Benchmark this!
Doug Smock, Editor-in-Chief -- Purchasing, 3/18/2004 2:00:00 AM
A major upgrade of supply management at your company starts with studying the spend. And it's a major barrier for many companies. The best in class know the total spend across the enterprise for everything they buy. In this issue, we present our first-ever "Heroes of Spend Analysis" (starting on page 28.) These companies submitted nominations to our editorial team, who then selected seven winners based on key criteria. (See nomination process at www.purchasing.com/strategic sourcing).
The winners are blue chip:
IBM: 100% spend coverage...excellent integration with finance department to stop maverick spend.
Honeywell. Achieved global supply rationalization, cutting supply base 40-50%.
Lucent Technologies. Company moved from loss to profits last year in large part due to totally revamped supply process rooted in improved spend analysis.
Microsoft. Developed its own suite of tools to achieve 100% coverage.
Rockwell Collins. Aggressively integrates sourcing operations of new acquisitions into comprehensive system.
PPG Industries. Achieved 10% savings and 90% supplier reduction. Uncovered hidden spends in wire transfers and consignment inventories.
Intel. Gathers global spend data in real time to cover 100% of direct and 80% of indirect.
We applaud these seven winners as well as their technology partners, who include i2, SAP, Oracle and Ariba. We know we only scatched the surface in this report. We'd like to hear your spend analysis success story—it doesn't have to be as far-reaching as those of these superheroes of spend. Maybe you have a product classification system that really works. Or maybe you have a standardization project that put some muscle into your spend categories. We'd like to hear about it and possibly report your story in a future issue of the magazine. Go to the strategic sourcing channel of purchasing.com and participate in the talkback discussion on spend. Or just click on my e-mail address and send me a message.
Also plan to attend our online Global Procurement Conference April 20-21 where IBM's story will be included with other spend analysis sessions. Register at www.globalprocurement.purchasing.com.
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