This work was done (not including VMI) in a market where prices are increasing for a HVAC and Plumbing Services firm with a nationwide portfolio of more than 70 branch locations.
PSS Role
- Analyzed over $325M in spending to identify targeted sourcing opportunities
- Managed sourcing process for 9 categories with roughly $129M in combined spending. Categories included:
- HVAC and Plumbing Supplies
- Wireless Telecom
- Travel (Agency, Hotels, Air & Car Rental)
- Direct Mail
- Computer Supplies
- Office Supplies
- Office Equipment
- Background Checks
- Advised client or led supplier negotiations for each category
- Analyzed purchase history on over 25,000 items
Outcome
- Negotiated industry-leading pricing on $100M of spend on supplies
- Achieved $22.9M (17.6%) in cost savings (not including VMI) in a market where prices are increasing
- Incremental one-time and recurring VMI savings from transfer of inventory to distributors and outsourcing warehouse labor
- Obtained supplier commitments to provide industry-leading pricing moving forward
- Savings on other categories were as high as 35% (weighted average 10-13%)
- Negotiated rebates of up to 7% from suppliers to ensure savings don’t get passed along to customers
