Client

 

  • Multi-national engineering equipment manufacturer providing specialist steel assemblies to the oilfield services sector
  • Manufacturing sites in US, UK and Europe
  • Local site procurement but little group-wide procurement
  • High spend on steel raw material, tooling and consumables. Senior management targeting profit improvement.

 

Approach

 

  • Spend Analysis and Opportunity Assessment identified $1.2m savings opportunity through improved group procurement
  • International deployment with consultants in each factory providing co-ordinated procurement
  • eAuction for raw material steel to leverage volumes
  • Focus on scrap material to increase rebate revenue

 

Results

 

Savings of over $1.5m delivered in six months. Working capital improved through consignment stockholding.

  • Steel raw material moved to eAuction spot-buy process with 4.25% savings
  • Global tooling tender delivering preferred supplier relationship with 6% saving
  • Vendor managed consignment stock introduced for tooling
  • Scrap process redesigned to maximise revenue streams from high-value materials and index-linked to ensure sustainability of benefits
  • 12% saving through sourcing of machine consumables
  • Volume-based rebate structures introduced with all key external service suppliers

 

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