Brussels may be the centre of European politics but for Metso Minerals' spare parts operation, the centre of Europe is now about an hour's drive from the Belgian capital. Claire Symes reports
Getting the right part to the right place at the right time is critical in the aggregates business and failure to achieve this can have a significant impact on production within a quarry. Many operators now select new equipment based not just on the machine's features and cost, but also on the manufacturer's ability to provide after sales parts and service.
"We needed to expand our spare parts storage and distribution facilities to keep pace with the growth we are currently experiencing and to be ready for the further market expansion which is forecast," explained Metso Minerals senior vice president construction services Duncan McGregor. "But doing this to service the projected growth, while coping with the existing high levels of demand is challenging, particularly if customers are not to be impacted by the process, even in the short term." Speaking at the official opening of the new warehouse in June, McGregor underlined Metso's plan to grow the company faster than the market and said that this presented the company with significant supply chain management issues. "Orders are currently at an all-time high at Metso but they could be better," he said.
"The partnership with SKF is not just aimed to expand our spare and wear parts service but to also improve it and the biggest testament to the fact it is already working is the fact that we have not received any complaints since the changeover started."
Centralised
Under the deal, Metso's distribution will be centralised at the new site at Tongeren, which will be run by SKF. Parts from Metso's existing distribution centres at Tampere in Finland and Mâcon in France are being transferred to Belgium under a phased plan. Metso will still retain some parts storage in both Finland and France but the inventories will be managed from Tongeren.
SKF as a bearings specialist may not seem like an obvious partner for logistics but the company has long supplied Metso with parts so the companies have a good history of working together. Nonetheless, it was SKF's experience of managing and actively improving its own distribution network that made it an ideal partner for Metso.
"In the 1970s SKF went from having national factories working to meet national demand to having specialist facilities to meet global demand to benefit from economies of scale," explained SKF logistics services president Anders Forsberg. "This took the company into the field of logistics and we faced the challenges head on. In the mid 1990s we had 25 distribution centres but in a move to improve services to customers, reduce cost and lower our inventory we cut this to just five. Since then we have provided consultancy services for logistics to other companies but the project with Metso is the first time we have taken on an outsourced service." It was the fact that SKF had already been through the process of moving parts and staff around Europe, while still fulfilling orders that gave Metso the confidence to sign on the dotted line. "SKF has already experienced the difficulties involved in making a step change like this so we can benefit from the knowledge it gained in the process," said McGregor.
Location
According to McGregor, the new location in Belgium will simplify parts delivery. "Previously, parts had to be shipped into mainland Europe for onward distribution by road and, for economic reasons, dispatch may have been delayed until there was a container load for delivery," he said. "To get round this issue some customers used to over order in a bid to get their items delivered more quickly, which may have solved their problems but often created supply issues with meeting subsequent orders from other customers.
"The location of SKF's warehouse in Tongeren has very good transports links - it is close to the pan-European motorway network, is near a major waterway and also can access the rail network. These links mean that multiple daily dispatches are possible which helps to remove the uncertainty that existed before in the delivery process." In fact Limburg has a growing reputation as a logistics hub and the new warehouse that is now home to Metso's spare parts inventory is surrounded by other similar facilities, including SKF's own logistics centre.
Transfer
Metso has phased the transfer of parts from Finland and France to the new site in Belgium in order to prevent the changeover from impacting on customers. Around 80 lorry loads of parts have already been transferred from Finland and in September Metso plans to move 1380 items from Mâcon to complete the process.
The company currently has 3500 locations - types of part - filled and there is room for 7000 locations at the Tongeren site. The storage is split between 2000m2 inside, which is racked to create 16000m2
of storage, and around 5000m2 of outside storage for oversized items.
There are three different operations within the warehouse - in, storage and out - and before items are put into storage they are marked with a serial number to ensure items are easily identifiable. Where the items are stored within the racking is not decided by serial number but by demand, so fast moving items are located at the end of the racking for quick access.
SKF has two shifts of eight people working in Metso's warehouse and at the moment they are picking around 520 lines per day. Although the inventory at Tongeren is not yet complete, the facility dispatched around 4000 deliveries in May and this is slowly being ramped up.
The size of many of Metso's products means most cannot be picked by hand - around 50% weigh more than 17kg - which add to the challenge of the logistics but, according to McGregor, it has not fazed SKF. "We have not had any customer complaints so far and we hope once the transfer of parts is complete, they will start to see real improvements in service."
