A leading advanced industries company

We used machine learning and a 6-level taxonomy to classify the MRO spend of this company and then applied four advanced-analytics opportunity levers to the global MRO spend. The results included:

• Eliminated price variance by comparing same-parts rates across suppliers.
• Identified top-spend suppliers contributing to 80% of spend.
• Started sourcing parts from non-OEM supplier. Calculated opportunity by applying a 30% rate reduction and 50% capture rate.
• For the most granular categorization, divided SKUs into 3 tiers based on price. Sized opportunity by moving to the lowest cost SKU within each tier.

• $7.4M identified by making a switch to non-OEM parts
• $7.2M sized by consolidating supplier base
• $2.5M identified by optimizing the prices across suppliers
• $0.5M identified by rationalizing the SKUs within a category-tier combination