Kennametal Base CaseBy Kim S. Nash | Posted 2003-02-01 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.
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
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