A Local Church
A large, local church was looking for ways to reduce expenses to keep in line with the annual budget.
The customer split the business with three (3) suppliers to ensure competition. Over 100 orders were placed in a given year and over 150 invoices were received. The customer was spending a lot of time matching paperwork, processing small invoices, overseeing supplier bids, figuring out which items belonged to what supplier, tracking backorders and dealing with out of stock items that members needed and expected to be there. The activity cost related to purchase order placement alone exceeded the customers’ total spend with all three suppliers combined.
After sharing the data, we worked together to create a simple process by which the customer controlled ordering and inventory of the products they needed. They saw value in trusting one supplier with the business and were able to leverage their total spend to receive price reductions across the board. The customer retained flexibility to replenish and manage the product which improved member satisfaction. Reducing the transactional activity has freed up time to refocus on improving the church rather than worry about order entry, item mix up, bid and invoice match. With our Customer Managed Inventory (CMI) solution in place, the customer now enjoys the benefit of dealing with a single supplier and the simplistic reorder process we put in place.
- 12% material cost reduction from single sourcing
- 97% procurement cost reduction from simplifying the buying process
- 96% order count reduction virtually eliminating back orders and headaches