Case Study: A Manufacturer Lowers Costs With Automated Spend Analysis

Over the past five years, a successful global manufacturer increased its size tenfold through various acquisitions — good news for the company but essentially outstripping its strategic sourcing group's ability to effectively manage spend. The rapid growth resulted in an enormous proliferation in the number of parts and suppliers the company was using, many of them redundant. Ad hoc efforts were made to generate reports to normalize the supplier base but these ended in failure. The bad data and organizational obstacles were just too difficult to navigate. To break this logjam, the company looked to automated spend analysis and within 10 months was able to report on aggregated spend categories and identify supplier/item consolidation opportunities. Web-based tools were made accessible to design and procurement staffs and collaboration workshops were conducted. As a result, higher-quality/lower-cost parts are being used, and the sourcing cycle time was reduced dramatically.