SWIFT Inventory & Finance Transformation
Dynamics 365 F&O was selected as the ERP of choice for HSE Mining and Vueterra was called upon to assist with the data setup and migration.
The Background
For more than 25 years, HSE Mining (HSE) has been providing contractor mining services and fleet operations across Central Queensland’s Bowen Basin.
As the business has expanded inventory management, supply chain and site facilities have become critical for business success. In 2019, HSE engaged Vueterra to review and improve supply chain and inventory performance.
At a Glance
SITE:
HSE Mining provides contractor mining and fleet services to Queensland’s Bowen Basin.
ERP:
Microsoft Dynamics 365
PROBLEM:
Un-planned, unstructured processes – including a lack of documentation and poor quality stock audits – contributed to a lack of visibility and control into stock levels across all HSE sites.
The most reliable processes were manual, putting heavy load upon warehouse staff.
Meanwhile, poor warehouse layout and stock management over multiple sites contributed to massive safety risks and procedural inefficiencies.
SOLUTION:
An inventory audit identified requirement for:
- Site redesign to achieve flexible, scalable, modular site-based approach to supply and inventory operations
- Optimisation of inventory management processes according to best practice.
- Master data enrichment
RESULTS:
- Cash saved in reduced stock hold
- Improved visibility into stock, deferred stock spend
- Reduced downtime in production assets
- Improved warehouse and site safety
- Streamlined inventory management processes
- Improved supply chain quality standards and culture
The Challenge
HSE’s rapid expansion in recent years, including the acquisition of Kalari in 2017 had contributed to the emergence of informal systems and unplanned structures across a number of areas of its supply chain, including inventory procurement and storage.
As a result, visibility into inventory was poor, and the chances of effectively managing the warehouse were very low; processes were undocumented, stock audits were ad-hoc and substandard, offering little value to the business.
HSE consequently heavily relied upon local workshop personnel to manually manage inventory – from ordering, through to receipting. These supply chain management issues cost the business significantly with duplicate, obsolete or invisible inventory items dispersed across sites and costs continued to mount with a heavy reliance on manual work
With an ERP and inventory system implementation still seven months
away, HSE needed a structure and processes that could quickly contain the situation, save costs and form a longer-term planning and solution design that would have the business operating efficiently with the new Microsoft Dynamics 365 (D365) Solution.
The Solution
Vueterra travelled to four HSE sites to perform an initial stock audit, site audit and report. The Audit Report found compelling evidence of major cost leakage within HSE’s current inventory hol- dings and generally poor inventory practices.
Vueterra’s assessment also provided an approach to redesign site storage and inventory management, allo- wing capacity planning, resourcing and a true “design- to-build” methodology for the future state.
HSE then enlisted Vueterra to implement key recommend- ations to reduce wastage, improve customer service levels and reduce safety risks to maintenance and stores team members.
Key deliverables included;
- Site redesign to achieve a flexible, scalable, modular and portable approach for site-based supply and inventory operations
- Rapid mobilisation and demobilisation of stores areas
- Optimal flows for inventory traffic
- Recommended storage unit design and layout
- Set up of stores locations and location hierarchies
- Count to ground for current holdings
- Full inventory cataloguing and master data enrichment for ERP readiness
- Long term vision for a distribution model with supply chain and logistics
- Maintain compliance with HSE safety standards and protocols
The Results
Six months after commencement of the project with Vueterra and the results of the transformation are taking shape at HSE.
With greater visibility into stock and an inventory aligned with maintenance requirements, multiple production assets have been saved from costly downtime.
Spend is being deferred as excess stock – previously invisible and sitting idle in warehouses – is now being consumed, and interim systems are keeping data current in preparation for the implementation of D365.
A more important part of the improve- ment however, is that tradespeople and operational staff are enjoying the predictability and reliability of the new environment, contributing to positive cultural change as they adopt improved processes and see how the recent changes add value to their departments. In addition to cash flow improvements, productivity is up at HSE.
As the preparation for D365 continues, new levels of staff efficiency is being felt on the ground across maintenance crews.
Once nearly impossible, finding parts on site in the middle of the night has become safe and easy as lighting and the location of spares is quickly and reliably known. Planned maintenance activity is easier as spare parts are consolidated and staged, and the delivery process is made safe and reliable as the movement of warehouse staff is known and free of any possible interference from traffic.
Process, procedure, and standards are driving new levels of workforce productivity and a benchmark of quality at HSE. With procedures now documented, and routines used as primary instructions of work, warehouse personnel are now accountable for their role and aligned to drive quality throughout the supply chain. Whilst new to HSE, stocktaking is generating new insights on how particular staff interact with inventory and HSE are now taking further positive steps to improve access and streamline parts delivery.
And finally, the data-focused approach from Vueterra has prepared spare parts information and specialised system settings ready for the direct upload to the new D365 ERP.
The Benefits
Vueterra’s audit identified poor practices in supply chain management that included excessive stock holding and over-reliance on individuals; as a result of the process review, not only have massive cost savings in reduced stock hold and team productivity been achieved, but a cultural change has commenced, contributing to ongoing improvements at HSE.
In addition to Vueterra’s inventory optimisation services, by adopting new layout and facilities HSE has a far safer and more efficient work environment for its teams.
This includes lighting in containers to reduce risk for workers at night, safer flooring, appropriate shelving and container igloos to reduce the risk of damage to expensive stock due to exposure and warehouse traffic flow is improved to remove forklifts from thoroughfares and pedestrian walkways.
The implementation of Dynamics 365 has been streamlined, with Vueterra’s inventory best- practice process design being configured in the solution. Over time these processes will continue to optimise stock levels to reduce cash locked in inventory and improve HSE service levels.
"Improved visibility into inventory levels delivered clarity on holding costs, ordering and consumption practises, and finally delivered the business greater control over its stock across four sites."
About Vueterra
Vueterra is a specialist in supply chain optimisation with focus on the Heavy, Mining and Government Industries.
Our work is proven to deliver higher service levels and lower costs for clients through solid data governance, procurement best-practice and comprehensive continued improvement programs.
At Vueterra, it’s about getting a view of your business from the ground; gaining insight into the root cause of problems to efficiently address your priority issues, and provide long-term value to the business with custom services built upon our real-world experience.
