How an Aerospace Components Manufacturer Achieved 10%+ Savings on General & Industrial MRO Supplies

Overview

The member is a leading independent manufacturer of aerospace components in North America. With five manufacturing sites across the United States, their product portfolio includes gearbox assemblies, rotorcraft drive systems, and machine-fabricated parts.

Challenges

The member’s spend management challenges included

• Supplier Management Complexity: The member struggled with coordinating and managing a wide array of suppliers, leading to logistical challenges and hindered cost management efforts.

• SKU Overload: With thousands of SKUs in their inventory, the member faced difficulties in accurately tracking and managing stock, leading to inefficiencies, obsolescence risks, and suboptimal purchasing decisions.

• Limited Spend Visibility: The lack of comprehensive spend visibility prevented the member from identifying cost-saving opportunities and leveraging their purchasing power effectively.

Approach & Results

To address the client’s challenges and drive cost savings, Procure Analytics (PA) implemented a two-pronged approach:

• General Industrial MRO Program: The member joined PA’s General Industrial MRO program, leveraging PA’s substantial purchasing power of over $1.6 billion in indirect spend. By tapping into PA’s existing supplier relationships and negotiated contracts, the client achieved upfront cost savings of 10%.

• Value-Added Member Services: PA provided value-added member services to further optimize cost reductions and streamline operations:
  • Vendor Consolidation: PA identified opportunities to consolidate suppliers, reducing complexity and streamlining the procurement process.
  • SKU Rationalization: Through SKU rationalization, the client reduced inventory complexity, minimized carrying costs, and improved overall inventory management.
  • Inventory Management: PA implemented robust inventory management practices, leveraging advanced analytics and forecasting techniques.

The PA member advisory team continues to help hunt for whitespace savings opportunity on MRO and other indirect spend categories for ongoing savings and value creation.