Owens Corning, a $5 billion global manufacturer of building materials, has reduced expenses by $1.8 million seven months after implementing Emptoris' ExpenseMap spend analysis application to track and analyze spend worldwide.
"For the first time, we have true spend visibility and accountability across the organization," says John Hutchinson, Owens Corning’s e-commerce leader. The solution provides complete visibility into how much the company spends by commodity, supplier and line of business. Owens Corning also uses the solution to measure and track its savings. “It has become the bedrock for measuring the success of our savings and compliance programs, ensuring we capture the savings we set out to achieve across multiple procurement initiatives,” Hutchinson adds.
Using ExpenseMap, Owens Corning's commodity managers prioritized savings initiatives focused on the following: vendor consolidation, purchasing leverage, contract compliance and cash flow improvement. ExpenseMap provided commodity managers with instant access to the granular purchasing information needed to drive these initiatives. Owens Corning identified the following as examples of how procurement and commodity managers used ExpenseMap to capture the $1.8 million in savings:
* Better purchasing leverage -- with the solution’s ability to aggregate all maintenance-related spend by vendor across multiple plant locations, one Owens Corning team negotiated an average 11% reduction in maintenance spend across seven plant locations.
* Enhanced contract compliance -- by utilizing the transaction drill-down capability to view individual invoice charges, one business manager negotiated supplier rebates based on overpayments for charges not allowed in the contract.
* Improved cash flow -- by using the solution to track spend by vendor payment terms, another team identified vendors with non-standard payment terms and converted these key suppliers to more favorable payment terms.
Based upon this initial success, Owens Corning plans to further expand the use of ExpenseMap to manage over 95% of the company's entire spend, including direct materials, indirect materials and services.
ExpenseMap transforms raw spend and supplier data into comprehensive, unified spend profiles. With this corporate-wide, purchasing-centric view of all spend, purchasing professionals can ensure cost savings and purchasing performance improvement goals are met. ExpenseMap aggregates transaction data from all enterprise systems to provide a comprehensive view of a corporation's spend. Proprietary data enrichment technology accurately classifies spend data to the highest level of confidence.
