2005 Supply & Demand Chain 100 Case Study  Fortune 100 Consumer Package Goods Manufacturer / ePlus, Inc.

Profiles in Supply Chain Enablement: Analyzing spend across a multinational enterprise

Profiles in Supply Chain Enablement: Analyzing spend across a multinational enterprise

Company: Fortune 100 Consumer Package Goods Manufacturer (U.S.)
Company Size: Large
Company Sector: CPG (Food)
Area(s) of Enablement: Sourcing, Procurement, Decision Support
Enabler: ePlus, Inc. (Herndon, VA)

SDCE 100 2005Case Study:Attaining an accurate picture of corporate spend can be a challenging feat for many organizations  and an even more complex undertaking for a multinational enterprise with a huge volume of purchasing data across independent business groups.

When one of the world's largest consumer package goods companies sought a systemized way to analyze billions of dollars in annual purchases from more than 250,000 suppliers, it turned to ePlus.

Understanding Corporate Spend

With a diverse corporate portfolio, both from acquisition and internal growth, the company recognized the need to consolidate its purchasing data in order to leverage total spend and benefit from associated cost savings. After a thorough evaluation process, it selected the Spend+ VisualEngine graphical mapping tool from ePlus to provide its strategic commodity buyers with visibility into spend data at both the corporate and business unit level.

The company based its decision on ePlus' in-depth knowledge of its requirements, demonstrated success with practical aspects of data collection and management, domain expertise with technology, and an internal total cost of ownership study.

Step-By-Step Process to Success

ePlus used a streamlined process for enterprise-wide spend analysis: First, ePlus collected spend/supplier data from all of the company's domestic divisions, creating  for the first time  a single repository of two years of data. Next, the data was prepared for analysis through a collaborative effort between the company and ePlus by normalizing supplier names, associating commodity codes to the spend records, and developing a two-level hierarchy for both commodities and business units.

ePlus then used its sourcing and consulting expertise to analyze the spend by supplier, commodity and business unit to identify high-level opportunities for the company to better leverage its spend and capitalize on savings opportunities. In the final step, the cleansed data was ported into the Web-enabled Spend+ VisualEngine application, where it was made available to commodity managers online who could apply their own business rules to analyze it.

Commodity managers can use the dynamic spend maps (by supplier, commodity, and business unit) provided by the solution to drill down into detailed activity and explore total spend patterns across the enterprise. In addition, ePlus hosts the application from its data center, providing for 24/7 access by the company's procurement officers.

Realizing Its Full Potential

For the first time, the company now has intuitive access to complex spending patterns, off-contract spend, minority spend and purchasing card activity at a glance through a series of interactive color-coded maps. This visualization technology enables users to quickly spot patterns that are difficult or even impossible to detect in conventional reports, graphs and spreadsheets, helping to reduce analysis time.

Armed with the right data in the right format, the company's commodity analysts and corporate procurement group can accurately analyze more than $20 billion of spend across all locations and business units and realize the full potential that this sheer dollar volume affords them.

As the company expects to realize on-going cost savings as its commodity experts continue to mine the information in Spend+, this organization intends to expand use of the system to include global data for even further insight into its spending patterns across the world.

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.