The sourcing process for one product can often soak up valuable company resources. Companies that effectively manage and optimize their sourcing process can gain a competitive advantage in the marketplace. While many internal and external factors play a role in determining the success or failure of a business, the sourcing process is one internal factor that can be largely controlled.
If you are a large company like the J.M. Huber Corporation, which develops and manufactures products for a broad spectrum of industries, the sourcing process can be extremely complex and can increase SG&A expenses in an instant.
J.M. Huber, founded in 1883, is one of America’s largest privately held companies. Based in Edison, New Jersey, it had revenues of $1.5 billion in 2010, employs approximately 4,000 people around the world, and has operations in more than 20 countries. Its products and services serve a wide range of industries from agrochemicals to cosmetics and residential and commercial construction. With such a broad range of products and operations spanning five continents, the company faced significant challenges around effectively administrating its large capital equipment budget, maintaining its SG&A benchmarks, and managing over 7,000 sellers. Huber’s decentralized buying at the plant level focused on local sellers, which meant there was often little competition, resulting in higher costs for the company.
”Ariba Discovery is a great spot buying tool for low-dollar MRO parts and accessories. It provides buyers for spot buys of non-catalog items with an opportunity to easily conduct market research and identify qualified suppliers.” – Niclas Truedsson, Sr. Manager CAPEX, J.M. Huber
In an effort to streamline its buying process, J.M. Huber started utilizing Ariba Discovery to quickly and easily find sellers for a broad range of products across the world. Using the Ariba Discovery service, the company was able to conduct RFPs, gather multiple proposals, and compare sellers from a large number of sellers on a single platform.
“The opportunity to get vendors in the game by using Ariba Discovery is big for us. It’s a good tool – whether you’re in the Americas, EMEA, or Asia Pacific – as it allows us to look well beyond local vendors.” – Brian Bender, Sr. Director Global Purchasing, J.M. Huber
Using Ariba Discovery, the company was able to improve the productivity of its plant buyers, centralize certain essential functions, and reduce costs. Huber was also able to reduce sourcing lead time from several weeks down to a couple of days. In addition, the company received between 7-15 bids for a single sourcing event without having to do research on multiple sites.
Saving money, increasing productivity, and improving internal processes is not only a business requirement for large complex organizations like J.M. Huber. It is just as important - if not more so - for smaller businesses with less resources.
Download the J.M. Huber Case Study to learn more.