KLM, Sealy Sign up for e-Sourcing

Pilots produce savings, prompt subscriptions to Procuri solution

Atlanta  May 8, 2002  e-Sourcing provider Procuri announced two customers wins this week, netting KLM Royal Dutch Airlines and Sealy Corp., the world's largest bedding manufacturer.

KLM will use Procuri's solution on a subscription basis, having already completed a five-month pilot program with the solution. During this pilot, which ended in early March, KLM conducted 25 e-sourcing events for both direct and indirect goods and services, touching nearly all of its operations. Savings from the events reportedly averaged 20 percent, which Procuri said resulted in a return on investment of greater than 26 times for the pilot phase.

Angelica Jarnaker, KLM's e-sourcing manager, said that her company selected Procuri based, among other things, on the provider's client references, the capabilities of its solution and the e-sourcing platform's ease of use. Jarnaker added that the company also saw a high level of adoption among its strategic buyers. "They said the platform's collaborative capabilities and functionality saved enormous time and dramatically enhanced their value as professionals in the sourcing process, Jarnaker said.

According to Jarnaker, buyers used Procuri's tools during the pilot program to collaborate both internally and with more than 125 suppliers in developing requests for information and quotes (RFIs and RFQs). Most of the e-sourcing events reportedly produced savings at the RFQ stage without reverse auctions.

KLM is an enlightening case study for companies that want to get fast results from e-sourcing, said Mark Morel Sr., Procuri's president and CEO. KLM's sourcing professionals were very quick to embrace collaboration and rating tools that make them more effective. They have proven that real benefits can be gained throughout the entire sourcing process, not just through reverse auctions.

Meanwhile, Sealy Corp., the $1.2 billion bedding manufacturer, has also signed a subscription agreement to use Procui's e-sourcing solution.

Sourcing professionals at Sealy's corporate headquarters in Trinity, N.C., negotiate national supply agreements on behalf of 19 domestic bedding plants and three component plants. According to Jeff Wilhoite, Sealy's commodity sourcing manager, Sealy sought e-sourcing tools that were easy to use and able to handle complex bidding scenarios for national contracts without the involvement of consultants. We have the talent in house to execute our strategies, so there's no need to pay outsiders to do what our sourcing professionals can do for themselves, Wilhoite said.

Sealy conducted two pilot events with Procuri before committing to the subscription agreement, and the events for 25 percent of estimated spending on raw materials achieved "significant" net savings, according to Wilhoite.