AMD Consulting

A US based mid-sized industrial manufacturing company significantly improved the spend visibility through a quick, short cycle spend analysis exercise.

Overview
The company was going through a separation or spin-off and was looking for a quick spend visibility in order to identify and drive cost saving opportunities.
Challenges
  • Poor data quality.
  • Near 16,000 SKUs with an annual spend of around $40M across divisions.
  • Fragmented supply base with 1200+ suppliers.
  • Lack of data linkages between systems & products and lack of vendor hierarchy.
Solutions

Our quick and rigorous data cleansing & categorization enabled improved spend visibility that further helped conduct a quick opportunity assessment.
Various work streams included –

    • Data Cleansing
      Besides currency, the item and supplier fields – names, description etc. were compared and normalized.
    • Item Categorization
      AI powered item classification tool alongside expert reviews achieved an efficient turnaround of under 3 days.
    • Spend Analysis
      Several cost savings opportunities were identified through spend analysis.
Results

A quick spend data analysis provides for a faster decision making around major cost savings opportunity areas.

Key outcome of this exercise included –

  • Clear roadmap to achieve near $2M in cost savings within MRO, Chemicals, and Services categories.
  • Opportunity to consolidate the fragmented supply base.
  • Improved negotiation opportunities through external price benchmarks.
“A quick short-cycle spend data analysis provides for faster decision making.”

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