Kitchen Appliance Manufacturer Achieves 14% Savings on MRO Spend

Overview

A designer and manufacturer of small kitchen appliances and houseware products including pressure cookers and slow cookers. The company employs 2,400 employees on four continents, and their products are used in millions of homes around the world.

Challenges

The member was leveraging one long-time supplier for its MRO spend, which created both pros and cons: it gave them a “one-stop shop” for all of their purchasing needs, but was not yielding any type of recurring savings year-over-year.

Three new members of the procurement team—the MRO category manager, the Procurement Director, and the Vice President of Procurement—had all come from companies that are current PA members. They liked the GPO+ approach and sought a spend review and benchmarking analysis with the PA team.

Approach

After a spend analysis, the PA team found that separating the MRO spend into two categories would deliver significant upfront savings. They moved all general industrial spend (jan/san, hardware, fasteners, safety/ppe, hardware) over to one supplier and all specialty MRO spend (power transmission, bearings, pneumatics, and industrial automation) to another.

The member company also benefited from PA’s dedicated account management and its robust spend analytics. The member now has a dedicated member advisor helping them hunt for whitespace savings opportunities in other indirect spend categories, and is leveraging a new analytics package for savings tracking.

Results

The switch to the new suppliers drove 13% savings on general MRO and 11% savings on specialty MRO. Through supplier rebates and other value-added services, the member also achieved 8% annual recurring savings.