From Purchasing to Profits
SAS uses its own SAS® Supplier Relationship Management to drive strategic sourcing
In the endless quest to improve margins, the first place a company looks is expenses: how to cut costs without compromising products and services. But what if that company is in the knowledge business – with no clear-cut supply chain costs to tie to quality outcomes? Faced with such a challenge, SAS looked into its own cupboards. Today, using SAS Supplier Relationship Management, the company is saving significant dollars while continuing to lead the industry in business intelligence software and maintaining one of the world's most coveted workplace environments.
Procurement as a Profit Center
"It's not just about 'buying things' anymore," says Southwick, "or getting the lowest price." PBS also considers on-time delivery, quality and payment terms, all of which affect total cost of ownership (TCO). SAS Supplier Relationship Management provides the intelligence that PBS needs to develop cost-effective strategies for purchasing, to determine the best vendors and to secure the most beneficial deals for SAS. "Without visibility of the entire spend," says Southwick, "all you have is price. With the SAS solution, you can also see where the product comes from and who is using it – areas where you can really add value."
From Cost Control to Consolidation, Clout
Other savings have resulted from the ability to identify active vendors and consolidate spending where appropriate. Of nearly 10,000 active suppliers, SAS did business with approximately 7,200 in 2003. Yet 245 of those – only four percent – accounted for 80 percent of the spend. Who were the smaller vendors? Did they offer additional value? SAS spends hundreds of millions of dollars annually. Used effectively, that's significant negotiating clout. "You want to be able to go to one company and say, 'I spend $200,000 a year on plumbing'," says Southwick. "'If I give you all that business, what kind of discount can you give me?'"
Executive Management Insight
SAS Supplier Relationship Management will become even more valuable as SAS expands its efforts to establish global contracts with top vendors. Travel, for example, is a prime area where the 360-degree view provided by the solution will enable SAS to consolidate the dozens of airlines and hotel chains it currently does business with into a limited number of cost-saving contracts. "You just can't get this kind of intelligence from your transactional systems," says Davis. "Not only do you get the enhanced reporting and analysis, but it integrates seamlessly with our other SAS solutions – SAS Financial Management, SAS Human Capital Management and SAS Strategic Performance Management – to give us the competitive edge we promise our own customers."
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Director, Procurement and Business Services
Reduce costs by effectively managing the procurement process.
SAS Supplier Relationship Management provides ability to analyze spend and score suppliers to negotiate better rates and terms.
“ Without visibility of the entire spend, all you have is price. With the SAS solution, you can see where the product comes from and who is using it - areas where you can really add value. ”
director, Procurement and Business Services