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RMC Industries

RMC Industries . Oracle’s Internet Procurement November 15, 2002. Agenda. Company Overview Functional Landscape Technical Landscape Why IP? IP Pilot Results Difficulties Key Questions. Company Overview. RMC Industries The largest ready mix concrete company in the world

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RMC Industries

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  1. RMC Industries Oracle’s Internet Procurement November 15, 2002

  2. Agenda • Company Overview • Functional Landscape • Technical Landscape • Why IP? • IP Pilot • Results • Difficulties • Key Questions

  3. Company Overview • RMC Industries • The largest ready mix concrete company in the world • Operations in US, UK, France, Germany, and Australia • Interesting fact: Annually, we pour enough concrete to fill Lake Michigan 12 times. • A company of companies • 15 Independent subsidiaries • Subsidiaries sites from Miami to Northern California • A full management team resides within each subsidiary

  4. Functional Landscape • Purchasing • Few dedicated full time procurement employees • Procurement software is disperse or non-existent • A handful of centrally negotiated contracts which have been poorly communicated • End-user vendor selection

  5. Functional Landscape(Cont.) • Supply Base • Current supply base consist of 19,000+ suppliers • 33% of suppliers have one transaction per annum • 59% have five or less transactions per annum • 75% of the supply base equates to just 2.5% of spend • As many as 45 accounts for the same supplier with 10 different pricing structures

  6. Technical Landscape • Multiple ERPs • 4 different instances of Oracle • 2 instances of JD Edwards • 2 instances of Mas90 • Excel is the preferred purchasing and reporting tool • Spare parts inventory not tracked • Maintenance software only utilized by fleet management

  7. Why IP? • Gain control of spend (workflow) • Provide detailed information for spend analysis • Drive buying behavior • Promote the standardization of general MRO parts • Reduce cycle time • Provide user friendly interface

  8. IP Pilot • Initial catalog • 20 suppliers selected – some e-enabled some not • 3000 items • Internal catalog only – no punch-out • Purchasing Intelligence installed • P-card customization developed

  9. Results • An estimated 90% of all MRO purchase utilize IP • Would like to utilize blanket purchases orders for high volume raw materials • Purchasing comments • We have less data entry • Fewer decisions have to be made about which supplier to use • Receiving is done in the field • There is heavy utilization of Favorites and Publiclists

  10. Difficulties • Catalog content • Many suppliers are unable to provide content • Good content solutions are expensive • Pricing and part numbers change • Quality of data from suppliers inconsistent • Catalog updates don’t flow to favorites list • Culture • 19,000 suppliers means 19,000 local relationships • Lack of understanding of strategic sourcing • Strong cultural preference to stay independent

  11. Difficulties (cont’d) • Platform – 11.03 • Not all features are available • Major efforts to back port from 11i

  12. Key Questions • Has your company gone through a good strategic sourcing exercise? • Does your supply base consist of over 1000 suppliers? • Are the majority of your suppliers Fortune 500 or local? • Has your company adopted standards for MRO goods? • Do you have good purchasing processes now? • Is senior management absolutely committed? • Is your culture opposed to partnering with suppliers?

  13. How did you answer the questions? Bottom-line: Without strong management support, a good sourcing plan, and adequate resources the project will be very difficult

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