A Industrial Manufacturer Drives 27% on Tail Spend Management with Amicus

Member Profile

A multi-billion-dollar industrial products manufacturer and existing client of Amicus was acquired by a private equity firm, triggering an in-depth evaluation of its total business operations.

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The Challenge

The private equity firm engaged a management consulting group to assess the company’s operations, focusing on:

• Reviewing top-tier supplier contracts
• Conducting risk assessments to identify vulnerabilities
• Providing strategic recommendations for future improvements

Over six months, the consulting firm examined Amicus’ financial disclosure statements, purchasing services agreement, business model, and program performance metrics. Additionally, they sought direct feedback from the customer.

A survey was sent to all 19 customer plants, targeting site management leaders and key users who regularly interacted with Amicus. The goal was to gather insights on Amicus’ e-Procurement tool, Epic®, price competitiveness, catalog depth, quote responsiveness, and overall program effectiveness.

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How Amicus Helped

The customer shared the survey results with Amicus, highlighting both positive feedback and areas for improvement. They then requested an action plan outlining how Amicus would address these opportunities.

Amicus responded with a comprehensive strategy covering all aspects of the survey findings. The consulting firm ultimately deemed Amicus’ services “Best in Class” and recommended expanding the relationship. In a review with the customer’s leadership team, two additional opportunities for improvement were identified.

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Results

The first initiative involved Amicus supporting tail-end spend, which had not been part of the existing program. Given 30 days to respond, Amicus successfully met the deadline and presented a solution that delivered 16% savings on high tail-end spend items.

The following month, the customer asked Amicus to source and manage additional spend outside the current program. This second sourcing project represented over $8 million in incremental program spend and an opportunity to consolidate MRO purchases previously managed by three major industrial supply distributors.

The customer expressed interest in dissolving these direct supplier relationships to streamline MRO purchasing through Amicus. Initial sourcing results showed cost savings of 27%, 20%, and 17% for each of the three suppliers when comparing manufacturer name and part number pricing. These results demonstrated the advantage of Amicus’ item-level sourcing approach and aggregated purchasing model over the traditional “discount off list” arrangements offered by large distributors.

Impressed with the results, the customer committed to ongoing continuous improvement initiatives recommended by Amicus, reinforcing a strong, long-term partnership.

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