Profiles in Supply Chain Enablement: A strategic purchasing firm cuts its sourcing cycle time and increases savings by implementing an e-sourcing solution.
Company: Connell Purchasing Services (Naperville, IL)
Company Size: Medium
Company Sector: Non-manufacturing (Business Consulting)
Area(s) of Enablement: Sourcing
Enabler: EC Sourcing Group, Inc. (South Orange, NJ)
Case Study: Connell Purchasing Services (CPS), a strategic purchasing firm, was founded in 1994 and is a wholly owned subsidiary of The Connell Company. CPS works with its clients' existing purchasing personnel to better manage the purchasing process and improve their companies' bottom lines.
CPS was interested in automating its already sophisticated sourcing process to reduce cycle time, increase throughput without increasing headcount and maximizing the competition for their requirements.
The Solution
After almost two years of investigating the marketplace, CPS licensed the FlexRFP e-Sourcing suite from EC Sourcing Group and subsequently helped to launch the solution provider's Document Management and Project Management modules.
FlexRFPTM is an Internet-based solution designed to facilitate a disciplined approach to the traditional strategic sourcing process. In using this solution, the sourcing professional is looking to obtain the highest value goods and/or services from the most qualified suppliers, with the most preferential terms, for a certain contractual period. The solution is intended to replace disparate, time-consuming tasks previously accomplished with basic tools like Excel, Word and e-mail.
CPS deployed FlexRFP rapidly for use across multiple clients, according to EC Sourcing Group. The initial implementation took approximately two weeks for the base FlexRFP system and then additional time for the Project Management and Document Management modules.
The Solution in Action
As one example of how CPS is using FlexRFP, last year the service provider turned to the solution to conduct a sourcing event for corrugated packaging materials that spanned 40 plant locations and 2000 unique box types, and that was valued at over $65 million. This was a truly large-scale initiative as it spanned all areas of the Continental United States and included 20 incumbent suppliers.
As a result of using FlexRFP, CPS was able to negotiate an enormous volume of information that resulted in hard dollar savings of almost $8 million, according to EC Sourcing Group. The analytics within FlexRFP allowed for the realization that an optimal award scenario consisted of five suppliers, with three receiving the majority of the award.
The total calendar time for this project was six months, which included collection of data, the sourcing event itself and transition to the new award scenario. As a result of conducting this project, CPS was provided additional opportunities in other spend categories for this client.
The ROI
Overall, based on a year of benchmarking across 91 sourcing events and over $355 million of spend, CPS estimates that it has experienced cycle time reductions in the 40-60 percent range, in addition to significant hard dollar savings.
Now, in addition to using FlexRFP on every sourcing event it conducts, CPS is leveraging EC Sourcing Group's survey capabilities to perform SWOT analyses, the enabler's Project Management module to ensure that recommendations are being implemented, and the Document Management module to ensure that all specifications are kept current. Currently plans are being developed for an integrated savings tracking and reporting module for CPS.
CPS believes that it saw an immediate impact and results from using FlexRFP, and based on the volume of work that is managed through FlexRFP, the purchasing service estimates that the solution paid for itself within six to nine months.
For more stories of successful supply chain implementations, read the "2005 Supply & Demand Chain Executive 100" article in the June/July 2005 issue of the magazine. Also watch the Today's Headlines section of SDCExec.com every Tuesday and Thursday for more in depth best practices drawn from this year's Supply & Demand Chain Executive 100.
Company: Connell Purchasing Services (Naperville, IL)
Company Size: Medium
Company Sector: Non-manufacturing (Business Consulting)
Area(s) of Enablement: Sourcing
Enabler: EC Sourcing Group, Inc. (South Orange, NJ)
Case Study: Connell Purchasing Services (CPS), a strategic purchasing firm, was founded in 1994 and is a wholly owned subsidiary of The Connell Company. CPS works with its clients' existing purchasing personnel to better manage the purchasing process and improve their companies' bottom lines.CPS was interested in automating its already sophisticated sourcing process to reduce cycle time, increase throughput without increasing headcount and maximizing the competition for their requirements.
The Solution
After almost two years of investigating the marketplace, CPS licensed the FlexRFP e-Sourcing suite from EC Sourcing Group and subsequently helped to launch the solution provider's Document Management and Project Management modules.
FlexRFPTM is an Internet-based solution designed to facilitate a disciplined approach to the traditional strategic sourcing process. In using this solution, the sourcing professional is looking to obtain the highest value goods and/or services from the most qualified suppliers, with the most preferential terms, for a certain contractual period. The solution is intended to replace disparate, time-consuming tasks previously accomplished with basic tools like Excel, Word and e-mail.
CPS deployed FlexRFP rapidly for use across multiple clients, according to EC Sourcing Group. The initial implementation took approximately two weeks for the base FlexRFP system and then additional time for the Project Management and Document Management modules.
The Solution in Action
As one example of how CPS is using FlexRFP, last year the service provider turned to the solution to conduct a sourcing event for corrugated packaging materials that spanned 40 plant locations and 2000 unique box types, and that was valued at over $65 million. This was a truly large-scale initiative as it spanned all areas of the Continental United States and included 20 incumbent suppliers.
As a result of using FlexRFP, CPS was able to negotiate an enormous volume of information that resulted in hard dollar savings of almost $8 million, according to EC Sourcing Group. The analytics within FlexRFP allowed for the realization that an optimal award scenario consisted of five suppliers, with three receiving the majority of the award.
The total calendar time for this project was six months, which included collection of data, the sourcing event itself and transition to the new award scenario. As a result of conducting this project, CPS was provided additional opportunities in other spend categories for this client.
The ROI
Overall, based on a year of benchmarking across 91 sourcing events and over $355 million of spend, CPS estimates that it has experienced cycle time reductions in the 40-60 percent range, in addition to significant hard dollar savings.
Now, in addition to using FlexRFP on every sourcing event it conducts, CPS is leveraging EC Sourcing Group's survey capabilities to perform SWOT analyses, the enabler's Project Management module to ensure that recommendations are being implemented, and the Document Management module to ensure that all specifications are kept current. Currently plans are being developed for an integrated savings tracking and reporting module for CPS.
CPS believes that it saw an immediate impact and results from using FlexRFP, and based on the volume of work that is managed through FlexRFP, the purchasing service estimates that the solution paid for itself within six to nine months.
For more stories of successful supply chain implementations, read the "2005 Supply & Demand Chain Executive 100" article in the June/July 2005 issue of the magazine. Also watch the Today's Headlines section of SDCExec.com every Tuesday and Thursday for more in depth best practices drawn from this year's Supply & Demand Chain Executive 100.
