Kennametal Base Case

By Kim S. Nash  |  Posted 2003-02-01 Print this article Print

The $1.6 billion Pennsylvania company has spent the last three years taking knives to its $700 million budget for supplies. But first, it needed real data.

Kennametal Base Case

Headquarters: 1600 Technology Way, Latrobe, PA 15650

Phone: (724) 539-5000

Business: Manufacturer of tools for metal cutting, mining and road construction

Chief Information Officer: Ralph Niederst

Financials in 2002: $1.6 billion in sales; $212 million net loss; $119 million operating profit

Challenge: Identify every dollar that leaves the company, then cut spending by enforcing corporate procurement policies at its 50 factories worldwide


  • Cut $35 million from $700 million in managed procurement costs by May 2003
  • Reduce the number of suppliers to 2,000 by 2005, from 8,000 three years ago
  • Get employees to comply with preferred-supplier contracts for 80% to 85% of all purchases by 2005, up from less than 40% in 2000

Senior Writer
Kim has covered the business of technology for 14 years, doing investigative work and writing about legal issues in the industry, including Microsoft Corp.'s antitrust trial. She has won numerous awards and has a B.S. degree in journalism from Boston University.

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