Executive Summary

Opportunies from consolidating procurement across enterprise

Category Management
Best Price Evaluation
Tail Spend Management

Recommendations

Develop enterprise-level strategic sourcing plan and category management
Execute commodity waves to maximize savings vs. effort

Potential MRO savings

Estimated in excess of $5.2m or 9% of total spend

Key Findings

Volume concentration & category management

80% of spend concentrated in four categories
Split across 940 suppliers in those four categories

Best price evaluation

27% of parts purchased at multiple price levels
Potential $5.2m savings (9%) if all parts purchased at lowest price

Tail Spend Management

8% of Vendors constitute 80% of spend
Effective management estimated to save 5-10% in MRO spend

Study Parameters

Time frame: FY14 (20130301 - 20140228)
Dataset: Miller, Coors MRO expenses
Records: 124,758
Categories: 24
Plants: 11
Vendors: 1,109
Parts: 41,655
Exclusions: direct material purchases (16 records totaling $344,250)

Data exploration

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