$38 B provider of technology and service solutions for the energy sector.
Strategy & Objectives
- Re-establish control of strategic commodity category: Nickel and Alloy Bar material.
- Aggregate demand and consolidate spend.
- Leverage volume with raw material sources.
- Control & isolate material input value in part cost model.
- Ensure continuous supply of material to the network.
- Consolidate and centralize supply with a designated 3PL service and distribution provider.
- Sponsor a Rebate (Directed Buy) sourcing program for Nickel and Alloy Bar material.
SDX™ 8.0 Multi-Enterprise Platform with the Extended Bill of Resources loaded for the population of parts produced from Nickel and Alloy Bar. With this model in place, The Supply Network included the OEM (Network Sponsor), 40 + Part Suppliers (Contract Manufacturers), a Distributor, and 5 Material Sources (Primary Metals Producers). The OEM, in collaboration with the designated Distributor, were able to:
- Aggregate network demand and consolidate spend for Nickel and Alloy Bar requirements.
- Share that demand and negotiate preferred pricing including volume rebates with a select group of material producers.
- Direct part suppliers to single source (ePL) and provide preferential material pricing.
- Monitor program performance and collect rebate for transacted volume.
- Avg. 14 percent recurring cost reduction on raw materials.
- Eliminated finished part price variability by isolating cost of materials and locking in finished part cost with suppliers.
- Improved planning performance for entire supply network
- Less speculative and obsolete inventory throughout the supply network
- Proactive expediting of the timely purchase of material by sub-tier suppliers