Office Products – OfficeMax
Buyer Details
Member Industry: Power Generation Equipment
Revenue: $1.5 billion
Employees: 12,000
Existing Condition
In early 2007, a power generation equipment company with over 25 major locations and over $1.3 billion in sales decided to refresh their indirect spend purchasing habits. The company instituted a program that lent support within the organization to examine category spend and consider an alternative method of buying. The procurement department had its suspicions that the company’s office products spend could be better managed, so they contacted Corporate United after hearing about the GPO’s method of leveraging spend to achieve more attractive agreements with indirect suppliers.
Solution
A Corporate United representative met with nine of the packaging company procurement professionals to discuss the process of analysis, implementation and contract managing that Corporate United conducts. The procurement group offered the office products spend details of their power generation headquarters as the first facility to go through the Corporate United analysis. In 2006, the headquarters spend $760,000 on office products through Corporate Express, one of the big three suppliers. The analysis team discovered a 22.5% savings if the power generation equipment company were to move their spend from Corporate Express to Corporate United’s office products agreement with OfficeMax, which would result in an annualized savings of $158,000.
Results
Thrilled that their spend examination program resulted in such an impressive savings for the headquarters, the power generation equipment company requested that Corporate United complete analyses for several of the other locations. After receiving the results of the other analyses, the company quickly determined that buying through the Corporate United OfficeMax agreement would standardize purchasing habits and add to the bottom line. Confident in both the agreement and Corporate United’s ability to monitor, manage and assist with the implementation with OfficeMax, the company decided to roll out the contract and improved buying procedures at all of the locations that had undergone the spend analysis. The company is enjoying excellent compliance for those locations, and the procurement team continues to work on implementing Corporate United’s OfficeMax contract at their other locations.