Supplier Consolidation and Tail-Spend Management Services

Supplier Consolidation

One area Mechanical Power excels, given its diverse product offering, is the ability to help OEM’s consolidate their supply base to Mechanical Power. Often, larger OEM’s have legacy spend practices built in that ultimately equate to buying lots of parts from lots of suppliers. For the sake of efficiency, becoming leaner, driving cost savings (favorable purchase price variance), dealing with less people, and issuing less purchase orders. We present an opportunity to consolidate vendor touch points and buy multiple types of parts from one entity, Mechanical Power.

Larger companies are continuing to urge their supply chain and sourcing/procurement organizations to consolidate their supply base. Dealing with less people is easier, more efficient, and usually leads to hard cost savings on purchase parts/materials but also incredible soft cost savings. Having engineered and industrial components ready for consumption at one, North American consolidation point, is of great value to manufacturing customers.

Emailing or calling Mechanical Power to say “I need this”, and “I need that” is a lot easier than doing so with multiple parties who may or may not have what is needed at the time. Working smarter and not harder factors in here. More variability, unpredictability and ultimately supply chain risk increases with more supply entities you source from.

Relying on one entity in the Chicagoland area, the heart of the USA, is a risk mitigation tactic north American OEM’s can employ to lower their inventories, lower their risk and drive meaningful bottom line results via direct material cost savings.

Tail-Spend Management

“Tail-Spend”, otherwise defined as the “Long-Tail”, or “Low-Value” spend, is the bottom 20% of the spend that typically goes unmanaged within an organization. Unmanaged spend is bad for manufacturing and it usually means there is untapped potential for favorable improvement in the areas of Quality, Delivery and Cost.

With Mechanical Power’s diversified supply base, we are happy to tackle tail-spend projects for OEM customers in our targeted industries. We can lessen the burden on procurement, engineering and quality departments and serving as a consolidation point for the many tail spend entities they are forced to try and manage and uphold.