From good to great - ERIKS and Aylesford Newsprint sign integrated supply deal

MRO Outsourcing

As part of a major reorganisation across its business, Aylesford Newsprint wanted to improve the performance of its MRO (Maintenance, Repair and Operations) stores. ERIKS Integrated Solutions, a division of ERIKS UK, has been chosen as the partner for an integrated supply contract which will take the MRO procurement and stores management from good to great.

Based near Maidstone in Kent, Aylesford Newsprint is a manufacturer of premium quality newsprint. The maintenance and engineering practices at the site have been the subject of much positive media coverage over the years but, according to Purchasing Manager Chris Gardner, "Despite the fact that the stores were working well, they were not performing any strategic function. We wanted to take them forward and identified that to optimise the function we needed external expertise , which is when we became aware of the integrated solutions on offer from ERIKS"

Not that ERIKS UK was unknown to Aylesford Newsprint as the company was already spending a good deal of its annual multi-million pound MRO budget with the company on a variety of engineering products via its local service centre. However, as is typically the case with MRO purchasing, the total value spent on MRO perhaps is only 10% of the total revenue expenditure of a business but can represent up to 60% of the transactions. Also, the major element of MRO costs can be concealed in internal acquisition processes i.e. the time and effort to source, order and deliver individual items.

Chris Gardner highlights a lack of ┼ístrategic focus´ as being the major reasons for Aylesford Newsprint´s decision to work in partnership with ERIKS Integrated Solutions. "We wanted more from the stores than just providing a support function" adding "we were looking for proactive management in such areas as the optimum minimum and maximum stock holding levels but this needed to be done through a partner with a strong understanding of the paper industry. Our business differs to the needs of the automotive industry, for example, and we will always have a need for emergency spares with very long lead times."

The search for a partner began in the second half of 2008 and ERIKS Integrated Solutions´ record of continually moving its customers operations forward resonated with what Aylesford Newsprint were trying to achieve. As part of the selection procedure Chris Gardner and his colleagues were able to speak with existing integrated supply partners of ERIKS and positive factors emerged such as: the experience of ERIKS across many industries; the breadth of its product offering, which has allowed Aylesford to cut is MRO supplier base from hundreds to 12 and the flexibility of the different models in operation.

Another key factor for Aylesford Newsprint was the reassurance offered to them by the size, stability and infrastructure which the ERIKS Group provides. With the economic landscape rapidly changing the newsprint manufacturer was looking for business continuity and a long-term partner with which it could develop its supply chain.

The most emotive issue surrounding any outsourcing revolves around incumbent staff. The five-strong stores team at Aylesford Newsprint have been replaced by a six-strong management team including one of the current staff staying with the site and transferring across to be wholly employed by ERIKS. The transfer of manpower is an area in which ERIKS Integrated Solutions is well-versed and is always tackled sympathetically and rationally with transferred staff often finding new career development and training opportunities which were not always available in their old roles.

One perceived barrier to MRO outsourcing is that most sites are running an ERP or CMMS which has undergone a degree of customisation to suit the particular site. Such is the case at Aylesford which is well-known for employing MAXIMO to manage its data-intensive stores and maintenance regime.

However, as Martin Stainton, Commercial Director at ERIKS Integrated Solutions points out, "ERIKS have a high level of expertise in implementing, operating and optimising the deployment of both our own bar coded stores management system, Paragon, or the inventory management modules of the major ERP systems such as SAP, Oracle and MAXIMO.

This ensures our customer base maximises their return on what are usually very significant IT investment costs in an area of their businesses that may not always get the management attention it deserves."

With the new integrated supply approach going live in March 2009 Aylesford Newsprint has in place a long-term performance based contract. Says Chris Gardner, "Having chosen ERIKS Integrated Solutions we are embarking on a journey which by continually analysing the way in which we manage our MRO we will always be moving forward."

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Editor´s Notes:

About Aylesford Newsprint Limited:
Aylesford Newsprint operates on a 60-acre site on the banks of the River Medway in the heart of Kent. From this site the company manufactures newsprint by recycling recovered newspapers and magazines.

ERIKS UK was formed on April 2nd 2008 following the acquisition of WYKO by ERIKS nv in November 2006 for £139 million. The company offers an enormous breadth and depth of products and service know-how to both the Original Equipment Manufacturer (OEM) and Maintenance, Repair and Operations (MRO) markets.

ERIKS UK is part of the ERIKS Group, the clear market leader in Central and Western Europe with sales of €1.2 billion and approaching 6000 staff. The Group now operates 300 service centres and 62 production and technical centres with a product range of over half a million items.

ERIKS UK plays a major part in the ERIKS Group´s intention to establish itself among the top three companies in each of its eight chosen core activities namely: electrical and mechanical engineering services; flow technology; industrial plastics; power transmission; sealing technology; specialist technologies; technical and logistics services plus tools and maintenance products.

For editorial enquiries contact:
Richard Ludlam
Tel: 0121 508 6000.

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