$1 Billion Electric Motor Manufacturer: ICG Commerce accelerates electric motor manufacturer's eProcurement ROI with sourcing and savings implementation

Situation:

In order to reduce costs and automate purchasing processes, a $1B manufacturer of electric motors and instruments had invested in eProcurement software. However, the software implementation was not generating the cost savings the company needed to achieve a return on investment. The company lacked the necessary sourcing resources and buying volume to negotiate optimal supplier agreements in many of their purchasing categories. Additionally, the manufacturing company needed to look outside to service providers that could develop supplier content and online catalogs for them. With a first year goal of reducing costs by 5 percent the company partnered with ICG Commerce to identify savings through sourcing and enable their preferred suppliers.

Solution:

To help the company more rapidly achieve their goals, ICG Commerce analyzed the company's expenditures and provided immediate cost savings through pre-sourced, aggregation based supplier agreements. ICG Commerce experts helped the manufacturing company implement the savings agreements at their 24 North American facilities including the integration of ICG Commerce's pre-built e-catalogs with the company's existing eProcurement system. To ensure the company's buyers would adopt the new supplier agreements, ICG Commerce developed an effective change management strategy and assisted the customer with executive communications, training, and end-user feedback programs.

Results:

In less than 90 days, the manufacturing company began to track measurable savings from ICG Commerce's solution. With more suppliers online, the company end-users began to use the eProcurement system more frequently and the company realized savings of 16 percent. Purchasing processes became more efficient, the supply base was drastically reduced to under 100 vendors from an original 14,000 and the company accelerated their eProcurement ROI.