SDI - The Supply Chain Works Best When It All Works Together - learn more here!

1. Presented by:
Capabilities Overview
March 2015
Capabilities Overview
MRO MATERIALS AND STOREROOM MANAGEMENT
John Kronenwetter
Vice President

2. Copyright 2015 SDI, Inc. All rights reserved.
Why are firms investigating a more
connected, enterprise-wide solution?
Equipmentunplanneddowntime
ThousandsofSKUs
InaccurateInventoriesandtoomuch
Pooron-timedelivery
Workordercompletiondelays
Tensofthousandsoftransactions
Decentralizedspend/Highlyfragmentedvendorbase
Lackofvisibility,technologyenablers&informationsystems
Nocentralauthority-stakeholderscrossmultipledepartmentswithconflictingagendas
• Accounting–lowesttransactioncost
• Finance–minimuminventory
• Maintenance–partsavailability
• Operations–laborproductivity
Under-resourced,neglectedcategory
MinimalinvestmentduetodifficultyincalculatingROI/unknownTCO
Risksandcosts(direct&indirect)arenotclearlyvisibleorcontrollable
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3. Copyright 2015 SDI, Inc. All rights reserved.
Competing Agendas & Conflicting Interests
Structurally, this approach has been fragmented between MRO stakeholders across
multiple departments – can’t align MRO with other strategic initiatives (OEE, Lean, Six
Sigma, sustainability, operations excellence)
• I.T. – systems compatibility, data integrity, analytics &reporting
• F&A – minimum inventory &PO transaction costs
• Storeroom – fire fighting
• Reliability–Overall EquipmentEffectiveness (OEE)
• Maintenance– parts availability
• Operations – production optimization
• Sourcing &procurement – lowest material price & total cost of ownership
This fragmentation makes it all but impossible to align MRO with other organizational
strategies such as overall equipment effectiveness (OEE).
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4. Copyright 2015 SDI, Inc. All rights reserved.
Silos of Pain
Atypical organization's MRO processes are
usually fragmented into many sub-processes
and tasks that are carried out in departmental
silos. Often, no one is responsible for the overall
performance of the end-to-end supply chain
and the departments have conflicting interests.
These suboptimal practices result in “silos of
pain”. These silos evolve as individual
departments implement localized and isolated
MRO-related management tactics that ripple
through the organization, most often in terms of
added costs and inefficiencies.
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Counterproductive behaviors won’t change until individuals or
departments see and understand the enterprise impact.
Maintenance & Engineering IT
Finance & Accounting

5. Connected = Efficient and Productive
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The hidden costs can exceed MRO
parts spend by 200%!

6. Copyright 2015 SDI, Inc. All rights reserved.
SDI connects every link to reduce MRO TCO
and improve operational uptime
Leadingprovider with40+ yearsexperience
deliveringservicesinNorthAmerica
$300millioninspendmanagement with6,000+ suppliers
End-to-endservice offeringincludes datamanagement and
analytics, strategicsourcing, procurement topayment,
storeroommanagement, andengineering services
Servingcustomers inchemical, food&beverage,heavy
industrials, pharmaceuticals, transportation,medical devices,
andeducation
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7. Copyright 2015 SDI, Inc. All rights reserved.
Connecting MRO for leading companies:
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8. 8
Data management
& analytics
Source-to-pay
procurement process
Receiving &
storeroom operations
Engineering Services
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How to achieve maximum value
from your MRO Supply Chain

9. Data Management & Analytics.
- Reduce Consumption 10-15%
Inventory MRO SKUs and location.
Cleanse data to standardize parts catalog and set
proper data taxonomy.
Analyze SKU data for duplication and identify
critical, existing and obsolete inventory
SDiExchange cloud-based portal provides all
transactional detail, reporting, analytics and
inventory control
Establish inventory forecasting methodology and
set risk tolerances
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Data Management
& Analytics
Source-to-Pay
Process
Receiving &
Storeroom Operations
Engineering Services

10. Source-to-Pay Process.
- Reduce Processing Costs by Over 50%
Six Sigma sourcing process in 40+ categories with
6000+ suppliers to achieve price savings.
Design workflow and approval hierarchy
Select strategic suppliers and establish PunchOut
capabilities with each
Paperless processing eliminates manual intervention
and reduces processing error rates
Shared Services model for greater control
and leverage of our entire portfolio for more efficient,
compliant buying operations.
Significant reduction in AP processing costs,
SDI becomes the single supplier,
billing 2x per month
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Data Management
& Analytics
Source-to-Pay
Process
Receiving &
Storeroom Operations
Engineering Services

11. Copyright 2015 SDI, Inc. All rights reserved. 11
Data Management
& Analytics
Source-to-Pay
Process
Receiving &
Storeroom Operations
Engineering Services
Receiving & Storeroom Operations
- Increase Productivity by 30%
- Reduce Inventory 15-25%
Deploy MRO expertise and storeroom SOP’s.
determine best method to secure the storeroom
Implement surrounding technologies to
SDiExchange - bar coding, cycle counting, warranty
and repair tracking, ERP interface, SDiMobile,
vending and point of use.
Deconstruct the SDI Best-in-Class assessment and
develop a 12-month project plan to achieve BIC
status
Align storeroom functionality and the work
order and planning process
Set agreed to metrics to measure
performance and service

