RMC Industries

1
RMC Industries

• Oracles 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
  Public lists

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 dont 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 (contd)

• 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