The customer used drums for scrap material but struggled to keep the right amount on hand, which caused major issues with production. On top of that, they were paying a premium price.
The customer approached Martin Integrated Supply to handle their drums. Even though this is clearing outside the stockroom, Martin Integrated Supply looked at where the drums were used and spoke to the workers who used them daily to identify the right amount to order. Martin also opened the drums up for bid, having multiple companies quote the sale, delivery, and pick up the drums. A company was selected and a blanked PO was issued with 50 drums delivered every two weeks.
With the right type of PO in place for the right quantity, stock-outs of the drums have disappeared. The machine shop has a process set for requesting extra if they know that they will need it but after 8 months, the supply has remained steady. On top of the process improvement, Martin was able to sell them with a $22/drum savings, resulting in a yearly savings of $30,466 in total cost savings.