Procurement Initiative at Indalex

Alloy aluminum producer rolls out initiative to unite fragmented purchasing organization with supplier base

Alloy aluminum producer rolls out initiative to unite fragmented purchasing organization with supplier base

Philadelphia — July 15, 2003 — ICG Commerce, a procurement services provider, this week announced the completion of a nationwide rollout of a procurement initiative for Indalex Aluminum Solutions Group, the largest independent producer of soft alloy aluminum products in North America.

According to the provider, the solution was designed to help Indalex, which has grown through a series of mergers and acquisitions made by parent company Novar plc, centralize its fragmented procurement function in order to influence its purchasing power with suppliers, streamline procurement processes, and gain more visibility and control over company-wide procurement expenditures.

Indalex said it is using all of ICG Commerce's procurement services, which offer support from strategic sourcing to purchase-to-pay transaction management and ongoing category management.

Indalex and ICG Commerce began the rollout by analyzing company expenditures to identify savings opportunities. The two companies used a variety of sourcing strategies, including pre-sourced aggregation-based agreements to establish preferred supplier relationships for each of the key categories. In order to ensure that the identified savings are actually realized, ICG Commerce said it has performed a savings implementation process that entailed connecting both buyers and suppliers through RealExchange.

RealExchange, ICG Commerce's purchase-to-pay platform, provides Indalex buyers a single point of access to preferred supplier catalogs. IGC Commerce will also provide ongoing management of these indirect categories and supplier relationships to continuously improve upon savings for Indalex in the future.

Additionally, Indalex will soon be receiving invoices electronically, allowing for full procurement automation. Indalex users are currently using RealExchange to purchase from 28 preferred suppliers in categories such as Chemicals, Electrical Supplies, General Industrial Supplies, Janitorial Supplies, Lumber, Office Supplies, Packaging, Power Transmissions/Bearings, and Forms and Labels.

"Having joined Indalex after the implementation had already begun, I was initially skeptical that we would see savings," said Dale Prows, vice president of Procurement for Indalex. "But I am pleased with the results and success of the program, which is in large part due to the dedication our plants and buyers have shown in adopting the new system."

"Procurement cost reductions and efficiencies are significant for companies that have grown via merger and acquisition but continue to manage sourcing and procurement in a disparate or siloed manner," said Edward West, chairman and CEO for ICG Commerce. "Indalex's procurement strategy is a good example of how utilizing a holistic approach to find and fully implement both process and cost improvement opportunities can have a measurable impact on company performance."