How a Major Steel Manufacturing Company Saved $700,000+ on MRO Spend With Procure Analytics

Overview

A prominent steel manufacturing company based in South America, with its headquarters located in Tampa. The company specializes in the production of billets and operates approximately 23 locations across North America.

Challenges

The company faced three primary challenges:

• Decentralization: Each of its North American locations had different approaches to MRO procurement, leading to inefficiencies, inconsistencies, and increased costs.

• Standardization: Implementing MRO solutions across all locations was a complex task, as it required standardizing procurement processes and integrating the supplier’s offerings into existing workflows.

• Outages: The company faced operational disruptions due to unforeseen outages, necessitating quick access to essential supplies, particularly personal protective equipment (PPE).

Approach

PA’s strategic approach for this member included:

• Standardized Vending: They implemented vending machines across their locations to ensure consistent access to essential MRO items.

• Site-Level Business Reviews: To optimize procurement at each location, the company conducted site-level business reviews. This approach allowed them to identify specific needs and tailor their MRO procurement strategies accordingly.

• Regular Communication: To ensure alignment, the company established bi-monthly calls with category managers and local representatives to review cost initiatives, discuss challenges, and explore opportunities for cost savings.

Results

The company’s strategic approach to optimizing MRO spend has yielded impressive results:

• Cost Savings: Through their efforts to standardize procurement, the company has realized substantial cost savings. In total, they have saved approximately $731,000 on MRO spend.

• Operational Resilience: By improving their MRO procurement processes, the company has enhanced its ability to respond to outages and other operational challenges. They can now quickly access essential supplies, including PPE, ensuring the safety of their workforce and minimizing disruptions.