Leading consumer-products company reaches out for sourcing and eProcurement expertise

Situation:

To meet highly aggressive goals of lowering total supply-chain costs and streamlining current purchasing processes for 2003, the procurement operations department of this leading consumer-products company declared an initiative to save over 6% on $32 million in annual spend. In addition they wanted to increase use of their current eProcurement system to capture further savings. The company was using SAP for eProcurement but did not have the expertise or experience to develop catalog content or to integrate suppliers in an accelerated and consistent manner.

Solution:

The consumer-products giant found a new brand of procurement company to take on the comprehensive initiative: ICG Commerce. To begin the program, a three-wave strategic-sourcing initiative was deployed, covering more than 10 spend categories, including MRO, office supplies, temporary labor, electrical supplies, lab supplies, janitorial supplies, and metals. Several categories used ICG Commerce's aggregation-based supplier agreements and others were traditionally sourced. To achieve a consistent, streamlined procurement process, ICG Commerce developed detailed procedures for all aspects of procurement, from purchase to receipt. In addition, ICG Commerce provided ongoing category management for all newly sourced suppliers. With only limited resources available of its own, the customer was able to leverage ICG Commerce's sourcing, commodity, and eProcurement technology expertise to rapidly implement the identified categories.

Results:

Using ICG Commerce's pre-sourced supplier agreements, the first category was sourced and implemented into the eProcurement system in less than 2 months. And traditional strategic sourcing was implemented in less than 5 months. The company's eProcurement system has gone from one to five customer-specific supplier catalogs-each having between 14,000 and 180,000 SKU's. And now, more than 300 users in three locations are transacting over 80 POs daily. To date, the company has exceeded its savings expectations; realizing 5-13% savings on $19.4M in spend. And the future is looking even brighter.