12. Copyright 2015 SDI, Inc. All rights reserved. 12
Data Management
& Analytics
Source-to-Pay
Process
Receiving &
Storeroom Operations
Engineering Services
Engineering Services
Drive 8-10% Value Creation to the P&L
Largest team of certified and licensed reliability
engineers focused solely on MRO.
Conduct data analytics, review process
efficiencies, and identify cost improvement
opportunities with your team.
Pinpoint issues with equipment – repeat
failures, unplanned downtime, costly or
inefficient applications, longer life products,
improved maintenance strategies
Standardization, OEM commercialization and
reverse engineering to increase product
availability and/or life as well as reduce cost
Initiate all savings and productivity
improvement projects in SDiPowerSteering

13. Copyright 2015 SDI, Inc. All rights reserved.
Parametric Google-likesearch engine
Web-based,access fromanywhere
PunchOutto key suppliers
Electronic orderapprovalhierarchy
Catalogandnon-catalogrequests
Workflow
Easy part-addprocess
Robust onlinereporting
Virtual warehouse
Improves spendvisibility
SDI Exchange : Custom Catalog, Order Processing & Inventory
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Master Data Management
Inventory Management
Inventory Forecasting
Budgetcontrols
Order Status

14. Copyright 2015 SDI, Inc. All rights reserved.
SDiExchange – Technology Specifically for MRO
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SDiExchange
eCatalog and eProcurement
SDiTrack
Warranty & Repair Tracking
SDiMS
$-
$100
$200
$300
$400
$500
$600
$700
$800
1 3 5 7 9 11 13 15 17 19 21 23
Thousands
Projected Inventory On-Hand
Months
Demand Forecasting
SDiConnect
Seamless SAP Interface
SDiMobile
Barcode and Electronic Signature
SDiStoreroom
Smartphone Application
SDiVending
Storeroom Automation and POU
SDiPower Steering
Project Management and Tracking

15. Copyright 2015 SDI, Inc. All rights reserved.
Vending Solutions
Every SDI vending solution is customized to the requirements
Actual parts and usage
Volume of daily transactions
Level of inventory control requirements
Size and layout of the facility
Number of employees
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16. Your MRO Connected Enterprise
SDI connects, coordinates, optimizes & aligns
every link in the chain, typically delivering up to
350% ROI to our clients.
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Data Management
& Analytics
Source-to-Pay
Process
Receiving &
Storeroom Operations
Engineering Services
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17. Copyright 2015 SDI, Inc. All rights reserved.
Savings Opportunities & Productivity Improvements
Masterdatamanagementandnewpartsregistration
Spendvisibilityandanalytics
Leveragedandconsistentpricing
Compliancetocontractsandincreasedincentives
Freightexpensereduction
APprocessingreduction
Productstandardization
OEMconversionandreverseengineering
Inventorymanagementandforecasting
Inventoryreduction
Warrantyandrepairtracking
Laborcostreduction
MaintenanceproductivityimprovementsleadingtoincreasedOEErates
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Achieving Best in Class MRO and Storeroom Management Status
The results:

18. Copyright 2015 SDI, Inc. All rights reserved.
Next Steps
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The path forward for MRO success.
The process:
Understandthechallengestobeovercome
Sizeandscaletheproject
Datashare
Identifytheteaminvolvedandtheinternalprocessahead
Selectplant(s)forsupplyChainAssessment
Establishatimelineforcompletion
TourSDI’sSharedServicesCenter
Reportoutofassessment
Agreeuponthesavingsmetricstobereported
SDIpresentsfinalsolutiontotheMROteam
Scopeimplementationandtimeline

19. Copyright 2015 SDI, Inc. All rights reserved.
Next Steps
MROData&Spend
Sourcing&Procurement
Systems&Technology
Storeroom&Inventory
Engineering&Maintenance
Production&Operations
Finance&Accounting
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Align stakeholders to move forward with a comprehensive assessment.
SDI diagnostic of your:
The strength of this approach lies in its ability to reveal pain points and
inefficiencies in the process, identify savings opportunities, drive departmental
synergies and ensure sustainable performance improvement connecting the
MRO supply chain to the needs of the business.

20. Copyright 2015 SDI, Inc. All rights reserved.
MRO Total Cost of Ownership - Example
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CATEGORY COST COMMENTS SDI IMPACT
MRO MATERIAL SPEND $5,600,000 MRO & OEM, Stock & non-Stock 5-12%
FREIGHT COST $448,000 Estimated at 8% 50-60%
STOREROOM LABOR COST $156,000 Single shift, 2 FTE's, fully loaded 0-100%
INVENTORY MANAGEMENT $952,000.00 Carrying cost 12%, 5% slippage 10-20%
TECHNOLOGY $35,000 Inventory management system, not tied to CMMS 100%
MRO SOURCING $132,000 OEM / Commercial, 2 FTE's 0-100%
MRO PURCHASING $66,000 OEM / Commercial, 1 FTE 0-100%
AP PROCESSING COSTS $241,758 Average voucher size $275, 20,350 processed, $11.88ea 80-100%
MASTER DATA MANAGEMENT $0 No dedicated resources or formal process to manage N/A
MAINTENANCE PRODUCTIVITY $333,432 Includes wait time, parts search, ordering 20-30%
$7,964,190 11-23%
Nearly 150% of Material Cost