on over 100 routes
- A fleet of 90 aircraft
- Legacy long-term supplier; unit costs included rental of vending equipment > 5 years old
- Introduce an effective Supplier Relationship Management strategy to create a solution without access to a Capex budget
- Detailed analysis of consumption to review stockholding, determine design of new vend solution.
- Ownership of vend solution passed to Airline at end of 3 year contract, removing link between solution and supplier
- 3 year contract, introduced new solution, 5-day on-site support and 23% savings on £400k pa spend
- Significantly enhanced data reporting to improve analysis by individual job number and 3rd party recharges
- Significant improvement in cost avoidance through behavioural change; increased traceability, visibility of use by individual engineer
- 2 year contract extension negotiated to extend vend solution to address CAA audit finding and improve shop-floor productivity
- Facilitated internal process workshop to remove customer-driven costs, enabling the supplier to increase their investment in the account and hold pricing at contract renewal.
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