2005 Supply & Demand Chain 100 Case Study  Fortune 500 Power Systems Manufacturer / LeftBrain

Profiles in Supply Chain Enablement: Company reportedly saves more than $100 million in four years after deploying new sourcing and procurement platform

Profiles in Supply Chain Enablement: Company reportedly saves more than $100 million in four years after deploying new sourcing and procurement platform

Company: Fortune 500 Power Systems Manufacturer (U.S.)
Company Size: Large
Company Sector: Manufacturing
Area(s) of Enablement: Sourcing, Procurement, Decision Support
Enabler: LeftBrain (McLean, VA)

SDCE 100 2005Case Study: This Fortune 500 power systems manufacturing was looking to achieve significant savings and more reliable operations in sourcing and procurement; improve relationships with strategic suppliers; and reduce time and complexity, while increasing control and visibility across the entire procure-to-pay cycle.

The solution for achieving these objectives involved using of SourceCentre, LeftBrain's flagship sourcing and procurement platform, and LeftBrain's Supply Chain and Solution Implementation services, in order to adapt and configure both business processes and the software solution to the optimal configuration for the company's exact needs.

Operations began incrementally within six months of project launch, and the system was rolled out to 15 business units within the first year. Now, after four years in service, the system is running in 40 countries in five languages and is used by over 5000 individuals. The system processes tens of thousands of transactions per day for an annual purchase spend of several billions of dollars.

The purchasing spend across the company's 20 business units is $3 billion per year, and each business unit saved at least $1 million in the first year of operation, with one unit saving $4 million in invoicing costs alone. Thus the total saving in the first year was upward of $30 million against an investment in software and services of less than $500,000 in the first year.

To date, the manufacturer has rolled out the system to 60 percent of its business units. It intends to roll out to all units within the next year. The company has bought rights to the software for a restricted range of business units and continues to make its own minor modifications in conjunction with LeftBrain support as required.

As was mentioned above, the first year cost the manufacturer under $500,000 in software and services. Over the following three years the company spent approximately $350,000 per year for custom changes and improvements, plus regular maintenance and support. In all the project has cost the company under $1.6 million versus savings now well over $100 million, according to LeftBrain.

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.